Principle of Comity in CL

Philipp Morris Incorporated, et al., v. CA, et al, G.R. No. 91332 July 16, 1993

Avon Insurance PLC. , et al., vs. Court of Appeals, et al, GR No. 97642 August 29, 1997

Emerald Garment Manufacturing Corporation, vs.

Hon. Court of Appeals, et al, GR No. 100098 December 29, 1995.

Forum non-conveniens

PHILSEC Investment Corporation, BPI-International Finance Limited, and Athona

Holdings, N.V., vs. The Honorable Court of Appeals, 1488, inc., Drago Daic, Ventura O.
Ducat, Precioso R. Perlas, and William H. Craig, G.R. No. 103493 June 19, 1997

Second. Nor is the trial court's refusal to take cognizance of the case justifiable under the
principle of  forum non conveniens. First, a motion to dismiss is limited to the grounds under
Rule 16, §1, which does not include forum non conveniens. [Development Bank of the
Philippines v. Pundogar, 218 SCRA 118 (1993).

The propriety of dismissing a case based on this principle requires a factual determination,
hence, it is more properly considered a matter of defense. Second, while it is within the
discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do
so only after "vital facts are established, to determine whether special circumstances" require
the court's desistance. {K.K. Shell Sekiyu Osaka Hatsubaisho v. Court of Appeals, 188
SCRA 145 at 153 (1990); Hongkong and Shanghai Banking Corp. v. Sherban, 176 SCRA
331 at 339 (1987).

Enforceability of Foreign Judgment

In Soorajmull Nagarmull vs. Binalbagan-Isabela Sugar Co. Inc., [Nagarmull v. Binalbagan-

17 

Isabela Sugar Co., Inc., 33 SCRA 46 (1970), one of the early Philippine cases on the
enforcement of foreign judgments, this Court has ruled that a judgment for a sum of money
rendered in a foreign court is presumptive evidence of a right between the parties and their
successors-in-interest by subsequent title, but when suit for its enforcement is brought in a
Philippine court, such judgment may be repelled by evidence of want of jurisdiction, want of
notice to the party, collusion, fraud or clear mistake of law or fact. In Northwest Orient Airlines,
Inc., vs. Court of Appeals, the Court has said that a party attacking a foreign judgment is tasked
18 

with the burden of overcoming its presumptive validity.

PHILIPPINE ALUMINUM WHEELS, INC., vs.FASGI ENTERPRISES, INC., [G.R. No.
137378, October 12, 2000]

TEODORO RANCES, vs. NATIONAL LABOR RELATIONS COMMISSION and

PACIFIC ASIA OVERSEAS CORPORATION, G.R. No. 101135 July 14, 1995

Petitioners' contention is meritorious. While this Court has given the effect of res judicata to
foreign judgments in several cases,   it was after the parties opposed to the judgment had
7

been given ample opportunity to repel them on grounds allowed under the law.   It is not
8

necessary for this purpose to initiate a separate action or proceeding for enforcement of the
foreign judgment. What is essential is that there is opportunity to challenge the foreign
judgment, in order for the court to properly determine its efficacy. This is because in this
jurisdiction, with respect to actions in personam, as distinguished from actions in rem, a
foreign judgment merely constitutes  prima facie evidence of the justness of the claim of a
party and, as such, is subject to proof to the contrary.   Rule 39, §50 provides:
9

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

of a foreign country, having jurisdiction to pronounce the judgment is as
follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive

upon the title to the thing;

(b) In case of a judgment against a person, the judgment is presumptive

evidence of a right as between the parties and their successors in interest by a
subsequent title; but the judgment may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact.

