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3. Jurisdiction over the subject matter

IDONAH PERKINS V. ROXAS

72 PHIL 514 (1941)
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 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.
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B. WAYS OF DEALING WITH A CONFLICTS PROBLEM

Court may: (1) Dismiss the case for lack of jurisdiction or on the ground of forum non conveniens or (2)
assume jurisdiction and apply either forum or foreign law.

1. DISMISS THE CASE

Doctrine of Forum Non Conveniens— Even if the court assumes jurisdiction over the parties and
the subject matter, it may decline to try the case on the ground that the case may be more suitably tried
elsewhere. This Latin phrase means “The forum is inconvenient”.

HEINE V. NEW YORK INSURANCE COMPANY

45 F2D 426 (1940) (District Court of Oregon)

Facts
The New York Life Insurance Company and the Guardian Insurance Company ("the insurance companies")
were corporations created in New York, USA. As conditions to be allowed to conduct business in Germany,
they were made to agree to be supervised by German authorities, to invest the proceeds of policies in
German securities, and to establish a local agency to whom summons may be served. The insurance
companies were later sued before courts in both the US and Germany for the recovery on some 240 life
insurance policies issued in Germany to German nationals, payable in German currency.

Arguments for the Plaintiff

As the US courts have jurisdiction over the subject matter and the parties, they have no choice but to try the
case.

Issue
Whether or not the US courts may dismiss the case on the ground of forum non conveniens.

Held
Yes. Under the circumstances, the case may be more suitably tried before German courts.

Ratio Decidendi
The courts in both jurisdictions are competent to try the case and summons may be served upon the
insurance companies in both jurisdictions. Requiring the insurance companies to defend their interests in the
US would subject them to great and unnecessary inconvenience and expenses, including the possibility of
having to bring documentary evidence all the way from their office in Germany. Moreover, trying the case in
the US additionally burden the courts in that jurisdiction, to the detriment of other litigants. The assumption
of jurisdiction over a case the cause of action of which arose from another jurisdiction and wherein both
parties are non-residents is discretionary upon the court

IN RE: UNION CARBIDE

634 F. SUPP 842 (S.N.Y. 1986)

In Re: Union Carbide Gas Plant Disaster

Facts
On the night of 23 December 1984, a gas leak occurred at the pesticide plant of Union Carbide India Limited
(UCIL) in Bhopal, India resulting in the deaths of more than 2,000 people and injuries to more than 200,000
others. . Thereafter, the India passed a law giving the Indian government the exclusive right to represent the
victims of the disaster. As thus, the Indian government filed a complaint before a New York district court.
The Union Carbide Corporation (UCC) filed a motion to dismiss on the ground of forum non conveniens and
lack of personality. The district court granted the motion on three conditions, namely, that UCC: (1) consent
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to the jurisdiction of Indian courts and waive defenses based on the Statute of Limitations; (2) agree to the
satisfy the judgement of the Indian court, provided it complied with the requirements of due process; and (3)
be subject to discovery under the Federal Rules of Civil Procedure of the US. Consequently, the Indian
government filed sued the UCIL and the UCC before the a district court in India. The UCC appealed the
conditions.

Arguments for the Defendant

While Indian courts may provide an adequate alternative forum, they adhere to standards of due process
much lower than that followed in the US. Hence, US courts must supervise the proceedings before Indian
courts.

Issue
Whether or not the dismissal on the ground of forum non conveniens is proper.

Held
Yes. The Indian courts are adequate alternative fora.

Ratio Decidendi
Almost all of the estimated 200,000 plaintiffs are citizens and residents of India who have revoked their
representation by an American counsel in favor of the Indian government, which now prefers Indian courts.
Further, the UCC has already consented to the assumption of jurisdiction by the Indian courts. All the
witnesses and evidence are likewise in India.
As to the conditions, the first is valid in order to secure the viability of the Indian courts as alternate fora. The
second is problematic as it gives the impression that foreign judgments the UCC's consent is necessary in
order for the judgement of the Indian courts to be enforceable in New York. The laws of New York, in fact,
recognizes that a judgment rendered by a foreign court may be enforced in that State except if such judgment
was rendered in violation of due process or without jurisdiction over the person of the defendant. The request
of UCC of supervision by US courts of Indian courts is untenable. The power of US courts cannot extend
beyond their territorial jurisdiction. Moreover, once US courts dismiss a case on the ground of forum non
conveniens, they lose any further jurisdiction over the case, except in case of an action for enforcement later
on. Denial of due process may, however, constitute a defense against the enforcement of the Indian
judgment. The third condition is likewise invalid. Basic justice dictates that both parties must be given equal
access to evidence in each other's possession. Hence, both parties maybe subjected to the modes of discovery
under the Federal Rules of Civil Procedure on equal terms subject to approval by Indian courts.

