Cases 4th Set Compilation.docx

43 ERIE RAILROAD Co. v. TOMPKINS 304 U.S. 64 (1938)

ISSUE

FACTS W/n such rule of Pennsylvania is required and should be considered by the Court in deciding the Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight train of the Erie

present case.

Railroad Company while walking along its right of way at Hughestown in that State. He claimed that the accident occurred through negligence in the operation or maintenance, of the train. He was rightfully on

RULING

the premises as licensee because on a commonly used beaten footpath which ran for a short distance alongside the tracks, and that he was struck by something which looked like a door projecting from one

The subject doctrine in this case is that of Swift v. Tyson. The case stated that a federal court exercising

of the moving cars. To enforce that claim, he brought an action in the federal court for southern New

jurisdiction over such a case on the ground of diversity of citizenship, is not free to treat this question as

York, which had jurisdiction because the company is a corporation of that State. It denied liability, and

one of so-called general law, but must apply the state law as declared by the highest state court.

the case was tried by a jury. In deciding the present case, first, the Court held that federal courts exercising jurisdiction on the The Erie insisted that its duty to Tompkins was no greater than that owed to a trespasser. It contended,

ground of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law

among other things, that its duty to Tompkins, and hence its liability, should be determined in

of the State as declared by its highest court; that they are free to exercise an independent judgment as

accordance with the Pennsylvania law; that, under the law of Pennsylvania, as declared by its highest

to what the common law of the State is -- or should be. The statute is merely declarative of the rule

court, persons who use pathways along the railroad right of way -- that is, a longitudinal pathway, as

which would exist in the absence of the statute. The federal courts assumed, in the broad field of

distinguished from a crossing -- are to be deemed trespassers, and that the railroad is not liable for

general law, the power to declare rules of decision which Congress was confessedly without power to

injuries to undiscovered trespassers resulting from its negligence unless it be wanton or willful. Tompkins

enact as statutes.

denied the applicability of such rule since there was no statute of the State on the subject. The railroad's duty and liability is to be determined in federal courts as a matter of general law.

Second, the Court ruled that the application of Swift v. Tyson doctrine prevented uniformity. Diversity of

The trial judge refused to rule that the applicable law precluded recovery and awarded a sum of money.

citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts

The Circuit Trial Court affirmed the decision of the trial court.

against those not citizens of the State. Swift v. Tyson introduced grave discrimination by noncitizens against citizens. It made rights enjoyed under the unwritten general law vary according to whether

Erie’s had contended that application of the Pennsylvania rule was required by § 34 of the Federal

enforcement was sought in the state or in the federal court, and the privilege of selecting the court in

Judiciary Act which provides:

which the right should be determined was conferred upon the noncitizen. Thus, the doctrine rendered

&The laws of the several States, except where the Constitution, treaties, or statutes of the United States

impossible equal protection of the law. In attempting to promote uniformity of law throughout the

otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts

United States, the doctrine had prevented uniformity in the administration of the law of the State.

of the United States, in cases where they apply.

Third, except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State. And whether the law of the State shall be declared by its

NSS in turn appointed Kumagai as its local agent in Osaka, Japan.

Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law

Kumagai supplied mV Estella with supplies and services but despite repeated demands, Crestamonte

applicable in a State, whether they be local in their nature or general, be they commercial law or a part

failed to pay the amounts due for the same.

of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts.

NSS and Keihin Narasaki Corporation filed complaints-in-intervention.

Thus, in the present case, the Circuit Court of Appeals ruled that the question of liability is one of

In May 1987, petitioner Fu Hing Oil Co. Ltd., a Hong Kong corporation and not doing business in the

general law, and on that ground declined to decide the issue of state law. The Court holds this was

Philippnes, filed a motion for leave to intervene, alleging that it has an unpaid claim of $152K for fuel

error, the judgment is reversed and the case remanded to it for further proceedings in conformity with

supplied to MV Estella.

Court’s opinion – an examination of the applicability of the said Pennsylvania law should be considered. Petitioner KK Shell, a Japanese corporation not doing business in the Philippines, filed a motion to 44 K.K. SHELL SEKIYU OSAKA HATSUBAISHO, FU HING OIL CO., LTD., v. COURT OF APPEALS, ATLANTIC

VENUS CO., S.A., and the VESSEL M/V “ESTELLA” G.R. No. 90306-07, July 30, 1990 FACTS In January 1987, Kumagai Kaiun Kaisha, Ltd. (Kumagai), a corporation formed and existing under Japanese law, filed in the RTC Manila a complaint for the collection of a sum of money with preliminary attachment against respondent Atlantic Venus Co., S.A. (Atlantic), a corporation registered in Panama, and the vessel MV Estella and Crestamonte Shipping Corporation, a Philippine corporation. Atlantic is the owner of MV Estella. Petitioner alleged that Crestamonte, as bareboat charterer and operator of the MV Estella, appointed N.S. Shipping Corporation (NSS), a Japanese Corporation, as its general agent in Japan. This appointment was formalized in an Agency Agreement.

intervene, alleging that upon the request of NSS, it provided fuel to M/V Estella when it was docked in Tokyo amounting to $16,996 and Y1,000,000. The trial court allowed the intervention of petitioners. Atlantic and MV Estella moved to dismiss the complaint-in-intervention. Atlantic and MV Estella filed with the CA a petition against the trial court judge, Kumagai, NSS and Kelhin, seeking the annulment of the orders. The CA annulled the orders and directed it to cease and desist from proceeding with the case. The CA ruled that petitioners were not suppliers but sub-agents of NSS, hence they were bound by the Agency Agreement between Crestamonte and NSS, particularly the choice of forum clause (“That this

Agreement shall be governed by the Laws of Japan. Any matters, disputes, and/or differences arising between the parties hereto concerned regarding this Agreement shall be subject exclusively to the jurisdiction of the District Courts of Japan”) NOTE: Fu Hing Oil filed a motion to withdraw as co-petitioner, having entered into an amicable settlement with private respondents.

relationship of the parties is still to be established. This is to be left to the sound discretion of the trial ISSUES

court judge. 52 MIJARES vs. JAVIER-RANADA

Whether or not the complaints-in-intervention by petitioners should have been dismissed on the ground that jurisdiction over the case was exclusively vested in Japanese courts pursuant to the choice

FACTS:

of forum clause. The petitioners in this case are prominent victims of human rights violations who, deprived of the RULING

opportunity to directly confront the man who once held absolute rule over this country, have chosen to do battle instead with the earthly representative, his estate

- NO. The petition is GRQANTED and the decision of the CA is REVERSED.