Thus, in the case of General Corporation of the Philippines v. Union Insurance Society of
Canton, Ltd.,   which private respondents invoke for claiming conclusive effect for the
10

foreign judgment in their favor, the foreign judgment was considered res judicata because
this Court found "from the evidence as well as from appellant's own pleadings"   that the
11

foreign court did not make a "clear mistake of law or fact" or that its judgment was void for
want of jurisdiction or because of fraud or collusion by the defendants. Trial had been
previously held in the lower court and only afterward was a decision rendered, declaring the
judgment of the Supreme Court of the State of Washington to have the effect of res judicata
in the case before the lower court. In the same vein, in Philippines International Shipping
Corp. v.  Court of Appeals,   this Court held that the foreign judgment was valid and
12

enforceable in the Philippines there being no showing that it was vitiated by want of notice to
the party, collusion, fraud or clear mistake of law or fact. The  prima facie presumption under
the Rule had not been rebutted.

In the case at bar, it cannot be said that petitioners were given the opportunity to challenge
the judgment of the U.S. court as basis for declaring it res judicata or conclusive of the rights
of private respondents. The proceedings in the trial court were summary. Neither the trial
court nor the appellate court was even furnished copies of the pleadings in the U.S. court or
apprised of the evidence presented thereat, to assure a proper determination of whether the
issues then being litigated in the U.S. court were exactly the issues raised in this case such
that the judgment that might be rendered would constitute res judicata. As the trial court
stated in its disputed order dated March 9, 1988.

On the plaintiff's claim in its Opposition that the causes of action of this case
and the pending case in the United States are not identical,  precisely the Order
of January 26, 1988 never found that the causes of action of this case and the
case pending before the USA Court, were identical. (emphasis added)

It was error therefore for the Court of Appeals to summarily rule that petitioners'
action is barred by the principle of res judicata. Petitioners in fact questioned the
jurisdiction of the U.S. court over their persons, but their claim was brushed aside by
both the trial court and the Court of Appeals. 13

Moreover, the Court notes that on April 22, 1992, 1488, Inc. and Daic filed a petition for the
enforcement of judgment in the Regional Trial Court of Makati, where it was docketed as
Civil Case No. 92-1070 and assigned to Branch 134, although the proceedings were
suspended because of the pendency of this case. To sustain the appellate court's ruling that
the foreign judgment constitutes res judicata and is a bar to the claim of petitioners would
effectively preclude petitioners from repelling the judgment in the case for enforcement. An
absurdity could then arise: a foreign judgment is not subject to challenge by the plaintiff
against whom it is invoked, if it is pleaded to resist a claim as in this case, but it may be
opposed by the defendant if the foreign judgment is sought to be enforced against him in a
separate proceeding. This is plainly untenable. It has been held therefore that:

[A] foreign judgment may not be enforced if it is not recognized in the

jurisdiction where affirmative relief is being sought. Hence, in the interest of
justice, the complaint should be considered as a petition for the recognition of
the Hongkong judgment under Section 50 (b), Rule 39 of the Rules of Court in
order that the defendant, private respondent herein, may present evidence of
lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and law, if
applicable. 14

7 Philippine International Shipping Corp. v. Court of Appeals, 172 SCRA 810 (1989);
General Corporation of the Philippines v. Union Insurance Society of Canton Ltd., G.R. No.
L-2303, Dec. 29, 1951 (unreported); Boudard v. Tait, 67 Phil. 170 (1939).

8 Hang Lung Bank v. Saulog, 201 SCRA 137 (1991).

9 Boudard v. Tait, 67 Phil. 170.

10 G.R. No. L-2303, Dec. 29, 1951.

11 Id., p.6.

12 172 SCRA 810.

13 C.A. Decision, p. 6; Rollo, p. 52.

14 Hang Lung Bank v. Saulog, 201 SCRA 137.

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

principles of comity, utility and convenience of nations as the basis for the evolution of the rule
47 

calling for the recognition and enforcement of foreign judgments. The US Supreme Court
in Hilton v. Guyot relied heavily on the concept of comity, as especially derived from the
48 

landmark treatise of Justice Story in his Commentaries on the Conflict of Laws of 1834. Yet the
49 

notion of "comity" has since been criticized as one "of dim contours" or suffering from a number
50 

of fallacies. Other conceptual bases for the recognition of foreign judgments have evolved such
51 

as the vested rights theory or the modern doctrine of obligation.

