Facts. Defendant Shute purchased
passage for a seven day cruise on the Tropicale, a ship owned by Plaintiff,
through a Washington travel agent. The face of each ticket contained terms and
conditions of passage, which included an agreement that all matters disputed or litigated subject to the travel agreement,
would be before a Florida court. Defendant boarded the ship in California,
which then sailed to Puerto Vallarta, Mexico before returning to Los Angeles.
While the ship was in international waters, Defendant Eulala Shute was injured
from slipping on a deck mat. Defendants filed suit in Federal District Court in
Washington. Petitioners filed a motion for summary judgment, alleging that the
clause in the tickets required Defendants to bring their suit in Florida.
Issue. Whether the court should enforce a forum-selection clause forcing individuals to submit to jurisdiction in a particular state.
Issue. Whether the court should enforce a forum-selection clause forcing individuals to submit to jurisdiction in a particular state.
Held. Yes. The Supreme Court of the United States held that the
Court of Appeals erred in refusing to enforce the forum-selection clause.
Forum-selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, but where they are not lacking in fairness, they will be enforced.
Forum-selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness, but where they are not lacking in fairness, they will be enforced.
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)
Facts. Rudzewicz and MacShara (Defendants), residents of
Michigan, had a contract with Burger King (Plaintiff) as franchisees for 20
years. The contract said that the
franchise relationship would be established in Miami (where Plaintiff’s
principal offices are) and that the
relationship would be governed by Florida law. Defendants fell behind in
monthly payments and Plaintiff brought a diversity action in federal court in
Florida. Defendants argued that the court lacked jurisdiction because Defendants
were residents of Michigan and the claim did not “arise” in Florida. The Court
said the claims did arise under the Florida long-arm statute and found for
Plaintiff. The Court of Appeals reversed on the grounds that exercising
jurisdiction would offend the “fundamental fairness of due process.”
Issue. : Whether the
court of Florida may exercise personal jurisdiction on a franchisee, when the franchisee voluntarily accepts
the regulation by the franchisor’s
headquarters, the franchisee had notice that he may be subject to suit in the
forum state
Held. Yes. A forum
may assert specific jurisdiction over a nonresident defendant where an alleged
injury arises out of or relates to actions by the defendant himself that are
purposeful directed toward forum residents, and where jurisdiction would not
otherwise offend "fair play and substantial justice." Jurisdiction in
these circumstances may not be avoided merely because the defendant did not
physically enter the forum.. The
contract term stating that the franchise relationship would be governed by
Florida law constituted “purposeful availment” of the benefits and protections
of Florida law by the defendants. When a
contract calling for a certain forum is not made under duress or
misrepresentation then jurisdiction over the defendants is proper unless the
defendants would be inconvenienced to such an extent that having to litigate in
the forum state would be unconstitutional.
Because Rudzewicz
established a substantial and continuing relationship with Burger King’s Miami
headquarters, received fair notice from the contract documents and the course
of dealing that he might be subject to suit in Florida, and has failed to
demonstrate how jurisdiction in that forum would otherwise be fundamentally
unfair, we conclude that the District Court’s exercise of jurisdiction pursuant
to Fla. Stat. 48.193(1)(g) (Supp. 1984) did not offend due process
SWEET LINES INC vs TEVES
GR No. 37750, May 19, 1978
SANTOS, J.
FACTS:
Atty. Tandog and Atty. Tiro bought tickets at
the branch office of Sweet Lines Inc, which is engaged in the transportation of
goods and passengers, at Cagayan de Oro. Upon knowing that the vessel will not
proceed to Bohol, but rather on Surigao, respondents sought proper relocation
to another vessel. However, since the vessel was already filled to capacity,
they were forced to agree to hide in the cargo section to avoid inspection. But
respondents alleged that they were exposed to the scorching trip during the
trip and were not later on honored and was constrained to pay for other
tickets. Respondents filed a case for damages in the Court of First Instance of
Misamis Oriental. Petitioner moved to dismiss the complaint on the ground of improper
venue since Condition 14 of the ticket stated that any action arising out of
the conditions and provisions of the ticket shall be filed in the courts of
Cebu. The lower court denied the motion. Hence this petition.
Petitioner contend that the condition fixing
the venue of actions in the City of Cebu is proper since venue may be validly
waived. In contrast respondent contend that while venue of actions may be
transferred from one province to another, such arrangement requires the
“written agreement of the parties”, not to be imposed unilaterally.
ISSUE:
Whether or not the condition on venue is
proper.
HELD:
No, the condition on venue is not proper. Condition No.
14 is subversive of public policy on transfers of venue of actions.
For, although venue may be changed or transferred from one province to another
by agreement of the parties in writing pursuant to Rule 4, Section 3, of the
Rules of Court, such an agreement will not be held valid where it practically
negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on
transfer of venue of actions is the convenience of the plaintiffs as well as
his witnesses and to promote the ends of justice.
Public policy is “. . . that principle of the
law which holds that no subject or citizen can lawfully do that which has a
tendency to be injurious to the public or against the public good. . .”. Under
this principle “. . . freedom of contract or private dealing is restricted by
law for the good of the public.” Clearly, Condition No. 14, if enforced, will
be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger claimants outside of Cebu City, thus
placing petitioner company at a decided advantage over said persons, who may
have perfectly legitimate claims against it.
HSBC v Jack Robert Sherman GR 72494
Facts: Eastern Book Supply, a company incorporated in Singapore, was
granted by HSBC’s Singapore branch
an overdraft facility payable monthly with 3% interest. As a security, both
private respondents and a certain Lowe, executed a Joint and Several guarantee
in favor of HSBC where it stipulates that
all liabilities arising from it may be enforced in accordance with the laws of
Singapore and that the Courts of Singapore will have jurisdiction over it.
When Easter failed to pay its obligation, HSBC filed a complaint for
collection of a sum of money against respondents in RTC of Quezon City. Private
respondent filed a petition for prohibition with preliminary injunction in the
IAC in which The IAC rendered a decision enjoining the RTC Quezon City from
taking further cognizance of the case and to dismiss the same for filing with
the proper court of Singapore which is the proper forum.
Issue: Does Philippines have jurisdiction
over the Case?
Ruling: YES.
While it is true that "the transaction took place in Singaporean
setting" and that the Joint and Several Guarantee contains a
choice-of-forum clause, the very essence of due process dictates that the
stipulation be liberally construed. One basic principle underlies all rules of
jurisdiction in International Law: a State does not have jurisdiction in the
absence of some reasonable basis for exercising it, whether the proceedings are
in rem quasi in rem or in personam.
In the ordinary habits of life, anyone would be disinclined to litigate
before a foreign tribunal, with more reason as a defendant. The defense of Sherman & Reloj that the
complaint should have been filed in Singapore is based merely on technicality.
They did not even claim, much less prove, that the filing of the action here
will cause them any unnecessary trouble, damage, or expense. On the other hand,
there is no showing that petitioner BANK filed the action here just to harass
Sherman & Reloj.
The parties did not thereby stipulate that only the courts of Singapore,
to the exclusion of all the rest, has jurisdiction. Neither did the
clause in question operate to divest Philippine courts of jurisdiction. In
International Law, jurisdiction is often defined as the light of a State to
exercise authority over persons and things w/in its boundaries subject to
certain exceptions. A State is competent to take hold of any judicial matter it
sees fit by making its courts and agencies assume jurisdiction over all kinds
of cases brought before them.