May 9 1991: Invoking the Alien Tort Act, a complaint was filed by ten Filipino citizens representing a class of 10,000 members who each alleged having suffered human rights abuses such as arbitrary detention,

The Agency Agreement does not support the conclusion that KK Shell is a sub-agent of NSS and is thus

torture and rape in the hands of police or military forces during the Marcos regime with the United

bound by the agreement.

States District Court (US District Court), District of Hawaii, against the Estate of former Philippine President Ferdinand E. Marcos (Marcos Estate)

The body of the Agrement provided that the Agent (NSS) will provide by the decisions of Crestamonte

US District Court and Affirmed by US CA: awarded them $1,964,005,859.90

and will provide the necessary husbanding services for the latter’s vessels and will be responsible for

Petitioners filed Complaint with Makati RTC for the enforcement of the Final Judgment

fixing southbound cargoes with revenues sufficient to cover ordinary expenses. The agreement

Marcos Estate filed a motion to dismiss, raising, among others, the non-payment of the correct filing

enumerates the principal duties of NSS but makes no express reference to the contracting of sub-agents

fees paying only P410

or the applicability of the terms of the agreement, particularly the choice of forum clause, to sub-agents.

Petitioners claimed that an action for the enforcement of a foreign judgment is not capable of pecuniary

Moreover, KK Shell’s statement in its motion that it was a representative of NSS for the supply of fuel to

estimation

vessels of which the latter is an agent does NOT conclusively establish a sub-agency between NSS and

RTC: estimated the proper amount of filing fees was approximately P472 and dismissing the case

KK Shell.

without prejudice Petition for Certiorari under Rule 65

Consequently, since KK Shell is not bound by the Agreement as it is not a party thereto nor a sub-agent, it is not bound by the choice of forum clause and is not barred from instituting the action in the

Petitioners:

Philippines. It was contended that the case should be dismissed pursuant to the doctrine of forum non conveniens.

the action is incapable of pecuniary estimation as the subject matter of the suit is the enforcement of a

The SC ruled that it cannot rule on such invocation of forum non conveniens, as the exact nature of the

foreign judgment, and not an action for the collection of a sum of money or recovery of damages. They also point out that to require the class plaintiffs to pay Four Hundred Seventy Two Million Pesos

(P472,000,000.00) in filing fees would negate and render inutile the liberal construction ordained by the

statutory grant of jurisdiction to a quasi-judicial body, the claim for enforcement of judgment must be

Rules of Court, as required by Section 6, Rule 1 of the Rules of Civil Procedure, particularly the

brought before the regular courts.

inexpensive disposition of every action. There are distinctions, nuanced but discernible, between the cause of action arising from the Commission on Human Rights: urged that the petition be granted and a judgment rendered, ordering the

enforcement of a foreign judgment, and that arising from the facts or allegations that occasioned the

enforcement and execution of the District Court judgment in accordance with Section 48, Rule 39 of the

foreign judgment. They may pertain to the same set of facts, but there is an essential difference in the

1997 Rules of Civil Procedure. The Makati RTC erred in interpreting the action for the execution of a

right-duty correlatives that are sought to be vindicated. Extensive litigation is thus conducted on the

foreign judgment as a new case, in violation of the principle that once a case has been decided between

facts, and from there the right to and amount of damages are assessed. On the other hand, in an action

the same parties in one country on the same issue with finality, it can no longer be relitigated again in

to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts

another country. The CHR likewise invokes the principle of comity, and of vested rights.

from which it prescinds. As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review of jurisdiction

ISSUE: W/N the enforcement of a foreign judgment is incapable of pecuniary estimation

of the foreign court, the service of personal notice, collusion, fraud, or mistake of fact or law. The limitations on review is in consonance with a strong and pervasive policy in all legal systems to limit

HELD: NO. (But belongs to &other actions not involving property&) petition is GRANTED.

repetitive litigation on claims and issues. Otherwise known as the policy of preclusion, it seeks to protect party expectations resulting from previous litigation, to safeguard against the harassment of defendants,

There is an evident distinction between a foreign judgment in an action in rem and one in personam.

to insure that the task of courts not be increased by never-ending litigation of the same disputes, and in

For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an

a larger sense to promote what Lord Coke in the Ferrer's Case of 1599 stated to be the goal of all law:

action in personam, the foreign judgment is presumptive, and not conclusive, of a right as between the

&rest and quietness.& If every judgment of a foreign court were reviewable on the merits, the plaintiff

parties and their successors in interest by a subsequent title

would be forced back on his/her original cause of action, rendering immaterial the previously concluded

However, in both cases, the foreign judgment is susceptible to impeachment in our local courts on the

litigation.

grounds of want of jurisdiction or notice to the party, collusion, fraud, or clear mistake of law or fact. Thus, the party aggrieved by the foreign judgment is entitled to defend against the enforcement of such

Marcos Estate cites Singsong v. Isabela Sawmill and Raymundo v. Court of Appeals:

decision in the local forum. It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to properly determine its efficacy even if such