WING ON COMPANY VS. SYYAP

64 OG 8311 (1967)

1. Wing On Company was incorporated in New York while Syyap Co was incorporated in the Philippines.
2. The two companies entered into a contract in New York with an agreement that Syyap would pay Wing
On for the clothing materials. Then the profit would be divided by them.
3. However, Syyap failed to settle the debt/pay in full.
4. Thus, Wing On sued Syyap in the Philippines
5. Trial Court ruled in favor of Wing On.
6. Syyap argued that the Court has no jurisdiction since Wing On is not licensed in the PH; thus has no
legal capacity in the eyes of the law and that the Court should have declined jurisdiction on the ground of
forum non conveniens.

Issue: WON the Trial Court has jurisdiction

Held: YES. Decision affirmed.

- In this case, defendant is incorporated in the Philippines. So the PH Court is the convenient forum.
- More so, the case is a personal action, thus the case may be commenced where the defendant resides or
may be found or where the plaintiff resides AT THE ELECTION of the plaintiff.
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- ONLY cases when Court cannot decline jurisdiction:
- 1) When the forum is the only state where jurisdiction over defendant can be obtained.
- 2) When the forum provides procedural remedies not available in another State.

2. ASSUME JURISDICTION

A court may choose to assume jurisdiction over a conflicts problem and apply forum or foreign law.
Since the basic law is the law of the forum, it should be applied whenever there is a good reason to do so.

The presence of any one of the ff factors would justify the application of internal law:
1) A specific law of the forum decrees that internal law should apply;
2) The proper foreign law was not properly pleaded and proved; or
3) The case falls under any of the exceptions to the application of foreign law.

Forum law decrees application of internal law

Our civil code provides for when our court has to apply forum law. Examples are: Art 16 which
makes real and personal property subject to the law of the country where it is situated, Art 819 which
prohibits Filipinos from executing joint wills even if valid in the country where they were executed.

Foreign law was not properly pleaded and proved

Forum law should be applied when there is failure to plead and prove the pertinent foreign law.

FLEUMER V. HIX
54 PHIL 610 (1930)

1. FACTS:
-Fleumer, the special administrator of Hix, presented the latter's will for probate in the Philippines
-However, the will did not show the following:
*acknowledgment by Hix in the presence of 2 competent witnesses
*WON the will was subscribed in presence of testator, and of each other
- The Will was executed in West Virginia where Hix was residing.
- Fleumer argued that the Will was executed properly in accordance of the West Virginia Law.
- He presented a copy of Section 3868 of Act 1882 of the West Virginia Code.

- Issue: WON the Will can be probated in the PH (NO)

-
-
HELD:
- The Courts of the Philippines are not authorized to take judicial notice of the laws various States of the
American Union. Such laws must be proved as facts.
- Should prove foreign law first before courts of RP take cognizance
-no judicial notice, foreign laws must be proved as facts
-no showing that the book from which an extract was taken was printed or published under the authority
of the State of West Virginia
-No attestation by the certificate of the officer having charge of the original, under the seal of the State of
West Virginia (Section 301, Code of Civil Procedure back then? Now R132.24-25)
-no evidence to show that the extract from the laws of West Virginia was in force at the time the alleged
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will was executed
-Due execution of the will was not established: only showed testimony of the petitioner

PHIL TRUST CO. V. BOHONAN

106 PHIL 997 (1960)

1. The Will of CO Bohanan is presented for probate in PH CFI Manila who declared him to be a citizen of
Nevada, USA.
2. The Phil Trust Company, as executor, was granted probate.
3. In a subsequent hearing, the Nevada Law was not presented.
4. Magdalena Bohanan, widow of testator and their 2 children questioned the validity of the will which
gave a grandson P90,819 of the P211K. The same amount was also given to his brother and sister. Only
P6K was left to each of his children.

Issue: WON the Will can be probated in the PH

Held: YES

-The Old Civil Code is applicable in this case because the testator died in 1944. The OCC provides
that successional rights to personal property are to be governed by the national law of the person whose
succession is in question.
- In the proceedings, it was found that the testator is a citizen of USA because he had selected this as
his permanent residence.
-It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will.
-The records of the case shows that during the hearing (Magdalena withdrawing her share of P20K)
in October 4, 1954, the foreign law was introduced by appellants counsels and was admitted by the Court.
- More so, the other appellants, children of the testator, do not dispute the above-quoted provision of
the laws of the State of Nevada.
-Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada
especially Sec 9905 of the Compiled Nevada Laws of 1925 can be taken judicial notice of this Court w/o
proof that such law has been offered at the hearing of the project of partition.
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Foreign Law Cannot be Applied

2. The case falls under any of the exceptions to the application of foreign law:

when foreign law is

(1) contrary to an important public policy of the forum
(2) penal in nature
(3) procedural in nature
(4) purely fiscal/administrative in nature
(5) (will) work undeniable injustice to the citizens of the forum
(6) case involves real/personal property situated in theforum
(7) application of foreign law might endanger vital interest of the state (forum)
(8) contrary to good morals

CHAPTER V
CHOICE OF LAW

A. THE CORRELATION BETWEEN JURISDICTION AND CHOICE OF LAW

B. APPROCHES TO CHOICE OF LAW

All choice of law problems seek to answer two important questions: (1) What legal system should
control a case? and (2) To what extent should the chosen legal system regulate the situation?