However, whether a suit should be entertained or dismissed on the basis
of the principle of forum non conveniens depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court.
Thus, the IAC should not have relied on such principle (In a conflict problem,
a court will simply refuse to entertain the case if it is not authorized by law
to exercise jurisdiction. And even if it is so authorized, it may still refuse
to entertain the case by applying the principle of forum non conveniens.)
Paula Llorente vs CA
FACTS:
Lorenzo Llorente and petitioner Paula Llorente were married in 1937 in the Philippines. Lorenzo was an enlisted serviceman of the US Navy. Soon after, he left for the US where through naturalization, he became a US Citizen. Upon his visitation of his wife, he discovered that she was living with his brother and a child was born. The child was registered as legitimate but the name of the father was left blank. Llorente filed a divorce in California, which later on became final. He married Alicia and they lived together for 25 years bringing 3 children. He made his last will and testament stating that all his properties will be given to his second marriage. He filed a petition of probate that made or appointed Alicia his special administrator of his estate. Before the
proceeding could be terminated, Lorenzo died. Paula filed a letter of administration over Llorente’s estate. The trial granted the letter and denied the motion for reconsideration. An appeal was made to the Court of Appeals, which affirmed and modified the judgment of the Trial Court that she be declared co-owner of whatever properties, she and the deceased, may have acquired during their 25 years of cohabitation.
ISSUE:
Whether or not the National Law shall apply.
RULING:
Foreign law applies. The Civil Code provides that intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. In this case, Lorenzo was an American citizen long before and at the time of: (1) divorce from first wife; (2) marriage to Alicia; (3) execution of his will; and (4) death.
Lorenzo Llorente and petitioner Paula Llorente were married in 1937 in the Philippines. Lorenzo was an enlisted serviceman of the US Navy. Soon after, he left for the US where through naturalization, he became a US Citizen. Upon his visitation of his wife, he discovered that she was living with his brother and a child was born. The child was registered as legitimate but the name of the father was left blank. Llorente filed a divorce in California, which later on became final. He married Alicia and they lived together for 25 years bringing 3 children. He made his last will and testament stating that all his properties will be given to his second marriage. He filed a petition of probate that made or appointed Alicia his special administrator of his estate. Before the
proceeding could be terminated, Lorenzo died. Paula filed a letter of administration over Llorente’s estate. The trial granted the letter and denied the motion for reconsideration. An appeal was made to the Court of Appeals, which affirmed and modified the judgment of the Trial Court that she be declared co-owner of whatever properties, she and the deceased, may have acquired during their 25 years of cohabitation.
ISSUE:
Whether or not the National Law shall apply.
RULING:
Foreign law applies. The Civil Code provides that intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. In this case, Lorenzo was an American citizen long before and at the time of: (1) divorce from first wife; (2) marriage to Alicia; (3) execution of his will; and (4) death.
Owing
to the nationality principle embodied in Art. 15 of the Civil Code, only
Philippine nationals are covered by policy against absolute divorces, the same
being considered contrary to our concept of public policy and morality. Aliens
may obtain divorces abroad, provided they are valid according to their national
law.
Imelda
Marcos vs Comelec
Facts:
Petitioner Imelda Romualdez-Marcos
filed her Certificate of Candidacy for the position of Representative of the
First District of Leyte with the Provincial Election Supervisor on March 8,
1995. Private respondent Cirilo Roy Montejo,
the incumbent Representative of the First District of Leyte and a candidate for
the same position, filed a "Petition for Cancellation and
Disqualification" with the Commission on Elections alleging that
petitioner did not meet the constitutional requirement for residency.
Comelec declared Imelda not qualified to run and struck off the amended COC as
well as the original COCs.
During
the pendency of the disqualification case, Imelda won in the election. But the
Comelec suspended her proclamation. Petitioner contended that it is the House
of Representatives Electoral Tribunal (HRET) and not the Comelec which has
jurisdiction over the election of members of the House of Representatives.
Issue:
WON HRET has jurisdiction over petitioner’s
qualification?
Held:
No. HRET's jurisdiction as the
sole judge of all contests relating to the elections, returns and
qualifications of members of Congress begins only after a candidate has become
a member of the House of Representatives. Petitioner not being a member of the
House of Representatives, it is obvious that the HRET at this point has no
jurisdiction over the question.
PHILSEC INVESTMENT et al vs.CA et al
G.R.
No. 103493 June 19, 1997
Facts: Private respondent Ventura O. Ducat obtained separate
loans from petitioners Ayala and
Philsec in the sum of US$2,500,000.00, secured by
shares of stock owned by Ducat with a market value of P14,088,995.00. In order
to facilitate the payment of the loans, private respondent 1488, Inc., through
its president, private respondent Drago Daic, assumed Ducat’s obligation under
an Agreement, dated January 27, 1983, whereby 1488, Inc. executed a Warranty
Deed with Vendor’s Lien by which it sold to petitioner Athona Holdings, N.V.
(hereafter called ATHONA) a parcel of land in Harris County, Texas, U.S.A., for
US$2,807,209.02, while PHILSEC and AYALA extended a loan to ATHONA in the
amount of US$2,500,000.00 as initial payment of the purchase price. The balance
of US$307,209.02 was to be paid by means of a promissory note executed by
ATHONA in favor of 1488, Inc. Subsequently, upon their receipt of the
US$2,500,000.00 from 1488, Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of stock in their
possession belonging to Ducat.
• As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the note became due and demandable.
• Private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment of the balance of US$307,209.02 and for damages for breach of contract and for fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District Court of Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue of the action was later transferred to the United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original complaint.
• While Civil Case No. H-86-440 was pending in the United States, petitioners filed a complaint “For Sum of Money with Damages and Writ of Preliminary Attachment” against private respondents in the Regional Trial Court of Makati, where it was docketed as Civil Case No. 16563. The complaint reiterated the allegation of petitioners in their respective counterclaims in Civil Action No. H-86-440 of the United States District Court of Southern Texas that private respondents committed fraud by selling the property at a price 400 percent more than its true value of US$800,000.00. Petitioners claimed that, as a result of private respondents’ fraudulent misrepresentations, ATHONA, PHILSEC, and AYALA were induced to enter into the Agreement and to purchase the Houston property. Petitioners prayed that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000.00 and to pay damages. On April 20, 1987, the trial court issued a writ of preliminary attachment against the real and personal properties of private respondents.
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis pendentia, vis-a-vis Civil Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of action. Ducat contended that the alleged overpricing of the property prejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and whose only participation was to extend financial accommodation to ATHONA under a separate loan agreement.
The trial court granted Ducat’s motion to dismiss, stating that “the evidentiary requirements of the controversy may be more suitably tried before the forum of the litis pendentia in the U.S., under the principle in private international law of forum non conveniens,” even as it noted that Ducat was not a party in the U.S. case.
• A separate hearing was held with regard to 1488, Inc. and Daic’s motion to dismiss. On March 9, 1988, the trial court 3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground plaintiff ATHONA is the subject matter of the pending case in the United States District Court which, under the doctrine of forum non conveniens, is the better (if not exclusive) forum to litigate matters needed to determine the assessment and/or fluctuations of the fair market value of real estate situated in Houston, Texas, U.S.A.
