SECOND DIVISION
G.R. No. 139325 April 12, 2005PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI DIMARANAN, SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class Plaintiffs in Class Action No. MDL 840, United States District Court of Hawaii, Petitioner,
vs.
HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding Judge of Branch 137, Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through its court appointed legal representatives in Class Action MDL 840, United States District Court of Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr., Respondents.
D E C I S I O N
TINGA, J.:
Our martial law experience bore strange unwanted
fruits, and we have yet to finish weeding out its bitter crop. While the
restoration of freedom and the fundamental structures and processes of
democracy have been much lauded, according to a significant number, the
changes, however, have not sufficiently healed the colossal damage
wrought under the oppressive conditions of the martial law period. The
cries of justice for the tortured, the murdered, and the desaparecidos
arouse outrage and sympathy in the hearts of the fair-minded, yet the
dispensation of the appropriate relief due them cannot be extended
through the same caprice or whim that characterized the ill-wind of
martial rule. The damage done was not merely personal but institutional,
and the proper rebuke to the iniquitous past has to involve the award
of reparations due within the confines of the restored rule of law.
The petitioners in this case are prominent victims of human rights violations1
who, deprived of the 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. The clash has been for now
interrupted by a trial court ruling, seemingly comported to legal logic,
that required the petitioners to pay a whopping filing fee of over Four
Hundred Seventy-Two Million Pesos (P472,000,000.00) in
order that they be able to enforce a judgment awarded them by a foreign
court. There is an understandable temptation to cast the struggle
within the simplistic confines of a morality tale, and to employ
short-cuts to arrive at what might seem the desirable solution. But
easy, reflexive resort to the equity principle all too often leads to a
result that may be morally correct, but legally wrong.
Nonetheless, the application of the legal principles
involved in this case will comfort those who maintain that our
substantive and procedural laws, for all their perceived ambiguity and
susceptibility to myriad interpretations, are inherently fair and just.
The relief sought by the petitioners is expressly mandated by our laws
and conforms to established legal principles. The granting of this
petition for certiorari is warranted in order to correct the legally
infirm and unabashedly unjust ruling of the respondent judge.
The essential facts bear little elaboration. On 9 May
1991, a complaint was filed with the United States District Court (US
District Court), District of Hawaii, against the Estate of former
Philippine President Ferdinand E. Marcos (Marcos Estate). The action was
brought forth by ten Filipino citizens2
who each alleged having suffered human rights abuses such as arbitrary
detention, torture and rape in the hands of police or military forces
during the Marcos regime.3
The Alien Tort Act was invoked as basis for the US District Court's
jurisdiction over the complaint, as it involved a suit by aliens for
tortious violations of international law.4
These plaintiffs brought the action on their own behalf and on behalf
of a class of similarly situated individuals, particularly consisting of
all current civilian citizens of the Philippines, their heirs and
beneficiaries, who between 1972 and 1987 were tortured, summarily
executed or had disappeared while in the custody of military or
paramilitary groups. Plaintiffs alleged that the class consisted of
approximately ten thousand (10,000) members; hence, joinder of all these
persons was impracticable.
The institution of a class action suit was warranted
under Rule 23(a) and (b)(1)(B) of the US Federal Rules of Civil
Procedure, the provisions of which were invoked by the plaintiffs.
Subsequently, the US District Court certified the case as a class action
and created three (3) sub-classes of torture, summary execution and
disappearance victims.5
Trial ensued, and subsequently a jury rendered a verdict and an award
of compensatory and exemplary damages in favor of the plaintiff class.