In determining whether an action is one the subject matter of which is not capable of pecuniary

judgment has conclusive effect as in the case of in rem actions, if only for the purpose of allowing the

estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or

losing party an opportunity to challenge the foreign judgment. Consequently, the party attacking a

remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of

foreign judgment has the burden of overcoming the presumption of its validity. Absent perhaps a

pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the

right to recover a sum of money, where the money claim is purely incidental to, or a consequence of,

tainted with irregularity, they may fairly be expected to submit, within the state or elsewhere, to the

the principal relief sought, this Court has considered such actions as cases where the subject of the

enforcement of the judgment issued by the court.

litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional Trial Courts). An examination of Section 19(6), B.P. 129 reveals that the instant complaint for enforcement of a foreign judgment, even if capable of pecuniary estimation, would fall under the jurisdiction of the Regional Trial Courts The complaint to enforce the US District Court judgment is one capable of pecuniary estimation. But at the same time, it is also an action based on judgment against an estate, thus placing it beyond the ambit of Section 7(a) of Rule 141. It is covered by Section 7(b)(3), involving as it does, &other actions not

There is also consensus as to the requisites for recognition of a foreign judgment and the defenses against the enforcement thereof. As earlier discussed, the exceptions enumerated in Section 48, Rule 39 have remain unchanged since the time they were adapted in this jurisdiction from long standing American rules. The requisites and exceptions as delineated under Section 48 are but a restatement of generally accepted principles of international law. Section 98 of The Restatement, Second, Conflict of Laws, states that a valid judgment rendered in a foreign nation after a fair trial in a contested proceeding will be recognized in the United States, and on its face, the term valid brings into play requirements such notions as valid jurisdiction over the subject matter and parties

involving property.& The petitioners thus paid the correct amount of filing fees, and it was a grave

Similarly, the notion that fraud or collusion may preclude the enforcement of a foreign judgment finds

abuse of discretion for respondent judge to have applied instead a clearly inapplicable rule and

affirmation with foreign jurisprudence and commentators, as well as the doctrine that the foreign

dismissed the complaint.

judgment must not constitute a clear mistake of law or fact. And finally, it has been recognized that public policy as a defense to the recognition of judgments serves as an umbrella for a variety of

Conflicts of Law- problem of recognizing foreign judgment.

concerns in international practice which may lead to a denial of recognition.

We earlier adverted to the the internationally recognized policy of preclusion,[46] as well as the principles

The viability of the public policy defense against the enforcement of a foreign judgment has been

of comity, utility and convenience of nations[47] as the basis for the evolution of the rule calling for the

recognized in this jurisdiction. This defense allows for the application of local standards in reviewing the

recognition and enforcement of foreign judgments.

foreign judgment, especially when such judgment creates only a presumptive right, as it does in cases

There have been attempts to codify through treaties or multilateral agreements the standards for the recognition and enforcement of foreign judgments, but these have not borne fruition. Yet even if there is no unanimity as to the applicable theory behind the recognition and enforcement of foreign judgments or a universal treaty rendering it obligatory force, there is consensus that the viability of such recognition and enforcement is essential. Salonga, whose treatise on private international law is of worldwide renown, points out:

Whatever be the theory as to the basis for recognizing foreign judgments, there can be little dispute that the end is to protect the reasonable expectations and demands of the parties. Where the parties have submitted a matter for adjudication in the court of one state, and proceedings there are not

wherein the judgment is against a person. The defense is also recognized within the international sphere, as many civil law nations adhere to a broad public policy exception which may result in a denial of recognition when the foreign court, in the light of the choice-of-law rules of the recognizing court, applied the wrong law to the case. The public policy defense can safeguard against possible abuses to the easy resort to offshore litigation if it can be demonstrated that the original claim is noxious to our constitutional values. There is no obligatory rule derived from treaties or conventions that requires the Philippines to recognize foreign judgments, or allow a procedure for the enforcement thereof. However, generally accepted principles of international law, by virtue of the incorporation clause of the Constitution, form part of the

laws of the land even if they do not derive from treaty obligations.[66] The classical formulation in

which form part thereof, such as those ensuring the qualified recognition and enforcement of foreign

international law sees those customary rules accepted as binding result from the combination two

judgments.[71]

elements: the established, widespread, and consistent practice on the part of States; and a psychological element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it.[67]

Thus, relative to the enforcement of foreign judgments in the Philippines, it emerges that there is a general right recognized within our body of laws, and affirmed by the Constitution, to seek recognition and enforcement of foreign judgments, as well as a right to defend against such enforcement on the grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or

While the definite conceptual parameters of the recognition and enforcement of foreign judgments have

fact.

not been authoritatively established, the Court can assert with certainty that such an undertaking is among

1 tayag vs benguet

those generally accepted principles of international law.

[68]

As earlier demonstrated, there is a widespread

practice among states accepting in principle the need for such recognition and enforcement, albeit subject to limitations of varying degrees. The fact that there is no binding universal treaty governing the practice

is not indicative of a widespread rejection of the principle, but only a disagreement as to the imposable specific rules governing the procedure for recognition and enforcement.

FACTS: Idonah Slade Perkins, an American citizen who died in New York City, left among others, two two stock certificates covering 33,002 shares of appellant, issued by Benguet Consolidated, a corporation domiciled in the Philippines. The certificates are in the possession of the County Trust Company of New

Aside from the widespread practice, it is indubitable that the procedure for recognition and

York, which is the domiciliary administrator of the estate of the deceased. Tayag, the ancillary

enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in various

administrator of Perkins’ estate in the Philippines, now wants to take possession of these stock

foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule 39 of the Rules of

certificates. CFI ordered the produce and deposit the stock certificates to Tayag, which County Trust

Court which has existed in its current form since the early 1900s. Certainly, the Philippine legal system has

Company of New York, the domiciliary administrator, refused to do so. Thus, the probate court of the

long ago accepted into its jurisprudence and procedural rules the viability of an action for enforcement of

Philippines rendered an order declaring the stock certificates as lost and ordering Benguet Consolidated

foreign judgment, as well as the requisites for such valid enforcement, as derived from internationally

to issue new stock certificates representing Perkins’ shares. Benguet Consolidated appealed the order,

accepted doctrines. Again, there may be distinctions as to the rules adopted by each particular

arguing that the stock certificates are not lost as they are in existence and currently in the possession of

state,[69] but they all prescind from the premise that there is a rule of law obliging states to allow for,

County Trust Company of New York, hence there was a failure to observe certain requirements of its by-

however generally, the recognition and enforcement of a foreign judgment. The bare principle, to our

laws before new stock certificates could be issued.

mind, has attained the status of opinio juris in international practice.