The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum of money for alleged tortious acts, so that service of summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and Drago Daic. The dismissal of Civil Case No. 16563 on the ground of forum non conveniens was likewise affirmed by the Court of Appeals on the ground that the case can be better tried and decided by the U.S. court:
The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 2) the seller, 1488 Inc. is a non-resident foreign corporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing business in the Philippines, is wholly owned by Philsec, a domestic corporation, Athona Holdings is also owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.
• It is important to note in connection with the first point that while the present case was pending in the Court of Appeals, the United States District Court for the Southern District of Texas rendered judgment 5 in the case before it. The judgment, which was in favor of private respondents, was affirmed on appeal by the Circuit Court of Appeals.
• As ATHONA failed to pay the interest on the balance of US$307,209.02, the entire amount covered by the note became due and demandable.
• Private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in the United States for payment of the balance of US$307,209.02 and for damages for breach of contract and for fraud allegedly perpetrated by petitioners in misrepresenting the marketability of the shares of stock delivered to 1488, Inc. under the Agreement. Originally instituted in the United States District Court of Texas, 165th Judicial District, where it was docketed as Case No. 85-57746, the venue of the action was later transferred to the United States District Court for the Southern District of Texas, where 1488, Inc. filed an amended complaint, reiterating its allegations in the original complaint.
• While Civil Case No. H-86-440 was pending in the United States, petitioners filed a complaint “For Sum of Money with Damages and Writ of Preliminary Attachment” against private respondents in the Regional Trial Court of Makati, where it was docketed as Civil Case No. 16563. The complaint reiterated the allegation of petitioners in their respective counterclaims in Civil Action No. H-86-440 of the United States District Court of Southern Texas that private respondents committed fraud by selling the property at a price 400 percent more than its true value of US$800,000.00. Petitioners claimed that, as a result of private respondents’ fraudulent misrepresentations, ATHONA, PHILSEC, and AYALA were induced to enter into the Agreement and to purchase the Houston property. Petitioners prayed that private respondents be ordered to return to ATHONA the excess payment of US$1,700,000.00 and to pay damages. On April 20, 1987, the trial court issued a writ of preliminary attachment against the real and personal properties of private respondents.
Private respondent Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis pendentia, vis-a-vis Civil Action No. H-86-440 filed by 1488, Inc. and Daic in the U.S., (2) forum non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state a cause of action. Ducat contended that the alleged overpricing of the property prejudiced only petitioner ATHONA, as buyer, but not PHILSEC and BPI-IFL which were not parties to the sale and whose only participation was to extend financial accommodation to ATHONA under a separate loan agreement.
The trial court granted Ducat’s motion to dismiss, stating that “the evidentiary requirements of the controversy may be more suitably tried before the forum of the litis pendentia in the U.S., under the principle in private international law of forum non conveniens,” even as it noted that Ducat was not a party in the U.S. case.
• A separate hearing was held with regard to 1488, Inc. and Daic’s motion to dismiss. On March 9, 1988, the trial court 3 granted the motion to dismiss filed by 1488, Inc. and Daic on the ground plaintiff ATHONA is the subject matter of the pending case in the United States District Court which, under the doctrine of forum non conveniens, is the better (if not exclusive) forum to litigate matters needed to determine the assessment and/or fluctuations of the fair market value of real estate situated in Houston, Texas, U.S.A.
The Court of Appeals also held that Civil Case No. 16563 was an action in personam for the recovery of a sum of money for alleged tortious acts, so that service of summons by publication did not vest the trial court with jurisdiction over 1488, Inc. and Drago Daic. The dismissal of Civil Case No. 16563 on the ground of forum non conveniens was likewise affirmed by the Court of Appeals on the ground that the case can be better tried and decided by the U.S. court:
The U.S. case and the case at bar arose from only one main transaction, and involve foreign elements, to wit: 2) the seller, 1488 Inc. is a non-resident foreign corporation; 3) although the buyer, Athona Holdings, a foreign corporation which does not claim to be doing business in the Philippines, is wholly owned by Philsec, a domestic corporation, Athona Holdings is also owned by BPI-IFL, also a foreign corporation; 4) the Warranty Deed was executed in Texas, U.S.A.
• It is important to note in connection with the first point that while the present case was pending in the Court of Appeals, the United States District Court for the Southern District of Texas rendered judgment 5 in the case before it. The judgment, which was in favor of private respondents, was affirmed on appeal by the Circuit Court of Appeals.
ISSUE: Whether Civil Case No. 16536 is barred by the judgment
of the U.S. court.
HELD: Decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is REMANDED to the Regional Trial Court of Makati for consolidation with Civil Case No. 92-1070 and for further proceedings in accordance with this decision
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. 9 Rule 39, §50 provides:
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:
(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.
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.
In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private respondents in connection with the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura Ducat) is a Filipino, and that it was the extinguishment of the latter’s debt which was the object of the transaction under litigation. The trial court arbitrarily dismissed the case even after finding that Ducat was not a party in the U.S. case.
• It was error we think for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. and Daic could not be obtained because this is an action in personam and summons were served by extraterritorial service. Rule 14, §17 on extraterritorial service provides that service of summons on a non-resident defendant may be effected out of the Philippines by leave of Court where, among others, “the property of the defendant has been attached within the Philippines.” 18 It is not disputed that the properties, real and personal, of the private respondents had been attached prior to service of summons under the Order of the trial court dated April 20, 1987.
HELD: Decision of the Court of Appeals is REVERSED and Civil Case No. 16563 is REMANDED to the Regional Trial Court of Makati for consolidation with Civil Case No. 92-1070 and for further proceedings in accordance with this decision
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. 9 Rule 39, §50 provides:
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:
(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.
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.
In this case, the trial court abstained from taking jurisdiction solely on the basis of the pleadings filed by private respondents in connection with the motion to dismiss. It failed to consider that one of the plaintiffs (PHILSEC) is a domestic corporation and one of the defendants (Ventura Ducat) is a Filipino, and that it was the extinguishment of the latter’s debt which was the object of the transaction under litigation. The trial court arbitrarily dismissed the case even after finding that Ducat was not a party in the U.S. case.
• It was error we think for the Court of Appeals and the trial court to hold that jurisdiction over 1488, Inc. and Daic could not be obtained because this is an action in personam and summons were served by extraterritorial service. Rule 14, §17 on extraterritorial service provides that service of summons on a non-resident defendant may be effected out of the Philippines by leave of Court where, among others, “the property of the defendant has been attached within the Philippines.” 18 It is not disputed that the properties, real and personal, of the private respondents had been attached prior to service of summons under the Order of the trial court dated April 20, 1987.
Keeton v. Hustler Magazine,
Inc., 465 U.S. 770 (1984)
Facts.
Kathy Keeton (Plaintiff), a resident of New York, sued Hustler Magazine,
Inc. (Hustler) and others (Defendants) for libel in the United States District
Court for the District of New Hampshire under its diversity jurisdiction.
Plaintiff claims that Defendants committed libel against her in five issues of
its magazine published between 1975 and 1976. Plaintiff has no contacts with
the state of New Hampshire other than through a magazine she helps produce. Hustler
is a corporation organized under the laws of Ohio, and its principal place of
business is in California. Hustler sells between 10,000 and 15,000 copies of
its magazine in New Hampshire per month. The district court dismissed the
complaint for lack of personal jurisdiction. The court of appeals affirmed on
the ground that Plaintiff lacked sufficient contacts with New Hampshire to
justify the state’s personal jurisdiction over Defendants. Further, the court
of appeals placed significant weight on the fact that New Hampshire’s six-year
statute of limitations for libel made it the only state in which Plaintiff’s
suit could still be brought and that the “single publication rule” meant that,
if successful, Plaintiff would be able to recover for damages suffered in all
fifty states. For these reasons, the court of appeals considered personal
jurisdiction over Defendants unfair. Plaintiff petitioned the United States
Supreme Court for certiorari, which was granted.
