CONFLICT OF LAWS

CASE BRIEF: HILTON VS. GUYOT

Hilton v. Guyot, 159 U.S. 113 (1895), was a United States security, both private respondents and a certain Lowe,
Supreme Court case where the Court ruled that the executed a Joint and Several guarantee in favor of
recognition and enforceability of a foreign judgment rested HSBC where it stipulates that all liabilities arising from it may
on the "comity of nations," namely whether there would be be enforced in accordance with the laws of Singapore and that
any reciprocity and mutual recognition by the foreign the Courts of Singapore will have jurisdiction over it.
jurisdiction from which the judgment was issued. When Easter failed to pay its obligation, HSBC filed a
complaint for collection of a sum of money against
Hilton established the fundamental basis for the recognition
respondents in RTC of Quezon City. Private respondent filed
and enforcement of foreign judgments in the United
a petition for prohibition with preliminary injunction in the
States, remaining "the most detailed exposition of any
IAC in which The IAC rendered a decision enjoining the RTC
American court" on this principle. [3] It is also viewed as the
Quezon City from taking further cognizance of the case and
quintessential statement of comity in international law, and
to dismiss the same for filing with the proper court of
is one of the earliest decisions of the U.S. Supreme Court to
Singapore which is the proper forum.
assert that international law is part of U.S. law.
RULE: Issue: Does Philippines have jurisdiction over the Case?
Comity is neither a matter of absolute obligation, on the one
hand, nor of mere courtesy and good will, upon the other. Ruling: YES.
But it is the recognition which one nation allows within its While it is true that "the transaction took place in
territory to the legislative, executive or judicial acts of Singaporean setting" and that the Joint and Several
another nation, having due regard both to international Guarantee contains a choice-of-forum clause, the very
duty and convenience, and to the rights of its own citizens essence of due process dictates that the stipulation be
or of other persons who are under the protection of its liberally construed. One basic principle underlies all rules of
laws. jurisdiction in International Law: a State does not have
FACTS: jurisdiction in the absence of some reasonable basis for
Plaintiff Guyot, an administrator of a French firm, sued exercising it, whether the proceedings are in rem quasi in
defendants Libbey and Hilton, who were U.S. citizens doing rem or in personam.
business in Paris, France, in a French court under a contract In the ordinary habits of life, anyone would be disinclined to
claim. Defendants appeared and litigated the merits of the litigate before a foreign tribunal, with more reason as a
case, alleging fraud on the part of plaintiffs, and sought an defendant. The defense of Sherman & Reloj that the
injunction from bringing suit, but the court would not admit complaint should have been filed in Singapore is based merely
evidence and entered a directed verdict for plaintiff. The on technicality. They did not even claim, much less prove, that
judgment was affirmed in a French appeals court. Plaintiff the filing of the action here will cause them any unnecessary
Guyot sought to enforce the French judgment in the district trouble, damage, or expense. On the other hand, there is no
court of New York, which, without retrial on the merits, showing that petitioner BANK filed the action here just to
directed a verdict for plaintiffs in the amount a French court harass Sherman & Reloj.
had awarded. Libbey and Hilton sought review in the United The parties did not thereby stipulate that only the courts of
States Supreme Court. Singapore, to the exclusion of all the rest, has jurisdiction.
ISSUE: Neither did the clause in question operate to divest
Did the comity of the United States require the court to give Philippine courts of jurisdiction. In International Law,
conclusive effect to the judgments of the courts of France? jurisdiction is often defined as the light of a State to exercise
ANSWER: No authority over persons and things w/in its boundaries
subject to certain exceptions. A State is competent to take
CONCLUSION: hold of any judicial matter it sees fit by making its courts and
The United States Supreme Court found that comity was agencies assume jurisdiction over all kinds of cases brought
reciprocal. Because France did not recognize final before them.
judgments of the United States and would try such However, whether a suit should be entertained or dismissed
judgments anew, French judgments would be given the on the basis of the principle of forum non conveniens
same treatment. Thus, the comity of the United States did depends largely upon the facts of the particular case and is
not require the court to give conclusive effect to the addressed to the sound discretion of the trial court. Thus,
judgments of the courts of France. Defendants could receive the IAC should not have relied on such principle (In a conflict
a new trial. problem, a court will simply refuse to entertain the case if it
is not authorized by law to exercise jurisdiction. And even if
it is so authorized, it may still refuse to entertain the case by
HSBC v Jack Robert Sherman GR 72494 applying the principle of forum non conveniens.)