Then, on 3 February 1995, the US District Court, presided by Judge
Manuel L. Real, rendered a Final Judgment (Final Judgment)
awarding the plaintiff class a total of One Billion Nine Hundred Sixty
Four Million Five Thousand Eight Hundred Fifty Nine Dollars and Ninety
Cents ($1,964,005,859.90). The Final Judgment was eventually affirmed by the US Court of Appeals for the Ninth Circuit, in a decision rendered on 17 December 1996.6
On 20 May 1997, the present petitioners filed Complaint with the Regional Trial Court, City of Makati (Makati RTC) for the enforcement of the Final Judgment. They alleged that they are members of the plaintiff class in whose favor the US District Court awarded damages.7
They argued that since the Marcos Estate failed to file a petition for
certiorari with the US Supreme Court after the Ninth Circuit Court of
Appeals had affirmed the Final Judgment, the decision of the US
District Court had become final and executory, and hence should be
recognized and enforced in the Philippines, pursuant to Section 50, Rule
39 of the Rules of Court then in force.8
On 5 February 1998, the Marcos Estate filed a motion
to dismiss, raising, among others, the non-payment of the correct filing
fees. It alleged that petitioners had only paid Four Hundred Ten Pesos
(P410.00) as docket and filing fees, notwithstanding
the fact that they sought to enforce a monetary amount of damages in the
amount of over Two and a Quarter Billion US Dollars (US$2.25 Billion).
The Marcos Estate cited Supreme Court Circular No. 7, pertaining to the
proper computation and payment of docket fees. In response, the
petitioners claimed that an action for the enforcement of a foreign
judgment is not capable of pecuniary estimation; hence, a filing fee of
only Four Hundred Ten Pesos (P410.00) was proper, pursuant to Section 7(c) of Rule 141.9
On 9 September 1998, respondent Judge Santiago Javier Ranada10 of the Makati RTC issued the subject Order
dismissing the complaint without prejudice. Respondent judge opined
that contrary to the petitioners' submission, the subject matter of the
complaint was indeed capable of pecuniary estimation, as it involved a
judgment rendered by a foreign court ordering the payment of definite
sums of money, allowing for easy determination of the value of the
foreign judgment. On that score, Section 7(a) of Rule 141 of the Rules
of Civil Procedure would find application, and the RTC estimated the
proper amount of filing fees was approximately Four Hundred Seventy Two
Million Pesos, which obviously had not been paid.
Not surprisingly, petitioners filed a Motion for Reconsideration, which Judge Ranada denied in an Order dated 28 July 1999. From this denial, petitioners filed a Petition for Certiorari under Rule 65 assailing the twin orders of respondent judge.11
They prayed for the annulment of the questioned orders, and an order
directing the reinstatement of Civil Case No. 97-1052 and the conduct of
appropriate proceedings thereon.
Petitioners submit that their action is incapable of
pecuniary estimation as the subject matter of the suit is the
enforcement of a 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 Rules of Court,
as required by Section 6, Rule 1 of the Rules of Civil Procedure,
particularly the inexpensive disposition of every action.
Petitioners invoke Section 11, Article III of the
Bill of Rights of the Constitution, which provides that "Free access to
the courts and quasi-judicial bodies and adequate legal assistance shall
not be denied to any person by reason of poverty," a mandate which is
essentially defeated by the required exorbitant filing fee. The
adjudicated amount of the filing fee, as arrived at by the RTC, was
characterized as indisputably unfair, inequitable, and unjust.
The Commission on Human Rights (CHR) was permitted to intervene in this case.12
It urged that the petition be granted and a judgment rendered, ordering
the enforcement and execution of the District Court judgment in
accordance with Section 48, Rule 39 of the 1997 Rules of Civil
Procedure. For the CHR, the Makati RTC erred in interpreting the action
for the execution of a foreign judgment as a new case, in violation of
the principle that once a case has been decided between the same parties
in one country on the same issue with finality, it can no longer be
relitigated again in another country.13 The CHR likewise invokes the principle of comity, and of vested rights.
The Court's disposition on the issue of filing fees
will prove a useful jurisprudential guidepost for courts confronted with
actions enforcing foreign judgments, particularly those lodged against
an estate. There is no basis for the issuance a limited pro hac vice
ruling based on the special circumstances of the petitioners as victims
of martial law, or on the emotionally-charged allegation of human
rights abuses.
An examination of Rule 141 of the Rules of Court
readily evinces that the respondent judge ignored the clear letter of
the law when he concluded that the filing fee be computed based on the
total sum claimed or the stated value of the property in litigation.