1. Traditional Approach

Vested Rights Theory

An act done in a foreign jurisdiction gives rise to the existence of a right if the laws of that State
provides so. Hence, if the laws of the state where the last act occurred create no legal right, there is nothing
for the forum to recognize and enforce, even if its own law creates such right.

GRAY V. GRAY
87. NH. 82 (NEW HAMPSHIRE COURT, 1934)

Facts:
-The parties are spouses who drove from New Hampshire to Maine where the accident happened.
- The wife sued the husband in New Hampshire, a state which permits spouses to sue one another.
-In contrast, in Maine, spouses are barred from filing suits against each other.
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Issue: WON lex loci governs ( law of the country where a transaction is performed) YES

Held:
- If there is no ground of action in the sovereignty where a tort is alleged to have occurred, there is
none anywhere.
- Whatever would be a bar to an action in this state although the matter pleaded would not be a bar if
the cause of action had arisen here.
- A New Hampshire wife injured by the negligence of her husband while driving in Maine is barred
from recovery against him in this state because under Maine Law a wife has no action for negligence against
her husband.
-Persons having the status of husband and wife take with them into a sister state.

ALABAMA GREAT SOUTHERN CO V. CARROLL

SC OF ALABAMA, 1892

Facts:
- Carroll is a resident of Alabama. He was a brakeman employed by Alabama Great who is an
Alabama Corporation. His contract of employment was entered into in Alabama.
-Alabama Great operated a railroad.
- Carroll was injured in Mississippi as a result of a negligent failure to spot defective link between 2
freight cars which the defendant’s employees were under duty to inspect..
- Under Mississippi law, Carroll could not recover against his employer because the negligence was
caused by the act of a “fellow servant”.
- Under Alabama law, absolute liability was imposed on the company for injuries suffered by
employees in the course of their employment.
- Thus, Carroll brought suit in Alabama which favored Carroll.

Issue: WON Alabama Great is liable for the injury which occurred in Mississippi

Held: NO Decision reversed.

-In reversing the lower court’s decision, the Court state: (1) There is no law in Mississippi that was
similar to the Employer’s Act of Alabama, (2) There could be no recovery in Alabama for injuries to the
person sustained in Mississippi unless the infliction was actionable under Mississippi law, (3) No injury
resulted in Alabama and (4) The action could only be brought in Mississippi where the injury occurred.

Local Law Theory

“The power of the state to regulate within its territory has no limitation, except such as may be
imposed by its own positive law” and second, that in conflict of laws problems the court does not enforce a
foreign right but a right created by its own law by treating a case as a purely domestic case that does not
involve a foreign element.”

Cavers’ Principle of Preference

- A choice of law should be determined by “considerations of justice and social expediency” and
should not be the result of the mechanical application of a rule or principle of selection.
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-When a court is faced with a question whether to reject the law of the forum and to admit a rule of
law of foreign jurisdiction, it should: (1) scrutinize the even giving rise to the issue, (2) compare carefully the
preferred rule of law and the result of which its application might work in the case at bar with the rule of the
forum, (3) appraise these results from the standpoint of justice.
- In Cavers’ view, only when this process of analysis is followed can we successfully set aside the
stifling effects of ensuring certainty and uniformity.

2. MODERN APPROACHES

Place of the most significant relationship “significant contacts”

Rejected the single connecting factor of the place where the “last act” occurred and adopted an
approach which identified a plurality of factors that must be considered in the light of choice-of-law
principles.

AUTEN V. AUTEN
308 NY 155 (1954)

Facts:
- The Autens were married in England in 1917.
- The husband left the wife and 2 children and moved to New York.
- The wife later went to NY where a separation agreement was executed.
- However, the husband failed to give financial support so his wife brought a suit in England.
- The lower court, applied NY Law, found for the defendant.
Issue: WON lower court erred in applying NY law (YES)

Held: YES. Decision reversed. English law should apply.

-“Grouping of Contacts” gives to the place “having most interest in the problem” paramount control over the
legal issues arising out of a particular factual context, thus allowing the forum to apply the policy of the
jurisdiction “most intimately concerned with the outcome of the particular litigation.”
-English should apply.
-It hardly needs stating that it is England which has all the significant contacts.
-The agreement was between British spouses who got married in England, have children in England.
-It concerned an English wife who came to NY only to discuss their differences as husband and wife and
after that she went back to England.
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HAAG V. BARNES
9. NY. 2D 554 (1961)

Facts:
-An illegitimate child was born to Norman Barnes, an Illinois lawyers and Dorothy Haag, a NY legal
secretary.
-After she became pregnant, Haag went to California.
- Haag and Barnes executed a support agreement in Chicago which contained a choice of law clause in
favor of Illinois.
- However, NY law gave no binding effects between parents of an illegitimate child unless it was judicially
approved.
- Haag and the child returned to NY and filed this support for action.

- Issue: WON the suit should have been filed in Illinois YES
Held: YES

Applying the significant contacts in this case, they point to Illinois.

1) Both parties designated in the agreement as being of “Chicago, Illinois” and the defendants place of
business is always in Illinois
2) Child was born in Illinois
3) Persons designated as agents for principals are Illinois residents
4) All contributions for support always have been made form Chicago.