Facts: Eastern Book Supply, a company incorporated in

Singapore, was granted by HSBC’s Singapore branch an
overdraft facility payable monthly with 3% interest. As a
 contended that the alleged overpricing of the property
PHILSEC INVESTMENT et al vs.CA et al prejudiced only petitioner ATHONA, as buyer, but not
G.R. No. 103493 June 19, 1997 PHILSEC and BPI-IFL which were not parties to the sale and
whose only participation was to extend financial
accommodation to ATHONA under a separate loan
Facts: Private respondent Ventura O. Ducat obtained
agreement.
separate loans from petitioners Ayala and Philsec in the sum
The trial court granted Ducat’s motion to dismiss, stating that
of US$2,500,000.00, secured by shares of stock owned by
“the evidentiary requirements of the controversy may be
Ducat with a market value of P14,088,995.00. In order to
more suitably tried before the forum of the litis pendentia in
facilitate the payment of the loans, private respondent 1488,
the U.S., under the principle in private international law of
Inc., through its president, private respondent Drago Daic,
forum non conveniens,” even as it noted that Ducat was not
assumed Ducat’s obligation under an Agreement, dated
a party in the U.S. case.
January 27, 1983, whereby 1488, Inc. executed a Warranty
• A separate hearing was held with regard to 1488, Inc. and
Deed with Vendor’s Lien by which it sold to petitioner
Daic’s motion to dismiss. On March 9, 1988, the trial court 3
Athona Holdings, N.V. (hereafter called ATHONA) a parcel of
granted the motion to dismiss filed by 1488, Inc. and Daic on
land in Harris County, Texas, U.S.A., for US$2,807,209.02,
the ground plaintiff ATHONA is the subject matter of the
while PHILSEC and AYALA extended a loan to ATHONA in
pending case in the United States District Court which,
the amount of US$2,500,000.00 as initial payment of the
under the doctrine of forum non conveniens, is the better (if
purchase price. The balance of US$307,209.02 was to be
not exclusive) forum to litigate matters needed to
paid by means of a promissory note executed by ATHONA in
determine the assessment and/or fluctuations of the fair
favor of 1488, Inc. Subsequently, upon their receipt of the
market value of real estate situated in Houston, Texas,
US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA
U.S.A.
released Ducat from his indebtedness and delivered to 1488,
The Court of Appeals also held that Civil Case No. 16563 was
Inc. all the shares of stock in their possession belonging to
an action in personam for the recovery of a sum of money
Ducat.
for alleged tortious acts, so that service of summons by
• As ATHONA failed to pay the interest on the balance of
publication did not vest the trial court with jurisdiction over
US$307,209.02, the entire amount covered by the note
1488, Inc. and Drago Daic. The dismissal of Civil Case No.
became due and demandable.
16563 on the ground of forum non conveniens was likewise
• Private respondent 1488, Inc. sued petitioners PHILSEC,
affirmed by the Court of Appeals on the ground that the
AYALA, and ATHONA in the United States for payment of
case can be better tried and decided by the U.S. court:
the balance of US$307,209.02 and for damages for breach of
The U.S. case and the case at bar arose from only one main
contract and for fraud allegedly perpetrated by petitioners
transaction, and involve foreign elements, to wit: 2) the
in misrepresenting the marketability of the shares of stock
seller, 1488 Inc. is a non-resident foreign corporation; 3)
delivered to 1488, Inc. under the Agreement. Originally
although the buyer, Athona Holdings, a foreign corporation
instituted in the United States District Court of Texas, 165th
which does not claim to be doing business in the Philippines,
Judicial District, where it was docketed as Case No. 85-57746,
is wholly owned by Philsec, a domestic corporation, Athona
the venue of the action was later transferred to the United
Holdings is also owned by BPI-IFL, also a foreign
States District Court for the Southern District of Texas, where
corporation; 4) the Warranty Deed was executed in Texas,
1488, Inc. filed an amended complaint, reiterating its
U.S.A.
allegations in the original complaint.
• It is important to note in connection with the first point
• While Civil Case No. H-86-440 was pending in the United
that while the present case was pending in the Court of
States, petitioners filed a complaint “For Sum of Money with
Appeals, the United States District Court for the Southern
Damages and Writ of Preliminary Attachment” against
District of Texas rendered judgment 5 in the case before it.
private respondents in the Regional Trial Court of Makati,
The judgment, which was in favor of private respondents,
where it was docketed as Civil Case No. 16563. The
was affirmed on appeal by the Circuit Court of Appeals.
complaint reiterated the allegation of petitioners in their
respective counterclaims in Civil Action No. H-86-440 of the
United States District Court of Southern Texas that private
respondents committed fraud by selling the property at a ISSUE: Whether Civil Case No. 16536 is barred by the
price 400 percent more than its true value of judgment of the U.S. court.
US$800,000.00. Petitioners claimed that, as a result of HELD: Decision of the Court of Appeals is REVERSED and
private respondents’ fraudulent misrepresentations, Civil Case No. 16563 is REMANDED to the Regional Trial
ATHONA, PHILSEC, and AYALA were induced to enter into Court of Makati for consolidation with Civil Case No. 92-1070
the Agreement and to purchase the Houston property. and for further proceedings in accordance with this decision