In dismissing the complaint, the respondent judge
relied on Section 7(a), Rule 141 as basis for the computation of the
filing fee of over P472 Million. The provision states:
SEC. 7. Clerk of Regional Trial Court.-
(a) For filing an action or a permissive counterclaim or money claim against an estate not based on judgment,
or for filing with leave of court a third-party, fourth-party, etc.,
complaint, or a complaint in intervention, and for all clerical services
in the same time, if the total sum claimed, exclusive of interest, or
the started value of the property in litigation, is:
| 1. Less than |
– | |
| 2. |
– | |
| 3. |
– | |
| 4. |
– | |
| 5. |
– | |
| 6. |
– | |
| 7. |
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| 8. For each |
– |
(Emphasis supplied)
Obviously, the above-quoted provision covers, on one
hand, ordinary actions, permissive counterclaims, third-party, etc.
complaints and complaints-in-interventions, and on the other, money
claims against estates which are not based on judgment. Thus, the
relevant question for purposes of the present petition is whether the
action filed with the lower court is a "money claim against an estate
not based on judgment."
Petitioners' complaint may have been lodged against an estate, but it is clearly based on a judgment, the Final Judgment
of the US District Court. The provision does not make any distinction
between a local judgment and a foreign judgment, and where the law does
not distinguish, we shall not distinguish.
A reading of Section 7 in its entirety reveals
several instances wherein the filing fee is computed on the basis of the
amount of the relief sought, or on the value of the property in
litigation. The filing fee for requests for extrajudicial foreclosure of
mortgage is based on the amount of indebtedness or the mortgagee's
claim.14
In special proceedings involving properties such as for the allowance
of wills, the filing fee is again based on the value of the property.15 The aforecited rules evidently have no application to petitioners' complaint.
Petitioners rely on Section 7(b), particularly the
proviso on actions where the value of the subject matter cannot be
estimated. The provision reads in full:
SEC. 7. Clerk of Regional Trial Court.-
(b) For filing
1. Actions where the value
of the subject matter
cannot be estimated --- P 600.00
2. Special civil actions except
judicial foreclosure which
shall be governed by
paragraph (a) above --- P 600.00
3. All other actions not
involving property --- P 600.00
In a real action, the assessed value of the property,
or if there is none, the estimated value, thereof shall be alleged by
the claimant and shall be the basis in computing the fees.
It is worth noting that the provision also provides
that in real actions, the assessed value or estimated value of the
property shall be alleged by the claimant and shall be the basis in
computing the fees. Yet again, this provision does not apply in the case
at bar. A real action is one where the plaintiff seeks the recovery of
real property or an action affecting title to or recovery of possession
of real property.16
Neither the complaint nor the award of damages adjudicated by the US
District Court involves any real property of the Marcos Estate.
Thus, respondent judge was in clear and serious error
when he concluded that the filing fees should be computed on the basis
of the schematic table of Section 7(a), as the action involved pertains
to a claim against an estate based on judgment. What provision, if any,
then should apply in determining the filing fees for an action to
enforce a foreign judgment?
To resolve this question, a proper understanding is
required on the nature and effects of a foreign judgment in this
jurisdiction.
The rules of comity, utility and convenience of
nations have established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are reciprocally
respected and rendered efficacious under certain conditions that may
vary in different countries.17 This principle was prominently affirmed in the leading American case of Hilton v. Guyot18 and expressly recognized in our jurisprudence beginning with Ingenholl v. Walter E. Olsen & Co.19
The conditions required by the Philippines for recognition and
enforcement of a foreign judgment were originally contained in Section
311 of the Code of Civil Procedure, which was taken from the California
Code of Civil Procedure which, in turn, was derived from the California
Act of March 11, 1872.20
Remarkably, the procedural rule now outlined in Section 48, Rule 39 of
the Rules of Civil Procedure has remained unchanged down to the last
word in nearly a century. Section 48 states:
SEC. 48. 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;
In either case, the judgment or final order 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.