This is a significant proposition, as it acknowledges that the procedure and requisites outlined in Section

ISSUE: Whether or not the order of the lower court is proper

48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the incorporation clause of the Constitution. Rules of procedure are promulgated by the Supreme Court,[70] and could very well be abrogated or revised by the high court itself. Yet the Supreme Court is obliged, as are all State components, to obey the laws of the land, including generally accepted principles of international law

HELD:

domiciliary administrator did not appeal from the order now in question. Moreover, there is likewise the The appeal lacks merit.

express admission of appellant that as far as it is concerned, &it is immaterial ... who is entitled to the possession of the stock certificates ...& Even if such were not the case, it would be a legal absurdity to

Tayag, as ancillary administrator, has the power to gain control and possession of all assets of the

impart to such a provision conclusiveness and finality. Assuming that a contrariety exists between the

decedent within the jurisdiction of the Philippines

above by-law and the command of a court decree, the latter is to be followed.

It is to be noted that the scope of the power of the ancillary administrator was, in an earlier case, set forth by Justice Malcolm. Thus: &It is often necessary to have more than one administration of an estate. When a person dies intestate owning property in the country of his domicile as well as in a foreign country, administration is had in both countries. That which is granted in the jurisdiction of decedent's

It is understandable, as Cardozo pointed out, that the Constitution overrides a statute, to which, however, the judiciary must yield deference, when appropriately invoked and deemed applicable. It would be most highly unorthodox, however, if a corporate by-law would be accorded such a high estate in the jural order that a court must not only take note of it but yield to its alleged controlling force.

last domicile is termed the principal administration, while any other administration is termed the ancillary administration. The reason for the latter is because a grant of administration does not ex proprio vigore have any effect beyond the limits of the country in which it is granted. Hence, an administrator

2 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, G.R. No. 124110, April 20, 2001.

appointed in a foreign state has no authority in the [Philippines]. The ancillary administration is proper, whenever a person dies, leaving in a country other than that of his last domicile, property to be administered in the nature of assets of the deceased liable for his individual debts or to be distributed among his heirs.& Probate court has authority to issue the order enforcing the ancillary administrator’s right to the stock certificates when the actual situs of the shares of stocks is in the Philippines. It would follow then that the authority of the probate court to require that ancillary administrator's right to &the stock certificates covering the 33,002 shares ... standing in her name in the books of [appellant] Benguet Consolidated, Inc....& be respected is equally beyond question. For appellant is a Philippine

FACTS: 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. 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.

corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of

The cause of the non-boarding of the Fontanillas on United Airlines Flight No. 1108 makes up the bone

stock cannot therefore be considered in any wise as immune from lawful court orders.

of contention of this controversy.

The Court Order shall prevail over the Corporation by-laws

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, dismissing the

In the first place, there is no such occasion to apply such by-law. It is admitted that the foreign

complaint for there is a failure to comply with the check-in requirement. The counterclaim is likewise

dismissed as it appears that plaintiffs were not actuated by legal malice when they filed the instant

be performed, and particularly so, if the place of the making and the place of performance are the

complaint.

same. Hence, the court should apply the law of the place where the airline ticket was issued, when the

On appeal, the Court of Appeals ruled in favor of the Fontanillas. The appellate court found that there

passengers are residents and nationals of the forum and the ticket is issued in such State by the

was an admission on the part of United Airlines that the Fontanillas did in fact observe the check-in

defendant airline.

requirement. It ruled further that even assuming there was a failure to observe the check-in

The law of the forum on the subject matter is Economic Regulations No. 7 as amended by Boarding

requirement, United Airlines failed to comply with the procedure laid down in cases where a passenger

Priority and Denied Board Compensation of the Civil Aeronautics Board which provides that the check-

is denied boarding. The appellate court likewise gave credence to the claim of Aniceto Fontanilla that

in requirement be complied with before a passenger may claim against a carrier for being denied

the employees of United Airlines were discourteous and arbitrary and, worse, discriminatory. In light of

boarding:

such treatment, the Fontanillas were entitled to moral damages.

Sec. 5. Amount of Denied Boarding Compensation Subject to the exceptions provided hereinafter under

ISSUE: Whether or not the CA is correct in relying the Code of Federal Regulation Part on Oversales

Section 6, carriers shall pay to passengers holding confirmed reserved space and who have presented

(laws of USA).

themselves at the proper place and time and fully complied with the carrier ’ s check-in and

HELD: No.

reconfirmation procedures and who are acceptable for carriage under the Carrier’s tariff but who have

Notably, the appellate court relied on the Code of Federal Regulation Part on Oversales which states: 250.6 Exceptions to eligibility for denied boarding compensation.

been denied boarding for lack of space, a compensation at the rate of: xxx Therefore, since there is failure to comply with the check-in requirement, their claims are defeated.

A passenger denied board involuntarily from an oversold flight shall not be eligible for denied board compensation if: The passenger does not comply with the carrier’s contract of carriage or tariff provisions regarding ticketing, reconfirmation, check-in, and acceptability for transformation.