Petitioners prayed that private respondents be ordered to Jurisdiction, with respect to actions in personam, as
return to ATHONA the excess payment of US$1,700,000.00 distinguished from actions in rem, a foreign judgment
and to pay damages. On April 20, 1987, the trial court issued merely constitutes prima facie evidence of
a writ of preliminary attachment against the real and the justness of the claim of a party and, as such, is subject to
personal properties of private respondents. proof to the contrary. 9 Rule 39, §50 provides:
Private respondent Ducat moved to dismiss Civil Case No. Sec. 50. Effect of foreign judgments. — The effect of a
16563 on the grounds of (1) litis pendentia, vis-a-vis Civil judgment of a tribunal of a foreign country, having
Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., jurisdiction to pronounce the judgment is as follows:
(2) forum non conveniens, and (3) failure of petitioners
PHILSEC and BPI-IFL to state a cause of action. Ducat (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 The next time she was escorted by SAUDIA’s legal officer to
judgment may be repelled by evidence of a want of court, the judge rendered a decision against her sentencing
jurisdiction, want of notice to the party, collusion, fraud, or her to five months imprisonment and to 286 lashes.
clear mistake of law or fact. Apparently, she was tried by the court which found her
guilty of (1) adultery; (2) going to a disco, dancing and
It was error therefore for the Court of Appeals to summarily listening to the music in violation of Islamic laws; and (3)
rule that petitioners’ action is barred by the principle of res socializing with the male crew, in contravention of Islamic
judicata. Petitioners in fact questioned the jurisdiction of the tradition.
U.S. court over their persons, but their claim was brushed
aside by both the trial court and the Court of Appeals. After denial by SAUDIA, Morada sought help from Philippine
In this case, the trial court abstained from taking jurisdiction Embassy during the appeal. Prince of Makkah dismissed the
solely on the basis of the pleadings filed by private case against her. SAUDIA fired her without notice.
respondents in connection with the motion to dismiss. It
failed to consider that one of the plaintiffs (PHILSEC) is a Morada filed a complaint for damages against SAUDIA, with
domestic corporation and one of the defendants (Ventura the RTC of QC. SAUDIA filed Omnibus Motion to Dismiss which
Ducat) is a Filipino, and that it was the extinguishment of raised the ground that the court has no jurisdiction, among
the latter’s debt which was the object of the transaction others which was denied
under litigation. The trial court arbitrarily dismissed the case
even after finding that Ducat was not a party in the U.S. ISSUE: Whether RTC of QC has jurisdiction to hear and try
case. the case
• It was error we think for the Court of Appeals and the trial
court to hold that jurisdiction over 1488, Inc. and Daic could HELD: YES. The RTC of QC has jurisdiction and Philippine law
not be obtained because this is an action in personam and should govern.Its jurisdiction has basis on Sec. 1 of RA 7691
summons were served by extraterritorial service. Rule 14, and Rules of Court on venue. Pragmatic considerations,
§17 on extraterritorial service provides that service of including the convenience of the parties, also weigh heavily
summons on a non-resident defendant may be effected out in favor of the RTC QC assuming jurisdiction. Paramount is
of the Philippines by leave of Court where, among others, the private interest of the litigant. Weighing the relative
“the property of the defendant has been attached within claims of the parties, the court a quo found it best to hear
the Philippines.” 18 It is not disputed that the properties, the case in the Philippines. Had it refused to take cognizance
real and personal, of the private respondents had been of the case, it would be forcing Morada to seek remedial
attached prior to service of summons under the Order of action elsewhere, i.e. in the Kingdom of Saudi Arabia where
the trial court dated April 20, 1987. she no longer maintains substantial connections. That would
have caused a fundamental unfairness to her.
Saudi Arabian Airlines v. CA - Case Digest
By filing a complaint, Morada has voluntarily submitted to
the jurisdiction of the court. By filing several motions and
Facts: praying for reliefs (such as dismissal), SAUDIA has effectively
Saudi Arabian Airlines (SAUDIA) hired Milagros Morada as a submitted to the trial court’s jurisdiction.
Flight Attendant for its airlines based in Jeddah, Saudi
Arabia. While on a lay-over in Jakarta, Morada went to a
disco with fellow crew members Thamer & Allah, both Saudi
nationals. Because it was almost morning when they
returned to their hotels, they agreed to have breakfast
together at the room of Thamer. In which Allah left on some
pretext. Thamer attempted to rape Morada but she was
rescued by hotel personnel when they heard her cries for
help. Indonesian police came and arrested Thamer and Hasegawa v. Kitamura Case Digest
Allah, the latter as an accomplice.
FACTS:
Morada refused to cooperate when SAUDIA’s Legal Officer
and its base manager tried to negotiate the immediate
release of the detained crew members with Jakarta police.
Nippon, a Japanese consultancy firm entered into a one-year
Through the intercession of Saudi Arabian government,
Thamer and Allah were deported and, eventually, again put ICA contract with Kitamura, a Japanese national
in service by SAUDIA. But Morada was transferred to
Manila. permanently residing in the Philippines. On February 2000,
Kitamura was informed that Nippon is no longer renewing