There is an evident distinction between a foreign judgment in an action in rem and one in personam. For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an action in personam, the
foreign judgment is presumptive, and not conclusive, of a right as
between the parties and their successors in interest by a subsequent
title.21
However, in both cases, the foreign judgment is susceptible to
impeachment in our local courts on the grounds of want of jurisdiction
or notice to the party,22 collusion, fraud,23 or clear mistake of law or fact.24
Thus, the party aggrieved by the foreign judgment is entitled to defend
against the enforcement of such 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.25
It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign judgment26, even if such judgment has conclusive effect as in the case of in rem
actions, if only for the purpose of allowing the losing party an
opportunity to challenge the foreign judgment, and in order for the
court to properly determine its efficacy.27 Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity.28
The rules are silent as to what initiatory procedure
must be undertaken in order to enforce a foreign judgment in the
Philippines. But there is no question that the filing of a civil
complaint is an appropriate measure for such purpose. A civil action is
one by which a party sues another for the enforcement or protection of a
right,29
and clearly an action to enforce a foreign judgment is in essence a
vindication of a right prescinding either from a "conclusive judgment
upon title" or the "presumptive evidence of a right."30
Absent perhaps a statutory grant of jurisdiction to a quasi-judicial
body, the claim for enforcement of judgment must be brought before the
regular courts.31
There are distinctions, nuanced but discernible,
between the cause of action arising from the enforcement of a foreign
judgment, and that arising from the facts or allegations that occasioned
the foreign judgment. They may pertain to the same set of facts, but
there is an essential difference in the right-duty correlatives that are
sought to be vindicated. For example, in a complaint for damages
against a tortfeasor, the cause of action emanates from the violation of
the right of the complainant through the act or omission of the
respondent. On the other hand, in a complaint for the enforcement of a
foreign judgment awarding damages from the same tortfeasor, for the
violation of the same right through the same manner of action, the cause
of action derives not from the tortious act but from the foreign
judgment itself.
More importantly, the matters for proof are
different. Using the above example, the complainant will have to
establish before the court the tortious act or omission committed by the
tortfeasor, who in turn is allowed to rebut these factual allegations
or prove extenuating circumstances. Extensive litigation is thus
conducted on the facts, and from there the right to and amount of
damages are assessed. On the other hand, in an action to enforce a
foreign judgment, the matter left for proof is the foreign judgment
itself, and not the facts from which it prescinds.
As stated in Section 48, Rule 39, the actionable
issues are generally restricted to a review of jurisdiction 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 repetitive
litigation on claims and issues.32
Otherwise known as the policy of preclusion, it seeks to protect party
expectations resulting from previous litigation, to safeguard against
the harassment of defendants, to insure that the task of courts not be
increased by never-ending litigation of the same disputes, and – in a
larger sense – to promote what Lord Coke in the Ferrer's Case of 1599 stated to be the goal of all law: "rest and quietness."33
If every judgment of a foreign court were reviewable on the merits, the
plaintiff would be forced back on his/her original cause of action,
rendering immaterial the previously concluded litigation.34
Petitioners appreciate this distinction, and rely
upon it to support the proposition that the subject matter of the
complaintthe enforcement of a foreign judgmentis incapable of
pecuniary estimation. Admittedly the proposition, as it applies in this
case, is counter-intuitive, and thus deserves strict scrutiny. For in
all practical intents and purposes, the matter at hand is capable of
pecuniary estimation, down to the last cent. In the assailed Order, the respondent judge pounced upon this point without equivocation:
The Rules use the term "where the value of the
subject matter cannot be estimated." The subject matter of the present
case is the judgment rendered by the foreign court ordering defendant to
pay plaintiffs definite sums of money, as and for compensatory damages.
