Hasegawa vs. Kitamura

Choice-of-law principles and the doctrine of forum non conveniens cannot deprive Philippine trial courts of subject matter jurisdiction over a case that is lawfully cognizable by them under statutory law.

Nippon Engineering Consultants Co., Ltd., a Japanese firm, entered into an Independent Contractor Agreement (ICA) with Minoru Kitamura, a Japanese national permanently residing in the Philippines, for a one-year term starting April 1, 1999. Kitamura was assigned as project manager for the Southern Tagalog Access Road (STAR) Project. When Nippon secured the Bongabon-Baler Road Improvement (BBRI) Project from the DPWH, Kitamura was named project manager in the contract appendix. Nippon subsequently informed Kitamura that his ICA would not be renewed upon its expiration on March 31, 2000. After Nippon refused Kitamura's demand to be assigned to the BBRI Project and replaced him, Kitamura filed a civil case for specific performance and damages in the Regional Trial Court of Lipa City.

• The Contract and Assignment: On March 30, 1999, Nippon and Kitamura executed an ICA for a one-year term, assigning Kitamura as project manager for the STAR Project in the Philippines.
• The BBRI Project and Non-Renewal: On January 28, 2000, the DPWH engaged Nippon for the BBRI Project, naming Kitamura as project manager in the contract appendix. On February 28, 2000, Nippon informed Kitamura that his ICA would expire on March 31, 2000, without automatic renewal.
• Demand and Refusal: Kitamura, through counsel, demanded assignment to the BBRI project. Nippon refused, insisting the fixed-term contract had expired.
• Filing of Civil Case: On June 1, 2000, Kitamura filed Civil Case No. 00-0264 for specific performance and damages with the RTC of Lipa City.
• Motion to Dismiss: Petitioners moved to dismiss, arguing that Philippine courts lacked jurisdiction because the contract was perfected in Japan between Japanese nationals, invoking lex loci celebrationis and lex contractus.
• Procedural Skirmishes: On June 29, 2000, the RTC denied the motion to dismiss, applying lex loci solutionis. Petitioners filed a first Petition for Certiorari with the CA, which was dismissed on procedural grounds (lack of material dates, defective verification and certification). Petitioners filed a second Petition for Certiorari, which was denied on the merits, affirming the RTC.

• Jurisdiction Based on Choice of Law: Petitioners argued that Philippine courts lacked subject matter jurisdiction because the ICA was perfected in Japan between Japanese nationals, invoking lex loci celebrationis and lex contractus.
• State of the Most Significant Relationship Rule: Petitioners maintained that local courts had no substantial relationship to the parties or the transaction.
• Forum Non Conveniens: Petitioners asserted that the RTC was an inconvenient forum to hear the case.
• Procedural Compliance: Petitioners contended that the dismissal of their first certiorari petition on procedural grounds did not bar the filing of the second petition, and that the authorization for their corporate representative substantially complied with the Rules.

• Res Judicata and Forum Shopping: Respondent countered that the finality of the CA's dismissal of the first certiorari petition barred the filing of the second petition and the subsequent petition for review.
• Lack of Corporate Authorization: Respondent argued that petitioner Hasegawa was not authorized by Nippon's board of directors to verify and certify the petition on behalf of the corporation, rendering the petition defective.

• Procedural - Dismissal of First Petition: Whether the dismissal of the first certiorari petition on procedural grounds bars the filing of a second certiorari petition.
• Procedural - Verification and Authorization: Whether the lack of board authorization for a corporate officer to verify and certify the petition warrants its dismissal.
• Procedural - Certiorari as Remedy: Whether a Rule 65 petition for certiorari is the proper remedy to question the denial of a motion to dismiss.
• Jurisdiction vs. Choice of Law: Whether choice-of-law principles (lex loci celebrationis, lex contractus, "state of the most significant relationship rule") can deprive Philippine courts of subject matter jurisdiction over a case cognizable by them under statute.
• Forum Non Conveniens: Whether the doctrine of forum non conveniens is a proper ground for a motion to dismiss based on lack of jurisdiction.