One year and a half year later, Morada was again ordered to
see SAUDIA’s Chief Legal Officer. Instead, she was brought his ICA and his services would only be utilized until March 31,
to a Saudi court where she was asked to sign a blank 2000. Aggrieved, Kitamura now filed an action for specific
document, which turned out to be a notice to her to appear
in court. Monada returned to Manila. performance and damages with the RTC of Lipa City. Nippon
 WILLIAM F. GEMPERLE v. HELEN SCHENKER, GR No. L-
filed a motion to dismiss. The trial and appellate court ruled
18164, 1967-01-23
in favor of Kitamura, hence this petition.
Facts:
ISSUE: Appeal, taken by plaintiff, William F. Gemperle, from a
decision of the Court of First Instance of Rizal dismissing this
case for lack of jurisdiction over the person of defendant
Whether or not the RTC of Lipa City has jurisdiction for Paul Schenker and for want of cause of action against his
wife and... co-defendant, Helen Schenker, said Paul
contracts executed by and between two foreign nationals in Schenker "being in no position to be joined with her as party
foreign country wholly written in a foreign language? defendant, because he is beyond the reach of the
magistracy of the Philippine courts."
Paul Schenker hereinafter referred to as Schenker acting
RULING: through his wife and attorney-in-fact, Helen Schenker
hereinafter referred to as Mrs. Schenker filed with the Court
of First Instance of Rizal, a complaint... against herein
Yes. In the judicial resolution of conflict problems, 3 plaintiff William F. Gemperle, for the enforcement of
Schenker's allegedly initial subscription to the shares of
consecutive phases are involved: jurisdiction, choice of law,
stock of the Philippine-Swiss Trading Co., Inc.
and recognition and enforcement of judgments. Jurisdiction
Mrs. Schenker had caused to be published some allegations
and choice of law are two different concepts. Jurisdiction thereof and other matters, which were impertinent,...
irrelevant and immaterial to said case... being false and
considers whether it is fair to cause a defendant to travel to
derogatory to the reputation, good name and credit of
this state; choice of law asks the further question whether Gemperle
the application of a substantive law which will determine Gemperle commenced the present action against the
Schenkers... the lower court rendered the decision above
the merits of the case is fair to both parties. The power to
referred to. A reconsideration thereof having been denied,
exercise jurisdiction does not automatically give a state a Gemperle interposed the present appeal.
constitutional authority to apply forum law. Issues:
whether or not the lower court had acquired jurisdiction
over the person of Schenker.
The only issue is the jurisdiction, hence, choice of law rules
Ruling:
as raised by the petitioner is inapplicable and not yet called
he, a Swiss citizen, residing in Zurich, Switzerland, has not
for. The petitioner prematurely invoked the said rules
been actually served with summons in the Philippines,
before pointing out any conflict between the laws of Japan although... the summons addressed to him and Mrs.
Schenker had been served personally upon her in the
and the Philippines.
Philippines. It is urged by plaintiff that jurisdiction over the
person of Schenker has been secured through voluntary
Doctrine: appearance on his part, he not having made a special
appearance... to assail the jurisdiction over his person, and
an answer having been filed in this case... we hold that the
Jurisdiction over the subject matter in a judicial proceeding lower court had acquired jurisdiction over said defendant,
is conferred by the sovereign authority which establishes through service of the summons addressed to him upon
and organizes the court. It is given only by law and in the Mrs. Schenker, it... appearing from said answer that she is
manner prescribed by law. It is further determined by the the representative and attorney-in-fact of her husband in
allegations of the complaint irrespective of whether the the aforementioned civil case
plaintiff is entitled to all or some of the claims asserted
therein. In the judicial resolution of conflicts problems, three In other words, Mrs. Schenker had authority... to sue, and
consecutive phases are involved: jurisdiction, choice of law, had actually sued, on behalf of her husband, so that she
and recognition and enforcement of judgments. was, also, empowered to represent him in suits filed against
Corresponding to these phases are the following questions: him, particularly in a case, like the one at bar, which is a
consequence of the action brought by her on his behalf.
1. Where can or should litigation be initiated? (Jurisdiction) decision appealed from should be, as it is hereby, reversed,
2. Which law will the court apply? (Choice of Law? and the case remanded to the lower court
3. Where can the resulting judgment be enforced?
(Enforcement)
 all lawsuits involving a "foreign" law element where a difference
What is the significance of conflict of in result will occur depending on which laws are applied.
laws?
Explanation
When such conflicts, or differences, exist, procedures need
to be in place to resolve them; the term conflict of laws When a case comes before a court and all the main features of
(sometimes also conflicts or conflicts law) describes the the case are local, the court will apply the lex fori, the
body of law of each country or state that is designed to prevailing municipal law, to decide the case. But if there are
resolve problems arising from the differences between "foreign" elements to the case, the forum court may be obliged
under the conflict of laws system to consider:
legal systems.