The Court finds that the value of the foreign judgment can be
estimated; indeed, it can even be easily determined. The Court is not
minded to distinguish between the enforcement of a judgment and the
amount of said judgment, and separate the two, for purposes of
determining the correct filing fees. Similarly, a plaintiff suing on
promissory note for P1 million cannot be allowed to pay only P400 filing fees (sic),
on the reasoning that the subject matter of his suit is not the P1
million, but the enforcement of the promissory note, and that the value
of such "enforcement" cannot be estimated.35
The jurisprudential standard in gauging whether the
subject matter of an action is capable of pecuniary estimation is
well-entrenched. The Marcos Estate cites Singsong v. Isabela Sawmill and Raymundo v. Court of Appeals, which ruled:
[I]n determining whether an action is one the subject
matter of which is not capable of pecuniary estimation this Court has
adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. If it is primarily for the recovery of a sum
of money, the claim is considered capable of 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, the principal relief sought, this Court has considered such actions
as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first
instance (now Regional Trial Courts).
On the other hand, petitioners cite the ponencia of Justice JBL Reyes in Lapitan v. Scandia,36 from which the rule in Singsong and Raymundo actually derives, but which incorporates this additional nuance omitted in the latter cases:
xxx 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, the principal relief sought, like
in suits to have the defendant perform his part of the contract
(specific performance) and in actions for support, or for annulment of
judgment or to foreclose a mortgage, this Court has considered such
actions as cases where the subject of the litigation may not be
estimated in terms of money, and are cognizable exclusively by courts of
first instance.37
Petitioners go on to add that among the actions the
Court has recognized as being incapable of pecuniary estimation include
legality of conveyances and money deposits,38 validity of a mortgage,39 the right to support,40 validity of documents,41 rescission of contracts,42 specific performance,43 and validity or annulment of judgments.44 It is urged that an action for enforcement of a foreign judgment belongs to the same class.
This is an intriguing argument, but ultimately it is
self-evident that while the subject matter of the action is undoubtedly
the enforcement of a foreign judgment, the effect of a providential
award would be the adjudication of a sum of money. Perhaps in theory,
such an action is primarily for "the enforcement of the foreign
judgment," but there is a certain obtuseness to that sort of argument
since there is no denying that the enforcement of the foreign judgment
will necessarily result in the award of a definite sum of money.
But before we insist upon this conclusion past beyond
the point of reckoning, we must examine its possible ramifications.
Petitioners raise the point that a declaration that an action for
enforcement of foreign judgment may be capable of pecuniary estimation
might lead to an instance wherein a first level court such as the
Municipal Trial Court would have jurisdiction to enforce a foreign
judgment. But under the statute defining the jurisdiction of first level
courts, B.P. 129, such courts are not vested with jurisdiction over
actions for the enforcement of foreign judgments.
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases. — Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil
actions and probate proceedings, testate and intestate, including the
grant of provisional remedies in proper cases, where the value of the
personal property, estate, or amount of the demand does not exceed One
hundred thousand pesos (P100,000.00) or, in Metro
Manila where such personal property, estate, or amount of the demand
does not exceed Two hundred thousand pesos (P200,000.00)
exclusive of interest damages of whatever kind, attorney's fees,
litigation expenses, and costs, the amount of which must be specifically
alleged: Provided, That where there are several claims or causes of
action between the same or different parties, embodied in the same
complaint, the amount of the demand shall be the totality of the claims
in all the causes of action, irrespective of whether the causes of
action arose out of the same or different transactions;
(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided,
That when, in such cases, the defendant raises the question of
ownership in his pleadings and the question of possession cannot be
resolved without deciding the issue of ownership, the issue of ownership
shall be resolved only to determine the issue of possession.
(3) Exclusive original jurisdiction in all civil
actions which involve title to, or possession of, real property, or any
interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That value of such property shall be determined by the assessed value of the adjacent lots.45
Section 33 of B.P. 129 refers to instances wherein
the cause of action or subject matter pertains to an assertion of rights
and interests over property or a sum of money. But as earlier pointed
out, the subject matter of an action to enforce a foreign judgment is
the foreign judgment itself, and the cause of action arising from the
adjudication of such judgment.
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, thus negating the fears of the petitioners.