3 cadalin vs poea

The appellate court, 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 petitioner’s agent in Manila. It is true that the tickets were &rewritten&

FACTS:

in Washington, D.C. however, such fact did not change the nature of the original contract of carriage

On June 6, 1984, Bienvenido M.. Cadalin, Rolando M. Amul and Donato B. Evangelista, in their own

entered into by the parties in Manila.

behalf and on behalf of 728 other overseas contract workers (OCWs) instituted a class suit with the

In the case of Zalanea vs. Court of Appeals, this Court applied the doctrine of lex loci contractus.

Philippine Overseas Employment Administration (POEA) for money claims arising from their recruitment

According to the doctrine, as a general rule, the law of the place where a contract is made or entered

by AIBC and employment by BRII.

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

BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while

should be 10 years as provided by Art. 1144 of the Civil Code as their claim arise from a violation of a

AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino

contract. The POEA Administrator holds that the 10-year period of prescription should be applied but

workers for overseas employment on behalf of its foreign principals.

the NLRC provides a different view asserting that the 3-year period of the Labor Code should be

Cadalin, et al. principally sought the payment of the unexpired portion of the employment contracts,

applied. The Solicitor General, however, expressed that the 1-year period provided by the Amiri Decree

which was terminated prematurely, and secondarily, the payment of the interest of the earnings of the

should be applied.

Travel and Reserved Fund, interest on all the unpaid benefits, refund, differential pay and penalties for

ISSUES:

committing prohibited practices, as well as the suspension of the license of AIBC and the accreditation

I. Whether or not a foreign law should govern the contract of the parties.

of BRII. 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

II. If foreign law applies, whether or not the action has already prescribed. RULING:

1975 to 1983. They were all deployed at various projects undertaken by Brown & Root in several

I.

countries in the Middle East, as well as in Southeast Asia.

Amiri Decree applies.

Having been officially processed as overseas contract workers by the Philippine Government, all the

AIBC and BRII claim that NLRC acted capriciously and whimsically when it refused to enforce the

individual complainants signed standard overseas employment contracts with AIBC before their

overseas-employment contracts, which became the law of the parties. They contend that the principle

departure from the Philippines. These overseas employment contracts invariably contained terms and

that a law is deemed to be a part of a contract applies only to provisions of Philippine law in relation to

conditions regarding hours of work and compensation, termination, vacation/sick leave benefits, bonus,

contracts executed in the Philippines.

and offday pay.

The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that

In the State of Bahrain, where some of the individual complainants were deployed, His Majesty Isa Bin

the laws of the host country became applicable to said contracts if they offer terms and conditions more

Salman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23, otherwise known as the Labour Law for

favorable that those stipulated therein. While a part thereof provides that the compensation to the

the Private Sector. Some of the provisions of Amiri Decree No. 23 include a worker receiving payment

employee may be &adjusted downward so that the total computation (thereunder) plus the non-

for each extra hour equivalent to his wage entitlement increased by a minimum of 25% for hours

waivable benefits shall be equivalent to the compensation& therein agreed, another part of the same

worked during the day (50% from 7PM to 7AM); a weekly day of rest on full pay; additional sum

provision categorically states &that total remuneration and benefits do not fall below that of the host

equivalent to 150% of worker’s normal wage when required to work on his weekly day of rest or on any

country regulation and custom.&

official holiday; leave on full pay for a period of not less than 21 days for each year after a year of continuous service (28 if five years); Moreover, Art. 156 of the Amiri Decree states that a claim arising out of a contract of employment shall not be actionable after the lapse of 1 year from the date of the expiry of the contract. It appears that the suit of the complainants has already expired. Plaintiff, however, contends that the prescription period

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

claim obnoxious to the forum's public policy. To enforce the one-year prescriptive period of the Amiri

the obscurity.

Decree No. 23 as regards the claims in question would contravene the public policy on the protection to

The parties to a contract may select the law by which it is to be governed. In such a case, the foreign law

labor as enshrined in the Constitution.

is adopted as a &system& to regulate the relations of the parties, including questions of their capacity to

The prescriptive period applicable to the case should be three years as provided by the Labor Code

enter into the contract, the formalities to be observed by them, matters of performance, and so forth.

since the claim arose from labor employment.

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. A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by giving effect to the parties' own choice of the applicable law. The choice of law must, however, bear some relationship to the parties or their transaction. There is no question that the contracts sought to be

4 PAKISTAN INTERNATIONAL AIRLINES CORP. v. OPLE (1990) Facts: On December 2, 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 Farrales and the other with private respondent Mamasig.

enforced by the claimants have a direct connection with the Bahrain law because the services were

Paragraphs 5, 6, and 10 of these contracts are significant to this case. Paragraph 5 provides for the

rendered in that country.

duration of employment, a period of three (3) years but can be extended by the mutual consent of the

II.

parties. Paragraph 6 provides for termination. PIA reserves the right to terminate the agreement at any

As a general rule, a foreign procedural law will not be applied in the forum. This is true even if the action

time by giving the employee notice in writing in advance one month before the intended termination or

is based upon a foreign substantive law. A law on prescription of actions is sui generis in Conflict of Laws

in lieu thereof, by paying the employee wages equivalent to one month’s salary. Paragraph 10 provides

in the sense that it may be viewed either as procedural or substantive, depending on the

that the applicable law is the laws of Pakistan and that only the Courts of Karachi, Pakistan shall have

characterization given such a law.

jurisdiction to consider any matter arising out of or under this agreement.

The exception is when the country of the forum has a &borrowing statute.& Said statute has the

On August 2, 1980, roughly one (1) year and four (4) months prior to the expiration of the contracts of

practical effect of treating the foreign statute of limitation as one of substance. A &borrowing statute&

employment, PIA sent separate letters to private respondents advising both that their services as flight

directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law. Section 48 of the Civil Procedure Rule states that “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”. However, the Supreme Court opted not to apply Bahrain’s prescriptive period. The courts of the forum will not enforce any foreign

stewardesses would be terminated effective September 1, 1980, conformably to clause 6 (b) of the employment agreement. Subsequently, private respondents jointly instituted a complaint for illegal dismissal and non-payment of company benefits and bonuses against PIA with the then Ministry of Labor and Employment (“MOLE”).