52

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. The
members of the European Common Market accede to the Judgments Convention, signed in 1978,
which eliminates as to participating countries all of such obstacles to recognition such as
reciprocity and révision au fond. The most ambitious of these attempts is the Convention on the
53 

Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, prepared
in 1966 by the Hague Conference of International Law. While it has not received the
54 

ratifications needed to have it take effect, it is recognized as representing current scholarly

55 

thought on the topic. Neither the Philippines nor the United States are signatories to the
56 

Convention.

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. Steiner and Vagts
note:

.  .  . The notion of unconnected bodies of national law on private international law, each
following a quite separate path, is not one conducive to the growth of a transnational
community encouraging travel and commerce among its members. There is a
contemporary resurgence of writing stressing the identity or similarity of the values that
systems of public and private international law seek to further – a community interest in
common, or at least reasonable, rules on these matters in national legal systems. And
such generic principles as reciprocity play an important role in both fields. 57

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 tainted with irregularity, they may fairly be expected
to submit, within the state or elsewhere, to the enforcement of the judgment issued by the
court. 58

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. Similarly, the notion that fraud or collusion may preclude the
59 

enforcement of a foreign judgment finds affirmation with foreign jurisprudence and

commentators, as well as the doctrine that the foreign judgment must not constitute "a clear
60 

mistake of law or fact." And finally, it has been recognized that "public policy" as a defense to
61 

the recognition of judgments serves as an umbrella for a variety of concerns in international

practice which may lead to a denial of recognition.62

The viability of the public policy defense against the enforcement of a foreign judgment has
been recognized in this jurisdiction. This defense allows for the application of local
63 

standards in reviewing the foreign judgment, especially when such judgment creates only a
presumptive right, as it does in cases wherein the judgment is against a person. The 64 

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
65 

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. The classical formulation in international law sees those customary rules accepted
66 

as binding result from the combination two 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

While the definite conceptual parameters of the recognition and enforcement of foreign
judgments have not been authoritatively established, the Court can assert with certainty that such
an undertaking is among those generally accepted principles of international law. As earlier
68 
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.

Aside from the widespread practice, it is indubitable that the procedure for recognition and
enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in
various foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule
39 of the Rules of Court which has existed in its current form since the early 1900s. Certainly,
the Philippine legal system has long ago accepted into its jurisprudence and procedural rules the
viability of an action for enforcement of foreign judgment, as well as the requisites for such valid
enforcement, as derived from internationally accepted doctrines.  Again, there may be
distinctions as to the rules adopted by each particular state, but they all prescind from the
69 

premise that there is a rule of law obliging states to allow for, however generally, the recognition
and enforcement of a foreign judgment. The bare principle, to our 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 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, and could very well be abrogated or revised by the high court itself. Yet the Supreme
70 

Court is obliged, as are all State components, to obey the laws of the land, including generally
accepted principles of international law which form part thereof, such as those ensuring the
qualified recognition and enforcement of foreign judgments. 71

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 fact.

The preclusion of an action for enforcement of a foreign judgment in this country merely due to
an exhorbitant assessment of docket fees is alien to generally accepted practices and principles in
international law. Indeed, there are grave concerns in conditioning the amount of the filing fee on
the pecuniary award or the value of the property subject of the foreign decision. Such pecuniary
award will almost certainly be in foreign denomination, computed in accordance with the
applicable laws and standards of the forum. The vagaries of inflation, as well as the relative low-
72 