Indeed, an examination of the provision indicates that it can be relied
upon as jurisdictional basis with respect to actions for enforcement of
foreign judgments, provided that no other court or office is vested
jurisdiction over such complaint:
Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original jurisdiction:
xxx
(6) In all cases not within the exclusive
jurisdiction of any court, tribunal, person or body exercising
jurisdiction or any court, tribunal, person or body exercising judicial
or quasi-judicial functions.
Thus, we are comfortable in asserting the obvious,
that 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. What provision then governs the
proper computation of the filing fees over the instant complaint? For
this case and other similarly situated instances, we find that it is
covered by Section 7(b)(3), involving as it does, "other actions not
involving property."
Notably, the amount paid as docket fees by the
petitioners on the premise that it was an action incapable of pecuniary
estimation corresponds to the same amount required for "other actions
not involving property." The petitioners thus paid the correct amount of
filing fees, and it was a grave abuse of discretion for respondent
judge to have applied instead a clearly inapplicable rule and dismissed
the complaint.
There is another consideration of supreme relevance
in this case, one which should disabuse the notion that the doctrine
affirmed in this decision is grounded solely on the letter of the
procedural rule. We earlier adverted to the the internationally
recognized policy of preclusion,46 as well as the principles of comity, utility and convenience of nations47
as the basis for the evolution of the rule calling for the recognition
and enforcement of foreign judgments. The US Supreme Court in Hilton v. Guyot48
relied heavily on the concept of comity, as especially derived from the
landmark treatise of Justice Story in his Commentaries on the Conflict
of Laws of 1834.49 Yet the notion of "comity" has since been criticized as one "of dim contours"50 or suffering from a number of fallacies.51
Other conceptual bases for the recognition of foreign judgments have
evolved such 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.53 The most ambitious of these attempts is the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, prepared in 1966 by the Hague Conference of International Law.54 While it has not received the ratifications needed to have it take effect,55 it is recognized as representing current scholarly thought on the topic.56 Neither the Philippines nor the United States are signatories to the 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.59
Similarly, the notion that fraud or collusion may preclude the
enforcement of a foreign judgment finds affirmation with foreign
jurisprudence and commentators,60 as well as the doctrine that the foreign judgment must not constitute "a clear mistake of law or fact."61
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
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.63
This defense allows for the application of local 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.64
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.65
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 international law sees those customary
rules accepted 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.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.
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,69
but they all prescind from the 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,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 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.72
The vagaries of inflation, as well as the relative low-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.
Finally, petitioners also invoke Section 11, Article
III of the Constitution, which states that "[F]ree access to the courts
and quasi-judicial bodies and adequate legal assistance shall not be
denied to any person by reason of poverty." Since the provision is among
the guarantees ensured by the Bill of Rights, it certainly gives rise
to a demandable right. However, now is not the occasion to elaborate on
the parameters of this constitutional right. Given our preceding
discussion, it is not necessary to utilize this provision in order to
grant the relief sought by the petitioners. It is axiomatic that the
constitutionality of an act will not be resolved by the courts if the
controversy can be settled on other grounds73 or unless the resolution thereof is indispensable for the determination of the case.74
One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment
is not conclusive yet, but presumptive evidence of a right of the
petitioners against the Marcos Estate. Moreover, the Marcos Estate is
not precluded to present evidence, if any, of want of jurisdiction, want
of notice to the party, collusion, fraud, or clear mistake of law or
fact. This ruling, decisive as it is on the question of filing fees and
no other, does not render verdict on the enforceability of the Final Judgment
before the courts under the jurisdiction of the Philippines, or for
that matter any other issue which may legitimately be presented before
the trial court. Such issues are to be litigated before the trial
court, but within the confines of the matters for proof as laid down in
Section 48, Rule 39. On the other hand, the speedy resolution of this
claim by the trial court is encouraged, and contumacious delay of the
decision on the merits will not be brooked by this Court.
WHEREFORE, the petition is GRANTED. The
assailed orders are NULLIFIED and SET ASIDE, and a new order REINSTATING
Civil Case No. 97-1052 is hereby issued. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Footnotes
2 Namely Celsa Hilao, Josefina Hilao Forcadilla, Arturo P. Revilla, Jr., Rodolfo G. Benosa, Danila M. Fuente, Renato Pineda, Domiciano Amparo, Chistopher Sorio, Jose Duran, and Adora Faye De Vera. Rollo, pp. 42-47.