Issue.
Whether personal jurisdiction is proper in a libel action against a
magazine in a state where its only contacts are magazine sales.
Held.
Yes. The court of appeals’ ruling is reversed and the case is remanded.
Due process forbids the assertion of personal
jurisdiction over a nonresident corporation unless the corporation has
sufficient minimum contacts with the state. Hustler’s “regular circulation” of
its magazines within the state of New Hampshire constitutes sufficient contacts
to justify the assertion of personal jurisdiction over it for a libel claim
related to statements made in the magazine. Defendants purposefully sought to
do business in the state of New Hampshire and regularly sells thousands of
magazines per month there. Further, New Hampshire has an interest in
adjudicating harm that occurs inside its borders. This includes a case
involving libel committed in the state, even if committed against a
nonresident. The court of appeals’ concern with New Hampshire’s unusually long
statute of limitations and the possibility of an unfair damage award was
misplaced. Choice of law matters have no bearing on a forum’s right to assert
personal jurisdiction over a party. In addition, a plaintiff’s contacts with a
forum state have no relevance to whether personal jurisdiction exists over the defendant.
It is Defendants’ contacts that are at issue, and while they might not be
sufficient to justify general personal jurisdiction over unrelated claims,
Defendants’ continued business justifies specific personal jurisdiction over
claims related to that business. Moreover, the fact that a plaintiff resides
outside the state will not destroy personal jurisdiction over the defendant.
Even though Plaintiff’s damages would likely be greater in her home state,
there is no prohibition on bringing libel actions elsewhere. Defendants
purposefully availed themselves of the privileges of doing business in New
Hampshire, and should reasonably anticipated being haled into court for claims
related to the magazine it sells there. National publications may properly be sued
for their content anywhere “a substantial number of copies are regularly sold
and distributed.”
RUSH v. SAVCHUK(1980)
Facts: On January 13,
1972, Jeffrey Savchuk the plaintiff was
riding in a car operated by Randal Rush the defendant insured which was
involved in a single-car crash, as a result Savchuk suffered injuries. Savchuk
a Minnesota resident, brought an action for negligence in a Minnesota state
court against defendant, an Indiana resident. Since defendant had no contacts
with Minnesota that would support in personam jurisdiction, plaintiff sought to
obtain quasi in rem jurisdiction by garnishing the contractual obligation of
defendant’s insurer State Farm which is
licensed to do business in Minnesota.
Issue: Whether a state have jurisdiction over a defendant
with no connections in the state by attaching the contractual obligation of an
insurer licensed in the state?
Held: No. A State may exercise jurisdiction over an
absent defendant only if the defendant has certain minimum contacts with the
forum such that the maintenance of the suit does not offend traditional notions
of fair play and substantial justice. Here, the only affiliating circumstance
offered to show a relationship among Rush, Minnesota, and this lawsuit is that
Rush's insurance company does business in the State. However, the fictional
presence in Minnesota of State Farm's policy obligation to defend and indemnify
Rush - derived from combining the legal fiction that assigns a situs to a debt,
for garnishment purposes, wherever the debtor is found with the legal fiction
that a corporation is "present," for jurisdictional purposes,
wherever it does business - cannot be deemed to give the State the power to
determine Rush's liability for the out-of-state accident. The mere presence of
property in a State does not establish a sufficient relationship between the
owner of the property and the State to support the exercise of jurisdiction
over an unrelated cause of action, and it cannot be said that the defendant
engaged in any purposeful activity related to the forum that would make the
exercise of jurisdiction fair, just, or reasonable merely because his insurer
does business there. Nor does the policy provide significant contacts between
the litigation and the forum, for the policy obligations pertain only to the
conduct, not the substance, of the litigation.
Worldwide Volswagen vs Woodson
Facts :
New
York residents purchased a car from a Volkswagen retailer in New York. On a
drive to Arizona, the residents got in a car accident while driving through
Oklahoma. A defective gas tank in the car allegedly caused the accident. The
residents sued the retailer and its New York based wholesale distributor in
Oklahoma state court. The retailer and distributor asserted that Oklahoma could
not properly have jurisdiction. The trial court rejected this claim. The
retailer and distributor then sought a writ of prohibition from the Supreme
Court of Oklahoma to prevent the trial court from exercising in personam
jurisdiction. The court denied the writ because jurisdiction was authorized by
Oklahoma’s long-arm statute, which allowed jurisdiction over defendants who caused
tortuous injury within the state.
Issue:
May
a state court exercise in personam jurisdiction over a non-resident defendant
in a products liability action where the defendant’s only connection to the
state is the accident in question?
Held: Consistently with the Due Process Clause, the
Oklahoma trial court may not exercise in personamjurisdiction over
petitioners. Pp. 444 U. S. 291-299.
(a) A state court may exercise personal
jurisdiction over a nonresident defendant only so long as there exist
"minimum contacts" between the defendant and the forum State. International
Shoe Co. v. Washington, 326 U. S. 310. The defendant's contacts with the forum
State must be such that maintenance of the suit does not offend traditional
notions of fair play and substantial justice, id. at 326 U. S. 316, and the relationship between the defendant
and the forum must be such that it is "reasonable . . . to require the
corporation to defend the particular suit which is brought there," id. at 326 U. S. 317. The Due Process Clause
"does not contemplate that a state may
make binding a judgment in personam against an individual or
corporate defendant with which the state has no contacts, ties, or
relations."
Id. at 326 U. S. 319. Pp. 444 U. S. 291-294.
(b) Here, there is a total absence in the
record of those affiliating circumstances that are a necessary predicate to any
exercise of state court jurisdiction. Petitioners carry on no activity
whatsoever in Oklahoma; they close no sales and perform no services there,
avail
themselves of none of the benefits of
Oklahoma law, and solicit no business there either through salespersons or
through advertising reasonably calculated to reach that State. Nor does the
record show that they regularly sell cars to Oklahoma residents, or that they
indirectly, through others, serve or seek to serve the Oklahoma market.
Although it is foreseeable that automobiles sold by petitioners would travel to
Oklahoma and that the automobile here might cause injury in Oklahoma,
"foreseeability" alone is not a sufficient benchmark for personal
jurisdiction under the Due Process Clause. The foreseeability that is critical
to due process analysis is not the mere likelihood that a product will find its
way into the forum State, but rather is that the defendant's conduct and
connection with the forum are such that he should reasonably anticipate being
haled into court there. Nor can jurisdiction be supported on the theory that petitioners
earn substantial revenue from goods used in Oklahoma.
COMPUSERV INC., vs PATTERSON
No. 95-3452, July 22, 1996
FACTS:
CompuServe, Inc., established in Ohio,
provides an opportunity for subscribers to post and sell software in the form
of "shareware." CompuServe accepted payment for the shareware from
purchasers and remitted that payment, less a commission, to the authors of the
software. Richard S. Patterson, a resident of Texas, subscribed to CompuServe
for marketing his navigation software. Before use of the shareware service,
Patterson entered into a "Shareware Registration Agreement"
("SRA") that provided that Ohio law governed the parties'
relationship. Subsequent to the posting of Patterson's navigation software,
CompuServe itself began to market its own navigation software. Patterson
believed that CompuServe's software was confusingly similar to his own
trademarked software and notified CompuServe.