income capacity of the Filipino, to date may very well translate into an award virtually
unenforceable in this country, despite its integral validity, if the docket fees for the enforcement
thereof were predicated on the amount of the award sought to be enforced. The theory adopted
by respondent judge and the Marcos Estate may even lead to absurdities, such as if applied to an
award involving real property situated in places such as the United States or Scandinavia where
real property values are inexorably high. We cannot very well require that the filing fee be
computed based on the value of the foreign property as determined by the standards of the
country where it is located.
As crafted, Rule 141 of the Rules of Civil Procedure avoids unreasonableness, as it recognizes
that the subject matter of an action for enforcement of a foreign judgment is the foreign judgment
itself, and not the right-duty correlatives that resulted in the foreign judgment.  In this particular
circumstance, given that the complaint is lodged against an estate and is based on the US District
Court's Final Judgment, this foreign judgment may, for purposes of classification under the
governing procedural rule, be deemed as subsumed under Section 7(b)(3) of Rule 141, i.e.,
within the class of "all other actions not involving property." Thus, only the blanket filing fee of
minimal amount is required.

46 
Supra note 32.

47 
Supra note 17.

48 
Supra  note 18.

H. Steiner & D. Vagts, Transnational Legal Problems: Materials and Text (2nd ed., 1976), at
49 

775.

50 
Ibid.

51 
See  Salonga, supra note 27, at 66.

52 
Id. at 502-503.

53 
Scoles & Hays, supra note 27, at 970.

Steiner & Vagts, supra note 51, at 808.  "A decision rendered in one of the Contracting States
54 

shall be entitled to recognition and enforcement in another Contracting State under the terms of
this Convention – (1) if the decision was given by a court considered to have jurisdiction within
the meaning of this Convention, and (2) if it is no longer subject to ordinary forms of review in
the State of origin." Convention on the Recognition and Enforcement of Foreign Judgments in
Civil and Commercial Matters, Chapter II, Article 4.

To date, only Cyprus, the Netherlands, Portugal and Kuwait have either ratified or acceded to
55 

the Convention.

56 
Steiner & Vagts, supra note 51.

57 
Steiner & Vagts, supra note 51,at 776.

58 
Salonga, supra note 51, at 502.

Steiner & Vagts, supra note 27, at 779. "A policy common to all legal systems is to provide for
59 

the final resolution of disputes. The policy is furthered by each nation's adoption of a view of
'jurisdiction in the international sense' which recognizes the foreign court's assertion of
jurisdiction as satisfying its own notions of due process in circumstances in which it itself would
have asserted jurisdiction." Soles & Hay, supra note 27, at 976; citing Hay, International versus
Interstate Conflicts Law in the United States, 35 Rabels Zeitschrift 429,450 n. 101 (1971) and
Cherun v. Frishman, 236 F. Supp. 292 (D.D.C. 1964).  Salonga, in affirming the rule of want of
jurisdiction, cites the commentaries of Cheshire, Wolff, Goodrich and Nussbaum.

60 
See,  e.g., Salonga, supra note 27 at 513.

Ibid; citing  Henderson v. Henderson, 6 Q.B. (1844) 288; Vanquelin v. Bouard, 15 C.B. (N.S.

61 

1863) 341; Godard v. Gray, L.R. 6 Q.B. 139 (1870); Vadala v. Lawes 25 Q.B.D. (1890) 319,
316; cf. Chandler v. Peketz, 297 U.S. 609, 56 S.Ct., 80 L.Ed. 881 (1936); Cheshire, 661-664;
Wolff, 268; Goodrich, 603.

62 
Soles & Hay, supra note 27, at 978.

"Thus, when the foreign law, judgment or contract is contrary to a sound and established public
63 

policy of the forum, the said foreign law, judgment or order shall not be applied." Bank of
America v. American Realty Corp., 378 Phil. 1279, 1296 (1999); citing Philippine Conflict of
Laws, Eight Edition, 1996, Paras, page 46. "Las sentencias de tribunals extranjeros no pueden
ponerse en vigor en Filipinas si son contrarias a las leyes, costumbres y orden público. Si dichas
decisiones, por la simple teoría de reciprocidad, cortesía judicial y urbanidad internacional son
base suficiente para que nuestros tribunales decidan a tenor de las mismas, entonces nuestros
juzgados estarían en la pobre tessitura de tener que dictar sentencias contrarias a nuestras
leyes, costumbres y orden público. Esto es absurdo." Querubin v. Querubin, 87 Phil. 124, 133.
(1950).