3 Except for Celsa Hilao, who instead alleged that her daughter, Liliosa Hilao, had been tortured then executed by military personnel during martial law. Id. at 42-43.
4 Id. at 42.
5 Id. at 35.
6 The Opinion was authored by Circuit Judge Betty B. Fletcher and concurred in by Circuit Judge Harry Pragerson. Circuit Judge Pamela Ann Rymer filed an opinion concurring and dissenting in part, her dissent centering on the methodology used for computing compensatory damages. Rollo, pp. 84-132.
7 Under Section 58 of the US Federal Rules of Civil Procedure, the judgment for compensatory damages in a class suit is awarded to a randomly selected…. Petitioner Joel Lamangan was among the randomly selected claimants of the Torture subclass awarded damages by the US District Court. See Rollo, p. 71.
8 Now Section 48, Rule 39, 1997 Rules of Civil Procedure.
9 Since increased to
10 Now an Associate Justice of the Court of Appeals.
11 Petitioners correctly note that they are precluded from filing an appeal on certiorari under Section 1, Rule 41 of the Rules of Civil Procedure, which bars an appeal taken from an order dismissing an action without prejudice and dictates the aggrieved party to file an appropriate civil action under Rule 65 instead. See Rollo, p. 9
12 In a Resolution dated 4 December 2000. Rollo, p. 282.
13 Id. at 205.
14 See Section 7(c), Rule 141.
15 See Section 7(d), id.
16 Gochan v. Gochan, 423 Phil. 491, 502 (2001).
17 Philippine Aluminum Wheels v. Fasgi Enterprises, Inc., G.R. No. 137378, 12 October 2000, 342 SCRA 722, 734; citing Jovito R Salonga, Rex Bookstore, Manila, Philippines, 1995 Edition, p. 543.
18 159 U.S. 113 (1895)
19 47 Phil. 189 (1925). While the Philippine Supreme Court in this case refused to enforce the judgment of the Hongkong Court on the ground of mistake of law or fact, it was reversed on appeal to the US Supreme Court.
20 Id. JJ. Malcolm and Avanceña, dissenting.
21 See also Borthwick v. Hon. Castro-Bartolome, G.R. No. L-57338, 23 July 1987, 152 SCRA 129, 235; Philippine International Shipping Corp. v. Court of Appeals, G.R. No. 77085, 26 April 1989, 172 SCRA 810, 819.
22" Ultimately, matters of remedy and procedure such as those relating to the service of summons or court process upon the defendant, the authority of counsel to appear and represent a defendant and the formal requirements in a decision are governed by the lex fori or the internal law of the forum." Asiavest Merchant Bankers (M) Berhad v. Court of Appeals, 414 Phil. 13, 29 (1991).
23 "Fraud, to hinder the enforcement within this jurisdiction of a foreign judgment, must be extrinsic, i.e., fraud based on facts not controverted or resolved in the case where judgment is rendered, or that which would go to the jurisdiction of the court or would deprive the party against whom judgment is rendered a chance to defend the action to which he has a meritorious case or defense. In fine, intrinsic fraud, that is, fraud which goes to the very existence of the cause of action – such as fraud in obtaining the consent to a contract – is deemed already adjudged, and it, therefore, cannot militate against the recognition or enforcement of the foreign judgment." Philippine Aluminum Wheels v. Fasgi Enterprises, Inc., supra note 17.
24 See, e.g., Nagarmull v. Binalbagan-Isabela Sugar Co., 144 Phil. 72, 77 (1970); Ingenholl v. Walter E. Olsen and Company, Inc., supra note 20.