CompuServe filed a declaratory judgment
action in the District Court for the Southern District of Ohio, seeking a
declaration that it had not infringed Patterson's trademarks. Patterson filed a
motion to dismiss for lack of personal jurisdiction. The district court granted
Patterson's motion.
CompuServe filed an appeal arguing that
Patterson's repeated availment of the shareware sales procedures constituted
minimum contacts with the forum state. CompuServe further argued that the
existence of the Shareware Registration Agreement clearly stipulating that Ohio
law governed disputes regarding the agreement meant that the exercise of
personal jurisdiction comported with traditional notions of fair play and
substantial justice.
ISSUE:
Whether or not an Internet service provider's
home state can exercise jurisdiction over an out-of-state author of software
who had subscribed and received commissions by using the Internet service
provider.
HELD:
Yes. A forum state can
exercise jurisdiction over an author of software who sells his software via a
Internet service provider based in the forum state because 1) the author
purposefully avails himself of the forum's laws by acting in the forum, 2) the
cause of action arises from that availment, and 3) the burden on the defendant
author is less than that on the forum state's interests in determining its laws
concerning trademarks and trade names.
SANTOS VS NORTHWEST
ACTS: The petitioner is a minor
and a resident of the Philippines. Private respondent Northwest Orient Airlines
(NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and
licensed to do business and maintain a branch office in the Philippines.
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No date was specified for his return to San Francisco.
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No date was specified for his return to San Francisco.
On December 19, 1986, the petitioner checked
in at the NOA counter in the San Francisco airport for his scheduled departure
to Manila. Despite a previous confirmation and re-confirmation, he was informed
that he had no reservation for his flight from Tokyo to Manila. He therefore
had to be wait-listed.
On March 12, 1987, the petitioner sued NOA
for damages in the RTC of Makati. On April 13, 1987, NOA moved to dismiss the
complaint on the ground of lack of jurisdiction, citing Article 28(1) of the
Warsaw Convention, reading as follows:
Art. 28. (1) An action for damage must be
brought at the option of the plaintiff, in the territory of one of the High
Contracting Parties, either before the court of the domicile of the carrier or
of his principal place of business, or where he has a place of business through
which the contract has been made, or before the court at the place of
destination.
The private respondent contended that the
Philippines was not its domicile nor was this its principal place of business.
Neither was the petitioner’s ticket issued in this country nor was his
destination Manila but San Francisco in the United States.
Lower court granted the dismissal, CA affirmed.
Lower court granted the dismissal, CA affirmed.
ISSUE: WON the Philippines has
jurisdiction over the case. (Issue raised by the party is WON the provision of
the Warsaw convention was constitutional)
HELD: No jurisdiction (the
provision is constitutional)
The Convention is a treaty commitment
voluntarily assumed by the Philippine government and, as such, has the force
and effect of law in this country. The petitioner’s allegations are not
convincing enough to overcome this presumption. Apparently, the Convention
considered the four places designated in Article 28 the most convenient forums
for the litigation of any claim that may arise between the airline and its
passenger, as distinguished from all other places.
NOTES:
WON Warsaw convention applies.
Convention applies to all international transportation of persons performed by aircraft for hire. Whether the transportation is “international” is determined by the contract of the parties, which in the case of passengers is the ticket. When the contract of carriage provides for the transportation of the passenger between certain designated terminals “within the territories of two High Contracting Parties,” the provisions of the Convention automatically apply and exclusively govern the rights and liabilities of the airline and its passenger.
Convention applies to all international transportation of persons performed by aircraft for hire. Whether the transportation is “international” is determined by the contract of the parties, which in the case of passengers is the ticket. When the contract of carriage provides for the transportation of the passenger between certain designated terminals “within the territories of two High Contracting Parties,” the provisions of the Convention automatically apply and exclusively govern the rights and liabilities of the airline and its passenger.
WON MNL or SFO was the destination.
The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from Manila. Manila should therefore be considered merely an agreed stopping place and not the destination.
The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from Manila. Manila should therefore be considered merely an agreed stopping place and not the destination.
WON Northwest has domicile in the Philippines
Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term “domicile.”
Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term “domicile.”
COMMUNICATION MATERIALS VS. CA
FACTS: Petitioners COMMUNICATION
MATERIALS AND DESIGN, INC., (CMDI) and ASPAC MULTI-TRADE INC., (ASPAC) are both
domestic corporations.. Private Respondents ITEC, INC. and/or ITEC,
INTERNATIONAL, INC. (ITEC) are corporations duly organized and existing under
the laws of the State of Alabama, USA. There is no dispute that ITEC is a
foreign corporation not licensed to do business in the Philippines.
ITEC entered into a contract with ASPAC
referred to as “Representative Agreement”. Pursuant to the contract, ITEC
engaged ASPAC as its “exclusive representative” in the Philippines for the sale
of ITEC’s products, in consideration of which, ASPAC was paid a stipulated
commission. Through a “License Agreement” entered into by the same parties
later on, ASPAC was able to incorporate and use the name “ITEC” in its own
name. Thus , ASPAC Multi-Trade, Inc. became legally and publicly known as
ASPAC-ITEC (Philippines).
One year into the second term of the parties’ Representative Agreement, ITEC decided to terminate the same, because petitioner ASPAC allegedly violated its contractual commitment as stipulated in their agreements. ITEC charges the petitioners and another Philippine Corporation, DIGITAL BASE COMMUNICATIONS, INC. (DIGITAL), the President of which is likewise petitioner Aguirre, of using knowledge and information of ITEC’s products specifications to develop their own line of equipment and product support, which are similar, if not identical to ITEC’s own, and offering them to ITEC’s former customer.
One year into the second term of the parties’ Representative Agreement, ITEC decided to terminate the same, because petitioner ASPAC allegedly violated its contractual commitment as stipulated in their agreements. ITEC charges the petitioners and another Philippine Corporation, DIGITAL BASE COMMUNICATIONS, INC. (DIGITAL), the President of which is likewise petitioner Aguirre, of using knowledge and information of ITEC’s products specifications to develop their own line of equipment and product support, which are similar, if not identical to ITEC’s own, and offering them to ITEC’s former customer.
The complaint was filed with the RTC-Makati
by ITEC, INC. Defendants filed a MTD the complaint on the following grounds:
(1) That plaintiff has no legal capacity to sue as it is a foreign corporation
doing business in the Philippines without the required BOI authority and SEC
license, and (2) that plaintiff is simply engaged in forum shopping which
justifies the application against it of the principle of “forum non
conveniens”. The MTD was denied.
Petitioners elevated the case to the
respondent CA on a Petition for Certiorari and Prohibition under Rule 65 of the
Revised ROC. It was dismissed as well. MR denied, hence this Petition for Review
on Certiorari under Rule 45.
ISSUE:
2. Can the Philippine court give due course to the suit or dismiss it, on the principle of forum non convenience?
2. Can the Philippine court give due course to the suit or dismiss it, on the principle of forum non convenience?
YES; Petitioner’s insistence on the dismissal
of this action due to the application, or non application, of the private
international law rule of forum non conveniens defies well-settled rules of
fair play. According to petitioner, the Philippine Court has no venue to apply
its discretion whether to give cognizance or not to the present action, because
it has not acquired jurisdiction over the person of the plaintiff in the case,
the latter allegedly having no personality to sue before Philippine Courts.