• Procedural - Dismissal of First Petition: Dismissal of a petition due to defective certification against forum shopping, verification, or lack of material dates is without prejudice, allowing the refiling of a second petition within the reglementary period.
• Procedural - Verification and Authorization: The petition was denied on this ground. Corporate powers are exercised by the board of directors; an officer cannot bind the corporation without board authority. Because Hasegawa lacked board authorization, substantial compliance was insufficient to cure the defect in verification and certification.
• Procedural - Certiorari as Remedy: Certiorari is not the proper remedy to question an interlocutory order denying a motion to dismiss; the correct recourse is to file an answer, proceed to trial, and appeal an adverse judgment.
• Jurisdiction vs. Choice of Law: Choice-of-law rules are inapplicable to jurisdictional questions. Jurisdiction is conferred by law and determined by the allegations of the complaint, whereas choice-of-law rules determine which state's law applies to the substantive issues. No conflict of laws was even pleaded or proved by petitioners.
• Forum Non Conveniens: Forum non conveniens is not included as a ground for a motion to dismiss under Rule 16, Section 1 of the Rules of Court. Its application depends on the facts of the case and is addressed to the sound discretion of the trial court, making it a matter of defense rather than a jurisdictional bar.

• Jurisdiction vs. Choice of Law — Jurisdiction considers whether it is fair to cause a defendant to travel to the forum state, while choice of law asks whether the application of a substantive law is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. In this case, because the only issue was jurisdiction, choice-of-law rules (lex loci celebrationis, lex contractus, "state of the most significant relationship rule") were inapplicable and not yet called for.
• Dismissal Without Prejudice — A dismissal based on procedural defects, such as a defective certification against forum shopping, lack of verification, or failure to state material dates, is without prejudice and does not constitute res judicata. The parties remain free to litigate the matter in a subsequent action. In this case, the dismissal of the first certiorari petition on such grounds did not bar the filing of the second petition.
• Corporate Representation — Corporate powers are exercised by the board of directors; no person, not even its officers, can bind the corporation in the absence of authority from the board. In this case, an authorization signed only by the president and CEO was insufficient to empower a corporate officer to verify and certify a petition on behalf of the corporation.
• Forum Non Conveniens — A court may refuse to entertain a case where it is not the most convenient or available forum. However, it is not a ground for a motion to dismiss under the Rules of Court. Its propriety depends on a factual determination and is addressed to the sound discretion of the trial court, functioning more as a matter of defense than a jurisdictional bar.

• "Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties."
• "Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law. They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for."

• Insular Government v. Frank, 13 Phil. 236 (1909) — Cited by the RTC for the principle that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance (lex loci solutionis).
• Loquias v. Office of the Ombudsman, 392 Phil. 596 (2000) — Followed regarding the rule that substantial compliance will not suffice in a matter demanding strict observance of the Rules, specifically concerning verification and certification against forum shopping.
• Bank of America NT & SA v. Court of Appeals, 448 Phil. 181 (2003) — Followed regarding the exceptions to the rule that certiorari is not the proper remedy for interlocutory orders, and cited for the definition and application of forum non conveniens.

• Rule 45, Rules of Court — Governs the petition for review on certiorari filed before the Supreme Court to assail the CA's decision.
• Rule 65, Rules of Court — Governs the special civil action of certiorari. Section 4 prescribes the 60-day period to file, and the Court noted that a second petition filed within this period after a procedural dismissal is permissible.
• Rule 16, Section 1, Rules of Court — Enumerates the grounds for a motion to dismiss. The Court noted that forum non conveniens is not included therein.
• Rule 46, Section 3, Rules of Court — Requires petitions under Rule 65 to indicate material dates. Non-compliance warrants dismissal without prejudice.

Consuelo Ynares-Santiago (Chairperson), Ma. Alicia Austria-Martinez, Minita V. Chico-Nazario, Ruben T. Reyes