25 Roeher v. Rodriguez, G.R. No. 142820, 20 June 2003, 404 SCRA 495, 503.
26 "An action must be brought in the second state upon the judgment recovered in the first." J. Salonga, Private International Law (3rd ed., 1967), at 500; citing Goodrich, 600, 601; Chesire, 628; II Beale, 1377. But see E. Scoles and P. Hay, Conflict of Laws (2nd ed., 1982), at 969, which recognizes that civil law countries provide a procedure to give executory force to the foreign judgment, as distinguished from the Anglo-American common law (but not statutory) practice of requiring an action on the judgment.
27 See Philsec Investment Corp. v. Court of Appeals, G.R. No. 103493, 19 June 1997, 274 SCRA 102, 110.
28 Northwest Orient Airlines v. Court of Appeals, G.R. No. 112573, 9 February 1995, 241 SCRA 192, 199.
29 See Section 3(a), Rule 1, Rules of Civil Procedure.
30 Every ordinary civil action must be based on a cause of action. Section 1, Rule 2, Rules of Civil Procedure. A cause of action is the act or omission by which a party violates a right of another. Section 2, Rule 2, Rules of Civil Procedure.
31 See Pacific Asia Overseas Shipping Corp. v. NLRC, G.R. No. 76595. 6 May 1988, 161 SCRA 122, 133.
32 Soles & Hay, supra note 27, at 916.
33 Ibid.
34 Salonga, supra note 27, at 514; citing Cheshire, 803.
35 Rollo, p. 30. Emphasis omitted.
36 133 Phil. 526 (1968).
37 Id. at 528.
38 Rollo, at 326, citing Arroz v. Alojado, 19 SCRA 711 (1967).
39 Ibid citing Bunayog v. Tunas, 106 Phil. 715 (1959)
40 Id. citing Baito v. Sarmiento, 109 Phil. 148 (1960).
41 Id. citing De Rivera v. Halili, 9 SCRA 59 (1963).
42 Id. citing Bautista v. Lim, 88 SCRA 479 (1979) and De Leon v. Court of Appeals, 287 SCRA 94 (1998).
43 Id. citing Amorganda v. Court of Appeals, 166 SCRA 203 (1988); Ortigas & Company v. Herrera, 120 SCRA 89 (1983).
44 Id. citing Mercado v. Ubay, 187 SCRA 719 (1990) and Filipino Pipe Workers Union v. Batario, Jr., 163 SCRA 789 (1988).
45 As amended by Rep. Act No. 7691.
46 Supra note 32.
47 Supra note 17.
48 Supra note 18.
49 H. Steiner & D. Vagts, Transnational Legal Problems: Materials and Text (2nd ed., 1976), at 775.
50 Ibid.
51 See Salonga, supra note 27, at 66.
52 Id. at 502-503.
53 Scoles & Hays, supra note 27, at 970.
54 Steiner & Vagts, supra note 51, at 808. "A decision rendered in one of the Contracting States 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.
55 To date, only Cyprus, the Netherlands, Portugal and Kuwait have either ratified or acceded to the Convention.
56 Steiner & Vagts, supra note 51.
57 Steiner & Vagts, supra note 51,at 776.
58 Salonga, supra note 51, at 502.
59 Steiner & Vagts, supra note 27, at 779. "A policy common to all legal systems is to provide for 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.
61 Ibid; citing Henderson v. Henderson, 6 Q.B. (1844) 288; Vanquelin v. Bouard, 15 C.B. (N.S. 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.
63 "Thus, when the foreign law, judgment or contract is contrary to a sound and established public 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.
66 "[It] is generally recognized that, subject to [exceptions], a rule of general customary 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.
67 "Not only must the acts concerned amount to a settled practice, but they must also be such, or 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.
68 "The problems that arise in the enforcement of foreign judgments are generally to be solved by 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.
69 Divergent practices do not necessarily preclude recognition of a customary norm. In reviewing 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.
71 Sec. 2, Art. II, 1987 Const., which states "The Philippines renounces war as an instrument of 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.
72 Indeed, the valuation of foreign money judgments remains a matter of debate in international 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.
73 Ty v. Trampe, 321 Phil. 81 (1995).
74 Tarrosa v. Singson, G.R. No. 111243, 25 May 1994, 232 SCRA 553, 557.
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