After several failed attempts at conciliation, the MOLE hearing officer ordered the parties to submit their

The law relating to labor and employment is clearly such an area and parties are not at liberty to

position papers and evidence supporting their respective positions.

insulate themselves and their relationships from the impact of labor laws and regulations by simply

The PIA submitted its position paper, but no evidence. In an Order dated January 22, 1981, the Regional Director ordered the reinstatement of private respondents. The Order stated that private respondents had attained the status of regular employees after they had rendered more than a year of continue service; that the stipulation limiting the period of

contracting with each other. Both the Labor Arbiter and the Deputy Minister, MOLE, held that paragraph 5 of the 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 refused to give effect to said paragraph 5.

the employment contract to three (3) years was null and void as violative of the provisions of the Labor

Examining the provisions of paragraphs 5 and 6, the Court considered that those provisions must be

Code and its implementing rules and regulations on regular and casual employment.

read together. When so read, the fixed period of three (3) years specified in paragraph 5 will be seen to

On appeal, the Deputy Minister of MOLE adopted the findings of fact and conclusions of the Regional Director and affirmed the latter’s order.

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 granted by paragraph 5 by rendering such period in effect a facultative one at the option of the employer FIA. Because the net effect of paragraphs 5 and 6 of the agreement here involved is to render the employment of private

Issues: Is the contract of employment governed by the provisions therein or the general provisions of the Labor Code?

respondents basically employment at the pleasure of petitioner PIA, the Court concluded 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. 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. The relationship is much affected with public interest

Ruling: Generally, a contract freely entered into should be respected since a contract is the law between the parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306 of the Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, “provided they are not contrary to law, morals, good customs, public order or public

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 parties. There are multiple and substantive contacts between Philippine law and Philippine courts, and the relationship between the parties.

policy.” Thus, counter-balancing the principle of autonomy of contracting parties is the equally general

The contract was not only executed in the Philippines, it was also performed here, at least partially.

rule that provisions of applicable law, especially provisions relating to matters affected with public policy,

Private respondents are Philippine citizens and respondents, while petitioner, although a foreign

are deemed written into the contract.

corporation, is licensed to do business in the Philippines. The above contacts point to the Philippine

courts and administrative agencies as a proper forum for the resolution of contractual disputes between

5. In such oath, Attrill, as a director of the company, signed and made oath to, and caused to be

the parties.

recorded, as required by the law of New York, a certificate, which he knew to be false, stating that the

In any event, the petitioner 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.

whole of the capital stock of the corporation had been paid in, whereas in truth no part had been paid in, and by making such false certificate became liable, by the law of New York, for all the debts of the company contracted before January 29, 1881, including its debt to the plaintiff. 6. On March 8, 1882, by proceedings in a court of New York, the corporation was declared to be insolvent, and to have been so since July, 1880, and was dissolved. A duly exemplified copy of the record of that judgment was annexed to and made part of the bill. 7. The complaint also alleged that &at the time of its dissolution, as aforesaid, the said company was

5 Huntington v. Attrill

FACTS

indebted to the plaintiff and to other creditors to an amount far in excess of its assets; that by the law of the State of New York, all the stockholders of the company were liable to pay all its debts, each to the amount of the stock held by him, and the defendant, Henry Y. Attrill, was liable at said date, and on April 14, 1882, as such stockholder, to the amount of $340,000, the amount of stock held by him, and

1. Huntington is a resident of New York who filed a case against Equitable Gaslight Company, a

was on both said dates also severally and directly liable as a director, having signed the false report

corporation of Maryland, and against Attrill, his wife, and three daughters, which are residents of

above mentioned, for all the debts of said company contracted between February 26, 1880, and January

Canada. Huntington’s prayer was to set aside a transfer of stock which was acquired through Atrill’s

29, 1881, which debts aggregate more than the whole value of the property owned by said Attrill. &

through fraud to his creditors. Further, Huntington prayed that such stock will be paid as recovery for

8. The complaint further alleged that Attrill was in March, 1882, and had ever since remained, individually

Atrill’s liability as a director in a New York Corporation under the statute of New York.

liable in a large amount over and above the debts for which he was liable as a stockholder and director

2. The appellant, in June, 1880, became a creditor for money lent to the Rockaway Beach Improvement

in the company, and that he was insolvent, and had secreted and concealed all his property for the

Company, Limited, which carried on business in the State of New York, being incorporated pursuant to

purpose of defrauding his creditors.

Chapter 611 of the State laws of 1875.

9. The complaint then alleged that in April, 1882, Attrill acquired a large amount of stock in the Equitable

3. Sect. 21 of the Act provides that: “If any certificate or report made, or public notice given, by the

Gaslight Company of Baltimore, and forthwith transferred into his own name, as trustee for his wife,

officers of any such corporation, shall be false in any material representation, all the officers who shall

1,000 shares of such stock, and as trustee for each of his three daughters, 250 shares of the same,

have signed the same shall be jointly and severally liable for all the debts of the corporation contracted

without valuable consideration, and with intent to delay, hinder, and defraud his creditors, and especially

while they are officers thereof.”

with the intent to delay, hinder, and defraud this plaintiff of his lawful suits, damages, debts, and

4. The respondent was, in June, 1880, a director, and in that capacity an officer of the company within

demands against Attrill arising out of the cause of action on which the aforesaid judgment was

the meaning of the statute. On the 30th of that month he, along with other officers of the company,

recovered and out of the plaintiff's claim against him as a stockholder; that the plaintiff in June, 1880,

signed and verified on oath, as prescribed by sect. 37, a certificate setting forth that the whole capital

and ever since was domiciled and resident in the State of New York, and that from February, 1880, to

stock had, at its date, been paid up in cash.