 whether the forum court has jurisdiction to hear the

CONFLICT OF case;
BASIS LAW LAW OF NATIONS  it must then characterise the issues, i.e. allocate the
factual basis of the case to its relevant legal classes;
Municipal in and
Nature character International in character  then apply the choice of law rules to decide which law
is to be applied to each class.

Dealt with by The lex situs is a choice of law rule applied to identify the lex
private individuals; Sovereign states and other causae for cases involving title to, or the possession and use
governs individuals entities possessing of property. In law, there are two types of property:
in their private international personality,
transactions which e.g., UN; governs states in
Persons involve a foreign their relationships amongst
involved element themselves

Generally affected by
Private transactions public interest; those in
Transactions between private general are of interest
involved individuals only to sovereign states

May be peaceful or
forcible
Peaceful: includes
diplomatic negotiation,
tender & exercise of
good offices, mediation,
inquiry & conciliation,
arbitration, judicial
settlement by ICJ,
reference to regional
agencies
Forcible: includes
severance of diplomatic
relations, retorsions,
reprisals, embargo,
boycott, non-
intercourse, pacific
blockades, collective
Remedies
and Resort to municipal measures under the UN
Sanctions tribunals Charter, and war.

Definition of lex situs

Further reading

The term lex situs (Latin) refers to the law of the place in which
property is situated for the purposes of the conflict of laws. For
example, property may subject to tax pursuant to the law of the
place of the property or by virtue of the domicile of its owner.
Conflict is the branch of public law regulating