This argument is misplaced because the court has already acquired jurisdiction
over the plaintiff in the suit, by virtue of his filing the original complaint.
And as we have already observed, petitioner is not at liberty to question
plaintiff’s standing to sue, having already acceded to the same by virtue of
its entry into the Representative Agreement referred to earlier.
Thus, having acquired jurisdiction, it is now
for the Philippine Court, based on the facts of the case, whether to give due
course to the suit or dismiss it, on the principle of forum non convenience.
Hence, the Philippine Court may refuse to assume jurisdiction in spite of its
having acquired jurisdiction. Conversely, the court may assume jurisdiction
over the case if it chooses to do so; provided, that the following requisites
are met:
1) That the Philippine Court is one to which the
parties may conveniently resort to;
2) That the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and,
3) That the Philippine Court has or is likely to have power to enforce its decision.
The aforesaid requirements having been met, and in view of the court’s disposition to give due course to the questioned action, the matter of the present forum not being the “most convenient” as a ground for the suit’s dismissal, deserves scant consideration.
2) That the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and,
3) That the Philippine Court has or is likely to have power to enforce its decision.
The aforesaid requirements having been met, and in view of the court’s disposition to give due course to the questioned action, the matter of the present forum not being the “most convenient” as a ground for the suit’s dismissal, deserves scant consideration.
First
Philippine International Bank v. CA
Facts:
The
bank had an agreement with Demetria to purchase the parcels of land. The said
agreement was made by Demetria with the bank’s manager, Rivera. Later, however,
the bank through its conservator, Encarnacion, sought the repudiation of the
agreement as it alleged that Rivera was not authorized to enter into such
agreement. Hence, there was no valid contract of sale. Subsequently, Demtria
sued the bank. The RTC ruled in favor of Demetria. The bank filean appeal with
the CA.
Meanwhile,
Henry Co., who is a stockholder in the said bank, filed a motion for
intervention with the trial court which was denied since the trial has
concluded already and the case is now pending appeal. Subsequently, Henry Co.,
filed a separate civil case against Ejercito, the successor-in-interest of
Demetria seeking to have the contract of sale be declared unenforceable against
the bank. Ejercito argued that the second case constitutes forum shopping since
it was barred by litis pendentia by virtue of the case then pending in the CA.
Issue:
whether
or not a court may refuse to take cognizance of a case on the ground of forum
shopping.
Held:
Yes.
Forum-shopping originated as
a concept in private international law.12 , where non-resident litigants are given the option to
choose the forum or place wherein to bring their suit for various reasons or
excuses, including to secure procedural advantages, to annoy and harass the
defendant, to avoid overcrowded dockets, or to select a more friendly venue. To
combat these less than honorable excuses, the principle of forum non conveniens was developed whereby a court, in conflicts
of law cases, may refuse impositions on its jurisdiction where it is not the
most "convenient" or available forum and the parties are not
precluded from seeking remedies elsewhere.
THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents.
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND MARCELO G. SANTOS, respondents.
FACTS: During his employment with the Mazoon
Printing Press in the Sultanate of Oman, respondent Santos received a letter
from Mr. Gerhard R. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr.
Schmidt informed respondent Santos that he was recommended by one Nestor
Buenio, a friend of his. On November 5, 1988, respondent Santos left for
Beijing, China. He started to work at the Palace Hotel. Subsequently,
respondent Santos signed an amended "employment agreement" with the
Palace Hotel, effective November 5, 1988. In the contract, Mr. Shmidt
represented the Palace Hotel. The Vice President (Operations and Development)
of petitioner MHICL Miguel D. Cergueda signed the employment agreement under
the word "noted". On August 10, 1989, the Palace Hotel informed
respondent Santos by letter signed by Mr. Shmidt that his employment at the
Palace Hotel print shop would be terminated due to business reverses brought
about by the political upheaval in China. On September 5, 1989, the Palace
Hotel terminated the employment of respondent Santos and paid all benefits due
him, including his plane fare back to the Philippines. On October 24, 1989,
respondent Santos, through his lawyer, Atty. Ednave wrote Mr. Shmidt, demanding
full compensation pursuant to the employment agreement. On February 20, 1990,
respondent Santos filed a complaint for illegal dismissal with the Arbitration
Branch, National Capital Region, National Labor Relations Commission (NLRC).
The Palace Hotel and Mr. Shmidt were not served with summons and neither
participated in the proceedings before the Labor Arbiter. On June 27, 1991,
Labor Arbiter decided the case against petitioners. On July 23, 1991,
petitioners appealed to the NLRC, arguing that the POEA, not the NLRC had
jurisdiction over the case.
ISSUE: Whether or not the NLRC was the proper
forum for the instant case.
DECISION: The NLRC was a seriously
inconvenient forum. Under the rule of forum non conveniens, a Philippine court
or agency may assume jurisdiction over the case if it chooses to do so
provided: (1) that the Philippine court is one to which the parties may
conveniently resort to; (2) that the Philippine court is in a position to make
an intelligent decision as to the law and the facts; and (3) that the
Philippine court has or is likely to have power to enforce its decision.37 The
conditions are unavailing in the case at bar.
FACTS:
The Respondent’s decedents died in an aircraft in the Scottish
Highlands. All the decedents were Scottish residents, as were their heirs. As
the decedents' personal representative, respondent filed suit against
petitioner in the United States because petitioner manufactured the aircraft in
Pennsylvania and the law was more favorable to their case. Petitioner wanted to
litigate the tort action in Scotland.
ISSUE:
Whether the possibility of an unfavorable change of the law in
plaintiff’s home forum bar dismissal under forum non convenient (Transfer to a
More Convenient Forum)?
ANSWER:
No, the possibility of an unfavorable change in the law should not, by
itself, bar dismissal.
The possibility of an unfavorable change in the law in Scotland should
not, by itself, bar dismissal. The court held that plaintiffs may not defeat a
motion to dismiss on the ground of forum non conveniens merely by showing that
the substantive law that would be applied in the alternative forum is less
favorable to the plaintiffs than that of the chosen forum, since the
possibility of a change in substantive law should ordinarily not be given
conclusive or even substantial weight in the forum non conveniens inquiry. In
this case the proper forum was Scotland given that fewer evidentiary problems
would be posed if the trial were held in Scotland; the inability to implead
potential third party defendants clearly supported holding the trial in
Scotland; and public interest favored trial in Scotland, the accident having
occurred in its air space, all the decedents being Scottish, and apart from the
manufacturers, all potential plaintiffs and defendants being either Scottish or
English.
GOLF OIL CORP. vs GILBERT
330 US 501, 1947
United States Supreme Court
GULF OIL CORPORATION v. GILBERT(1947)
No. 93
Argued: Decided:
March 10, 1947
[330 U.S. 501, 502] Messrs. Bernard A. Golding
and Archie D. Gray, both of Houston, Tex., for petitioner.
Mr. Max J. Gwertzman, of New York City, for respondent.
Mr. Justice JACKSON delivered the opinion of the Court.
The questions are whether the United States District
Court has inherent power to dismiss a suit pursuant to the doctrine of forum
non conveniens and, if so, whether that power was abused in this case.