December 6, 1884, Attrill was domiciled and resident in that state, and that his transfers of stock in the

gas company were made in the City of New York, where the principal office of the company then was

Issue: Whether or not the Canadian Courts have jurisdiction to hear an appeal of a decision made by the

and where all its transfers of stock were made, and that those transfers were, by the laws of New York as

New York courts pertaining to penal law?

well as by those of Maryland, fraudulent and void as against the creditors of Attrill, including the creditors of the Rockaway Company, and were fraudulent and void as against the plaintiff.

Held:

10. The complaint further, by distinct allegations, averred that those transfers, unless set aside and

The courts of Ontario were bound to pay absolute deference to any interpretation which might have

annulled by a court of equity, would deprive the plaintiff of all his rights and interests of every sort therein to which he was entitled as a creditor of Attrill at the time when those fraudulent transfers were made, and &that the said fraudulent transfers were wholly without legal consideration, were fraudulent and void, and should be set aside by a court of equity.& 11. The complaint prayed that the transfer of shares in the gas company be declared fraudulent and void and executed for the purpose of defrauding the plaintiff out of his claim as existing creditor; that the certificates of those shares in the name of Attrill as trustee be ordered to be brought into court and cancelled, and that the shares &be decreed to be subject to the claim of this plaintiff on the judgment aforesaid,& and to be sold by a trustee appointed by the court, and new certificates issued by the gas company to the purchasers, and for further relief. 12. One of the daughters demurred to the bill (complaint) because it showed that the plaintiff's claim was for the recovery of a penalty against Attrill arising under a statute of the State of New York, and because it did not state a case which entitled the plaintiff to any relief in a court of equity in the State of Maryland. 13. By a stipulation of counsel filed in the cause, it was agreed that for the purposes of the demurrer, the bill should be treated as embodying the New York statute of June 21, 1875, and that the Rockaway Beach Improvement Company, Limited, was incorporated under the provisions of that statute. 14. Having failed to recover payment, the appellant, in September, 1886, brought an action upon his decree in the Common Pleas Division of the High Court of Justice for the Province of Ontario, where the respondent resided. The only plea stated in defence was to the effect that the judgment sued on was for a penalty inflicted by the municipal law of New York; and that the action being one of a penal character ought not to be entertained by the Courts of a foreign State.

been put upon the statute of 1875 in the State of New York. They had to construe and apply an international rule, which was a matter of law entirely within the cognizance of the foreign court whose jurisdiction was invoked. Judicial decisions in the state where the cause of action arose were not precedents which must be followed, although the reasoning upon which they were founded must always receive careful consideration and might be conclusive. The court appealed to must determine for itself, in the first place, the substance of the right sought to be enforced; and, in the second place, whether its enforcement would, either directly or indirectly, involve the execution of the penal law of another state. Were any other principle to guide its decision, a court might find itself in the position of giving effect in one case, and denying effect in another, to suits of the same character, in consequence of the causes of action having arisen in different countries, or in the predicament of being constrained to give effect to laws which were, in its own judgment, strictly penal. CONFLICTS OF LAW PRINCIPLE- The rule has its foundation in the well-recognised principle that crimes, including in that term all breaches of public law punishable by pecuniary mulct or otherwise, at the instance of the State Government, or of some one representing the public, are local in this sense, that they are only cognizable and punishable in the country where they were committed. Accordingly no proceeding, even in the shape of a civil suit, which has for its object the enforcement by the State, whether directly or indirectly, of punishment imposed for such breaches by the lex fori, ought to be admitted in the Courts of any other country. Chief Justice Marshall in the fewest possible words: &The courts of no country execute the penal laws of another.& Penal laws, strictly and properly, are those imposing punishment for an offense committed against the state, and which, by the English and American constitutions, the executive of the state has the power to pardon. Statutes giving a private action against the wrongdoer are sometimes spoken of as penal in

their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy

Issue: What law should apply, Philippine or Texas?

given is strictly penal. The rule that the courts of no country execute the penal laws of another applies not only to prosecutions and sentences for crimes and misdemeanors, but to all suits in favor of the state for the

Held: Texas. (So no legitime.)

recovery of pecuniary penalties for any violation of statutes for the protection of its revenue, or other

Discussion on Renvoi and processual presumption (Not so related sa case)

municipal laws, and to all judgments for such penalties.

The doctrine is usually pertinent where the decedent is a national of one country, and a domicile of

6 Testate Estate Of Amos G. Bellis, deceased. People's Bank And Trust Company, executor. Maria Cristina

another. The decedent was both a national of Texas and a domicile thereof at the time of his death. So

Bellis And Miriam Palma Bellis, oppositors-appellants, vs. EDWARD A. BELLIS, ET AL., heirs-appellees

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

Facts:

refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling

Amos G. Bellis, citizen of Texas, had 4 legitimate surviving chidren on his first wife(divorced), 2 legitimate

for the application of the law of the place where the properties are situated, renvoi would arise, since

children on his second wife (survived him), and 3 illegitimate children Amos Bellis, Jr., Maria Cristina Bellis

the properties here involved are found in the Philippines. In the absence, however, of proof as to the

and Miriam Palma Bellis.

conflict of law rule of Texas, it should be presumed the same as ours (processual

Amos G. Bellis executed a will in the Philippines, wherein his estate should be divided:

presumption). Appellants' position is therefore not rested on the doctrine of renvoi.

a) $240,000.00 to his first wife, Mary E. Mallen;

Rationale of the ruling

(b) P120K to his 3 illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40K

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in

each

intestate or testamentary successions.

(c)the remainder shall go to his seven children by his first and second wives, to be divided equally. Subsequently, 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. The People's Bank and Trust Company(executor), paid all the bequests therein, and the partition of the remainder. 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. Lower Court: approved the final account of partition of the executor and overruled the oppositions. Based its ruling on 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.