64 
See Section 48, Rule 39, Rules of Civil Procedure.

65 
Soles & Hays, supra note 27, at 979.

"[It] is generally recognized that, subject to [exceptions], a rule of general customary

66 

international law is binding on all States, whether or not they have participated in the practice
from which it sprang." H. Thirlway, "The Sources of International Law", International Law (ed.
by M.Evans, 1st ed., 2003), at 124.

"Not only must the acts concerned amount to a settled practice, but they must also be such, or
67 

be carried out in such a way, as to be evidence of a belief that this practice is rendered obligatory
by the existence of a rule of law requiring it. The need for such a belief, i.e., the existence of a
subjective element, is implicit in the very notion of the opinion juris sive necessitatis.  North Sea
Continental Shelf, Judgment, ICJ Reports 1969, p. 3, para. 77; cited in H. Thirlway, ibid.

"The problems that arise in the enforcement of foreign judgments are generally to be solved by
68 

the principles of international law. The Philippines by its Constitution, adopts the generally
accepted principles of international law. F. Gupit, "Enforcement of Foreign Judgments and
Arbitral Awards", XXIII J. Integ. Bar. Phil. 3, at 69.
 Divergent practices do not necessarily preclude recognition of a customary norm. In reviewing
69 

the question of the existence of customary rules forbidding the use of force or intervention, the
International Court of Justice pertinently held: "It is not to be expected that in the practice of
States the application of the rules in question should have been perfect, in the sense that States
should have refrained, with complete consistency, from the use of force or from intervention in
each other's internal affairs. The Court does not consider that, for a rule to be established as
customary, the corresponding practice must be in absolutely rigorous conformity with the
rule. In order to deduce the existence of customary rules, the Court deems it sufficient that the
conduct of States, should, in general, be consistent with such rules, and that instances of State
conduct inconsistent with a given rule should generally have been treated as breaches of that
rule, not as indications of recognition of a new rule." (emphasis supplied) Military and
Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Merits,
Judgment, ICJ Reports 1986, p. 14, para. 186; citing in H. Thirlway, supra note 66.

70 
And other inferior courts, relative to their jurisdictions.

Sec. 2, Art. II, 1987 Const., which states "The Philippines renounces war as an instrument of
71 

national policy, adopts the generally accepted principles of international law as part of the law of
the land and adheres to the policy of peace, equality, justice, freedom, cooperation and amity
with all nations.

Indeed, the valuation of foreign money judgments remains a matter of debate in international
72 

law. In the United States, Section 144 of the Restatement, Second, Conflicts of Laws (1971)
adopts the rule that the forum would convert the currency into local currency as of the date of the
award. However, this rule has been criticized. In England, the judgment debtor may now effect
payment either in the foreign currency in the amount due or in local currency equivalent to the
foreign currency on the date of payment. French and German law similarly permit the expression
of a judgment in foreign currency. Soles & Hays, supra note 27, at 973.

Probate of Wills

our laws do not prohibit the probate of wills executed by foreigners abroad although the same
have not as yet been probated and allowed in the countries of their execution. A foreign will can
be given legal effects in our jurisdiction. Article 816 of the Civil Code states that the will of an
alien who is abroad produces effect in the Philippines if made in accordance with the formalities
prescribed by the law of the place where he resides, or according to the formalities observed in
his country.6 IN RE: IN THE MATTER OF THE PETITION TO APPROVE THE WILL
OF RUPERTA PALAGANAS WITH PRAYER FOR THE APPOINTMENT OF
SPECIAL ADMINISTRATOR, MANUEL MIGUEL PALAGANAS and BENJAMIN
GREGORIO PALAGANAS, Petitioners,
vs.
ERNESTO PALAGANAS, Respondent. [G.R. No. 169144               January 26, 2011]