The respondent-plaintiff brought this action in the
Southern District of New York, but resides at Lynchburg, Virginia, where he operated
a public warehouse. He alleges that the petitioner-defendant, in violation of
the ordinances of Lynchburg, so carelessly handled a delivery of gasoline to
his warehouse tanks and pumps as to cause [330 U.S. 501,
503] an explosion and fire which consumed the warehouse
building to his damage of $41,889.10, destroyed merchandise and fixtures to his
damage of $3,602. 40, caused injury to his business and profits of $20,038.27,
and burned the property of customers in his custody under warehousing agreements
to the extent of $300,000. He asks judgment of $365,529.77 with costs and
disbursements, and interest from the date of fire. The action clearly is one in
tort.
The petitioner-defendant is a corporation organized under
the laws of Pennsylvania, qualified to do business in both Virginia and New
York, and it has designated officials of each state as agents to receive
service of process. When sued in New York, the defendant, invoking the doctrine
of forum non conveniens, claimed that the appropriate place for trial is
Virginia where the plaintiff lives and defendant does business, where all
events in litigation took place, where most of the witnesses reside, and where
both state and federal courts are available to plaintiff and are able to obtain
jurisdiction of the defendant.
The case, on its merits, involves no federal question and
was brought in the United States District Court solely because of diversity in
citizenship of the parties. Because of the charact r of its jurisdiction and
the holdings of and under Erie Railroad Co. v. Tompkins, 304 U.S. 64 , 58 S.Ct.
817, 114 A.L.R. 1487, the District Court considered that the law of New York as
to forum non conveniens applied and that it required the case to be left to
Virginia courts. 1 It
therefore dismissed.
The Circuit Court of Appeals disagreed as to the
applicability of New York law, took a restrictive view of the application of
the entire doctrine in federal courts and, one judge dissenting,
reversed. 2 The
case is here on certiorari. 328 U.S. 830 , 66 S.Ct. 1123
It is conceded that the venue statutes of the United States
permitted the plaintiff to commence his action in the Southern District of New
York and empower that court to entertain it. 3 But
that does not settle the question whether it must do so. Indeed the doctrine of
forum non conveniens can never apply if there is absence of jurisdiction or
mistake of venue.
This Court, in one form of words or another, has
repeatedly recognized the existence of the power to decline jurisdiction in
exceptional circumstances. As formulated by Mr. Justice Brandeis the rule is:
'Obviously, the proposition that a court having jurisdiction must exercise it,
is not universally true; else the admiralty court could never decline
jurisdiction on the ground that the litigation is between foreigners. Nor is it
true of courts administering other systems of our law. Courts of equity and of
law also occasionally decline, in the interest of justice, to exercise
jurisdiction, where the suit is between aliens or nonresidents, or where for
kindred reasons the litigation can more appropriately be conducted in a foreign
tribunal.' Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413
422, 423, 52 S.Ct. 413, 415.
We later expressly said that a state court 'may in
appropriate cases apply the doctrine of forum non conveniens.' Broderick v.
Rosner, 294 U.S. 629, 643 , 55 S.Ct. 589, 592, 79 l.Ed. 1100, 100 A.L.R. 1133;
Williams v. State of North Carolina, 317 U.S. 287 , 294, n. 5, 63 S.Ct. 207,
143 A.L.R. 1273. Even where federal rights binding on state courts under the
Constitution are sought to be adjudged, this Court has sustained state courts
in a refusal to entertain a litigation between a nonresident and a foreign
corporation or between two foreign corporations. Douglas v. New York, N.H.
& H.R. Co., 279 U.S. 377 , 49 S.Ct. 355; Anglo- American Provision Co.
v. [330 U.S. 501, 505] Davis Provision
Co. No. 1, 191 U.S. 373 , 24 S.Ct. 92. It has held the use of an inappropriate
forum in one case an unconstitutional burden on interstate commerce. Davis v.
Farmers' Co-operative Equity Co., 262 U.S. 312 , 43 S.Ct. 556. On substantially
forum non conveniens grounds we have required federal courts to relinquish
decision of cases within their jurisdiction where the court would have to
participate in the administrative policy of a state. Railroad Commission of
Texas v. Rowan & Nichols Oil Co., 311 U.S. 570 , 61 S.Ct. 343; Burford v.
Sun Oil Co., 319 U.S. 315 , 63 S.Ct. 1098; but cf. Meredith v. Winter Haven,
320 U.S. 228 , 64 S.Ct. 7. And most recently we decided Williams v. Green Bay
& Western R. Co., 326 U.S. 549 , 66 S.Ct. 284, in which the Court, without
questioning the validity of the doctrine held it had been applied in that case
without justification. 4
It is true that in cases under the Federal Employers'
Liability Act, 45 U.S.C.A. 51 et seq., we have held that plaintiff's choice of
a forum cannot be defeated on the basis of forum non conveniens. But this was
because the special venue act under which those cases are brought was believed
to require it. Baltimore & Ohio R. Co. v. Kepner, 314 U.S. 44 , 62 S.Ct. 6,
136 A.L.R. 1222; Miles v. Illinois Central R. Co., 315 U.S. 698 , 62 S.Ct. 827,
146 A.L.R. 1104. Those decisions do not purport to modify the doctrine as to
other cases governed by the general venue statutes. [330 U.S.
501, 506] But the court below says that 'The Kepner case
... warned against refusal of jurisdiction in a particular case controlled by
congressional act; here the only difference is that congressional act, plus
judicial interpretation (under the Neirbo case), spells out the result.' 153
F.2d at page 885. The Federal Employers' Liability Act, however, which controlled
decision in the Kepner case, specifically provides where venue may be had in
any suit on a cause of action arising under that statute. What the court below
refers to as 'congressional act, plus judicial interpretation,' is the general
statute of venue in diversity suits, plus our decision that it gives the
defendant 'a personal privilege respecting the venue, or place of suit, which
he may assert, or may waive, at his election,' Neirbo Co. v. Bethlehem
Shipbuilding Corp., Ltd., 308 U.S. 165, 168 , 60 S.Ct. 153, 154, 128 A.L.R.
1437. The Federal Employers' Liability Act, as interpreted by Kepner, increases
the number of places where the defendant may be sued and makes him accept the
plaintiff's choice. The Neirbo case is only a declaration that if the
defendant, by filing consent to be sued, waives its privilege to be sued at its
place of residence, it may be sued in the federal courts at the place where it
has consented to be sued. But the general venue statute plus the Neirbo
interpretation do not add up to a declaration that the court must respect the
choice of the plaintiff, no matter what the type of suit or issues involved.
The two taken together mean only that the defendant may consent to be sued, and
it is proper for the federal court to take jurisdiction, not that the
plaintiff's choice cannot be questioned. The defendant's consent to be sued
extends only to give the court jurisdiction of the person; it assumes that the
court, having the parties before it, will apply all the applicable law, including,
in those cases where it is appropriate, its discretionary judgment as to
whether the suit should be entertained. In all cases in which the doctrine of
forum non conveniens comes into [330 U.S. 501, 507] play,
it presupposes at least two forums in which the defendant is amenable to
process; the doctrine furnishes criteria for choice between them.
II.