ART. 16. Xxx - 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. It was pointed out that decedent executed two wills — one to govern his Texas estate and the other his Philippine estate —that he intended Philippine law to govern his Philippine estate. 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

Philippines. The case was filed with the Pasig RTC which eventually denied the complaint. The Court of

under the laws of Texas, there are no forced heirs or legitimes. The intrinsic validity of the provision of

Appeals affirmed the decision of the RTC.

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.

Asiavest appealed. In its defense, PNCC alleged that the foreign judgment cannot be enforced here because of want of jurisdiction, want of notice to PNCC, collusion and/or fraud, and there is a clear mistake of law or fact. Asiavest assailed the arguments of PNCC on the ground that PNCC’s counsel participated in all the proceedings in the Malaysian Court.

ISSUE: 9 ASIAVEST MERCHANT BANKERS (M) BERHAD v. CA

Whether or not the Malaysian Court judgment should be enforced against PNCC in the Philippines.

G.R. No. 110263 July 20, 2001 HELD PARTIES

Yes. PNCC failed to prove and substantiate its bare allegations of want of jurisdiction, want of notice,

The petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized under the laws of

collusion and/or fraud, and mistake of fact. On the contrary, Asiavest was able to present evidence as to

Malaysia while private respondent Philippine National Construction Corporation is a corporation duly

the validity of the proceedings that took place in Malaysia. Asiavest presented the certified and

incorporated and existing under Philippine laws.

authenticated copies of the judgment and the order issued by the Malaysian Court. It also presented correspondences between Asiavest’s lawyers and PNCC’s lawyers in and out of court which belied PNCC

FACTS

’s allegation that the Malaysian court never acquired jurisdiction over it. PNCC’s allegation of fraud is not sufficient too, further, it never invoked the same in the Malaysian Court.

In 1985, the High Court of Malaysia ordered the Philippine National Construction Corporation (PNCC) to pay $5.1 million to Asiavest Merchant Bankers (M) Berhad. This was the result of a recovery suit filed by Asiavest against PNCC in Malaysia for PNCC’s failure to complete a construction project there despite due payment from Asiavest. Despite demand, PNCC failed to comply with the judgment in Malaysia hence Asiavest filed a complaint for the enforcement of the Malaysian ruling against PNCC in the

The Supreme Court notes, to assail a foreign judgment the party must present evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Otherwise, the judgment enjoys the presumption of validity so long as it was duly certified and authenticated. In this case, PNCC failed to present the required evidence.

the Straus & Co., &There is, however, a well-established exception to the rule to the effect that a court will not enforce a contract though valid where made if its enforcement is contrary to the policy of the forum.” ISSUE: Whether or not the courts of this State (New York) must deny access to a party seeking to enforce 10 INTERCONTINENTAL HOTELS COPR. V. GOLDEN

Intercontinental Hotels Corporation (Puerto Rico), Appellant, v. Jack Golden, Respondent. Argued September 30, 1964. Decided November 19, 1964. FACTS: Defendant was a guest at plaintiff's Intercontinental Hotel in Puerto Rico from December 8 through December 14, 1960. During his stay there, in an attempt to turn chance into fortune, he played — on credit generously furnished by plaintiff — at the dice tables in the casino conducted by the hotel, lost and, when he ascertained the extent of his indebtedness, reneged. Following the loss of $6,000 in cash which defendant allegedly brought with him, plaintiff advanced chips to the defendant in the sum of $12,000 which he eventually also lost. On December 14, 1960, he delivered to plaintiff his check for $3,000, dated December 17, 1960, payable

obligations validly entered into in the Commonwealth of Puerto Rico and enforceable under Puerto Rican law. HELD: Once again we are faced with the question of when our courts may refuse to enforce a foreign right, though valid where acquired, on the ground that its &enforcement is contrary to [the public] policy of the forum& Since these gambling debts were validly contracted in Puerto Rico and the Puerto Rican law provides a remedy for their enforcement absent a clear showing that the enforcement of the causes of action here would &offend our sense of justice or menace the public welfare&, we may not withhold aid. We do not think that public policy forbids us to enforce these contracts.

at the Manufacturers Trust Co. in New York City, in part payment of his gambling debt. The check was

Substantially all of the commentators agree that foreign-based rights should be enforced unless the

not honored when presented for payment. For the remaining $9,000 defendant had given plaintiff 13 I.

judicial enforcement of such a contract would be the approval of a transaction which is inherently

O. U.'s. At Trial Term in New York, plaintiff recovered judgment on the check and the I. O. U.'s for the

vicious, wicked or immoral, and shocking to the prevailing moral sense. There was no strong public

full $12,000 plus interest of $1,102.50.

policy to prevent the enforcement of such contracts according to the law of the place of performance.

It is conceded that in Puerto Rico gambling has been legalized and that plaintiff's casino was duly licensed at the time defendant used its facilities. In Puerto Rico there is specific statutory provision for the enforcement of legal gambling debts there and many times that the Supreme Court of Puerto Rico has upheld the enforcement of such claims. The courts of New York will generally enforce contracts made in other jurisdictions. The validity of such contracts is determined by the law of the place where the contracts are made. But as the court in

The courts are not free to refuse to enforce a foreign right at the pleasure of the judges, to suit the individual notion of expediency or fairness. They do not close their doors unless help would violate some * * * prevalent conception of good morals& In the present case there is no indication that the evils of gambling, which New York prohibits and Puerto Rico has licensed, will spill over into our community if these debts are enforced in New York

courts. The New York constitutional provisions were adopted with a view toward protecting the family man of meager resources from his own imprudence at the gaming tables There is nothing immoral per se in the contract before us, but injustice would result if citizens of this State were allowed to retain the benefits of the winnings in a State where such gambling is legal, but to renege if they were losers. We think, therefore, that this case falls within the consistent practice of enforcing rights validly created by the laws of a sister State which do not tend to disturb our local laws or corrupt the public.