The principle of forum non conveniens is simply that a
court may resist imposition upon its jurisdiction even when jurisdiction is
authorized by the letter of a general venue statute. These statutes are drawn
with a necessary generality and usually give a plaintiff a choice of courts, so
that he may be quite sure of some place in which to pursue his remedy. But the
open door may admit those who seek not simply justice but perhaps justice
blended with some harassment. A plaintiff sometimes is under temptation to
resort to a strategy of f rcing the trial at a most inconvenient place for an
adversary, even at some inconvenience to himself.
Many of the states have met misuse of venue by investing
courts with a discretion to change the place of trial on various grounds, such
as the convenience of witnesses and the ends of justice. 5 The
federal law contains no such express criteria to guide the district court in
exercising its power. But the problem is a very old one affecting the
administration of the courts as well as the rights of litigants, and both in
England and in this country the common law worked out techniques and criteria
for dealing with it. 6 [330 U.S. 501, 508] Wisely, it has not been
attempted to catalogue the circumstances which will justify or require either
grant or denial of remedy. The doctrine leaves much to the discretion of the
court to which plaintiff resorts, and experience has not shown a judicial
tendency to renounce one's own jurisdiction so strong as to result in many abuses. 7
If the combination and weight of factors requisite to
given results are difficult to forecast or state, those to be considered are
not difficult to name. An interest to be considered, and the one likely to be
most pressed, is the private interest of the litigant. Important considerations
are the relative ease of access to sources of proof; availability of compulsory
process for attendance of unwilling, and the cost of obtaining attendance of
willing, witnesses; possibility of view of premises, if view would be
appropriate to the action; and all other practical problems that make trial of
a case easy, expeditious and inexpensive. There may also be questions as to the
enforcibility of a judgment if one is obtained. The court will weigh relative
advantages and obstacles to fair trial. It is often said that the plaintiff may
not, by choice of an inconvenient forum, 'vex,' 'harass,' or 'oppress' the
defendant by inflicting upon him expense or trouble not necessary to his own
right to pursue his remedy. 8 But
unless the balance is strongly in favor of the defendant, the plaintiff's
choice of forum should rarely be disturbed.
Factors of public interest also have place in applying
the doctrine. Administrative difficulties follow for courts when litigation is
piled up in congested centers instead of being handled at its origin. Jury duty
is a burden that ought not to be imposed upon the people of a community [330 U.S. 501, 509] which has no relation to the
litigation. In cases which touch the affairs of many persons, there is reason
for holding the trial in their view and reach rather than in remote parts of
the country where they can learn of it by report only. There is a local interest
in having localized controversies decided at home. There is an appropriateness,
too, in having the trial of a diversity case in a forum that is at home with
the state law that must govern the case, rather than having a court in some
other forum untangle problems in conflict of laws, and in law foreign to
itself.
The law of New York as to the discretion of a court to
apply the doctrine of forum non conveniens, and as to the standards that guide
discretion is, so far as here involved, the same as the federal rule. Murnan v.
Wabash Ry. Co., 246 N.Y. 244, 158 N.E. 508, 54 A.L.R. 1522; Wedemann v. United
States Trus Co. of New York, 258 N.Y. 315, 179 N.E. 712, 79 A.L.R. 1320; see
Gregonis v. Philadelphia & Reading Coal & Iron Co ., 235 N.Y. 152, 139
N.E. 223, 32 A.L.R. 1. It would not be profitable, therefore, to pursue inquiry
as to the source from which our rule must flow.
III.
Turning to the question whether this is one of those
rather rare cases where the doctrine should be applied, we look first to the
interests of the litigants.
The plaintiff himself is not a resident of New York, nor
did any event connected with the case take place there, nor does any witness
with the possible exception of experts live there. No one connected with that
side of the case save counsel for the plaintiff resides there, and he has
candidly told us that he was retained by insurance companies interested
presumably because of subrogation. His affidavits and argument are devoted to
controvering claims as to defendant's inconvenience rather than to showing that
the present forum serves any convenience [330 U.S. 501,
510] of his own, with one exception. The only
justification for trial in New York advanced here is one rejected by the
district court and is set forth in the brief as follows: 'This Court can
readily realize that an action of this type, involving as it does a claim for
damages in an amount close to $ 400,000, is one which may stagger the
imagination of a local jury which is surely unaccustomed to dealing with
amounts of such a nature. Furthermore, removed from Lynchburg, the respondent
will have an opportunity to try this case free from local influences and
preconceived notions which make it difficult to procure a jury which has no
previous knowledge of any of the facts herein.'
This unproven premise that jurors of New York live on
terms of intimacy with $400,000 transactions is not an assumption we easily
make. Nor can we assume that a jury from Lynchburg and vicinity would be
'staggered' by contemplating the value of a warehouse building that stood in
their region, or of merchandise and fixtures such as were used there, nor are
they likely to be staggered by the value of chattels which the people of that
neighborhood put in storage. It is a strange argument on behalf of a Virginia
plaintiff that the community which gave him patronage to make his business
valuable is not capable of furnishing jurors who know the value of the goods
they store, the building they are stored in, or the business their patronage
creates. And there is no specification of any local influence, other than
accurate knowledge of local conditiions, that would make a fair trial
improbable. The net of this is that we cannot say the District Court was bound
to entertain a provincial fear of the provincialism of a Virginia jury. That
leaves the Virginia plaintiff without even a suggested reason for transporting
this suit to New York. [330 U.S. 501, 511] Defendant
points out that not only the plaintiff, but every person who participated in
the acts charged to be negligent, resides in or near Lynchburg. It also claims
a need to interplead an alleged independent contractor which made the delivery
of the gasoline and which is a Virginia corporation domiciled in Lynchburg,
that it cannot interplead in New York. There also are approximately 350 persons
residing in and around Lynchburg who stored with plaintiff the goods for the
damage to which he seeks to recover. The extent to which they have left the
community since the fire and the number of them who will actually be needed is
in dispute. The complaint alleges that defendant's conduct violated Lynchburg
ordinances. Conditions are said to require proof by firemen and by many others.
The learned and experienced trial judge was not unaware that litigants
generally manage to try their cases with fewer witnesses than they predict in
such motions as this. But he was justified in concluding that this trial is
likely to be long and to involve calling many witnesses, and that Lynchburg,
some 400 miles from New York, is the source of all proofs for either side with
possible exception of e perts. Certainly to fix the place of trial at a point
where litigants cannot compel personal attendance and may be forced to try
their cases on deposition, is to create a condition not satisfactory to court,
jury or most litigants. Nor is it necessarily cured by the statement of
plaintiff's counsel that he will see to getting many of the witnesses to the
trial and that some of them 'would be delighted to come to New York to
testify.' There may be circumstances where such a proposal should be given
weight. In others the offer may not turn out to be as generous as defendant or
court might suppose it to be. Such matters are for the District Court to decide
in exercise of a sound discretion.
The court likewise could well have concluded that the
task of the trial court would be simplified by trial in Vir- [330
U.S. 501, 512] ginia. If trial was in a state court, it
could apply its own law to events occurring there. If in federal court by
reason of diversity of citizenship, the court would apply the law of its own
state in which it is likely to be experienced. The course of adjudication in
New York federal court might be beset with conflict of laws problems all
avoided if the case is litigated in Virginia where it arose.
We are convinced that the District Court did not exceed
its powers or the bounds of its discretion in dismissing plaintiff's complaint
and remitting him to the courts of his own community. The Circuit Court of
Appeals took too restrictive a view of the doctrine as approved by this Court.
Its judgment is reversed.
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