heine - babcock

8/16/2019 Heine - Babcock

1/96

45 F.2d 426 (1930)HEINE

v.NEW YORK LIFE INS. CO.

No. 10465.Disti!t C"#t$ D. O%&"'.

December 1, 1930.C. T. Haas and E. B. Seabrook, both o !ort"and, #r., or $"a%nt%.H&nt%n'ton, (%"son ) H&nt%n'ton and C"ark ) C"ark, a"" o !ort"and, #r., or deendant.BE*N, D%str%ct +&d'e.Th%s %s one o a ser%es o cases $end%n' %n th%s co&rt a'a%nst the Ne -ork %e /ns&rance Com$anand the &ard%an /ns&rance Com$an, each o h%ch %s a Ne -ork cor$orat%on, to reco2er on someto h&ndred and ort "%e %ns&rance $o"%c%es made and %ss&ed b the deendants %n erman, %na2or o erman c%t%ens and s&bects, and $aab"e %n erman marks. The $o"%c%es o the Ne -ork%e /ns&rance Com$an ere %ss&ed $r%or to *&'&st 1, 1914, and those o the &ard%an $r%or to a1, 191. *s a cond%t%on to the%r r%'ht to do b&s%ness %n erman, the %ns&rance com$an%es erere7&%red to and d%d s&bm%t to the s&$er2%s%on and contro" o the erman %ns&rance o%c%a"s, to %n2estthe reser2es ar%s%n' rom erman $o"%c%es %n erman sec&r%t%es, and to estab"%sh, and the do no

ma%nta%n, an o%ce %n that co&ntr %th a res%dent re$resentat%2e or a'ent &$on hom ser2%ce o$rocess can be made.

The act%ons no $end%n' are bro&'ht and $rosec&ted %n the name o, or as ass%'nee o the %ns&redb, certa%n $art%es %n the 8n%ted States and erman, &nder an %rre2ocab"e $oer o attorne, bh%ch the are a&thor%ed and em$oered to s&e or, co""ect, rece%2e, and rece%$t or a"" s&ms d&e or o%n' &nder the $o"%c%es, or com$rom%se the same %n cons%derat%on o an ass%'nment and transer tothem o the &nd%2%ded 5 $er cent. %nterest %n the $o"%c%es and a"" r%'hts accr&%n' there&nder.None o the $art%es to the "%t%'at%on are res%dents or %nhab%tants o th%s d%str%ct. The $"a%nt%s res%de %n,and are c%t%ens o, the re$&b"%c o erman. The deendants are cor$orat%ons or'an%ed and e:%st%n'&nder the "as o Ne -ork, %th the%r $r%nc%$a" o%ces %n that state, %th stat&tor a'ents %n #re'on,&$on hom ser2%ce can be made. None o the ca&ses o act%on arose here, nor do an o the

mater%a" %tnesses res%de %n the d%str%ct, nor are an o the records o the deendant com$an%es$erta%n%n' to the $o"%c%es %n s&%t %n the d%str%ct, b&t s&ch records are e%ther at the home o%ce %n Ne-ork or at the%r o%ces %n erman. The co&rts o erman and Ne -ork are o$en and &nct%on%n'and com$etent to take &r%sd%ct%on o the contro2ers%es, and ser2%ce can be made &$on thedeendants %n e%ther o s&ch &r%sd%ct%ons. To re7&%re the deendants to deend the act%ons %n th%sd%str%ct o&"d %m$ose &$on them 'reat and &nnecessar %ncon2en%ence and e:$ense, and $robab"com$e" them to $rod&ce here ;three tho&sand m%"es rom the%r home o%ce< n&mero&s records,books, and $a$ers, a"" o h%ch are %n da%" &se b %t %n tak%n' care o c&rrent b&s%ness./n add%t%on, %t o&"d no do&bt cons&me months o the t%me o th%s co&rt to tr and d%s$ose o thesecases, th&s necessar%" d%sarran'%n' the ca"endar, res&"t%n' %n de"a, %ncon2en%ence, and e:$ense toother "%t%'ants ho are ent%t"ed to %n2oke %ts &r%sd%ct%on.

8nder these c%rc&mstances, the deendants, h%"e conced%n' that the co&rt has &r%sd%ct%on o the

$erson and s&bect=matter, &r'es that %t sho&"d re&se, %n %ts d%scret%on, to e:erc%se s&ch &r%sd%ct%on./ &nhes%tat%n'" conc&r %n th%s 2%e, or, as sa%d b r. +&st%ce Ho"mes %n C&ba >a%"road Co. 2.Crosb, 8.S. 4?3, 3 S. Ct. 13, 133, 56 . Ed. ?4, 3 . >. *. ;N. S.< 40@ A/t sho&"d beremembered that $art%es do not enter %nto c%2%" re"at%ons %n ore%'n &r%sd%ct%ons %n re"%ance &$on o&rco&rts. The co&"d not com$"a%n % o&r co&rts re&sed to medd"e %th the%r aa%rs, and rem%tted themto the $"ace that estab"%shed and o&"d enorce the%r r%'hts. The on" &st 'ro&nd or com$"a%nto&"d be % the%r r%'hts and "%ab%"%t%es, hen enorced b o&r co&rts, sho&"d be meas&red b ad%erent r&"e rom that &nder h%ch the $art%es dea"t.A

https://supreme.justia.com/cases/federal/us/222/473/https://supreme.justia.com/cases/federal/us/222/473/


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42 /t %s a$$arent that the $"a%nt%s are seek%n' b these act%ons to %m$ose on the deendants a"%ab%"%t &nder a d%erent r&"e than Athat &nder h%ch the $art%es dea"t.A

The co&rts o erman ha2e r&"ed that an $erson seek%n' to reco2er on a c%2%" contract made %nerman $r%or to *&'&st, 194, and $aab"e %n marks, can on" reco2er on the bas%s $ro2%ded %n themonetar "a o 194. an%est" the $"a%nt%s are not $roceed%n' on an s&ch theor.

/t %s ar'&ed b the $"a%nt%s that, beca&se the co&rt has &r%sd%ct%on o the s&bect=matter and the$art%es, %t has no d%scret%on, b&t sho&"d $roceed %th the case, re'ard"ess o here the ca&se oact%on arose, or the "a b h%ch %t %s contro""ed, or the res%dence or con2en%ence o the $art%es and%tnesses, or the d%%c&"t the co&rt o&"d enco&nter %n attem$t%n' to %nter$ret and enorce a ore%'ncontract, or the %ntererence %th the other b&s%ness o the co&rt. B&t that %s a matter rest%n' %n %tsd%scret%on. /t ma reta%n &r%sd%ct%on, or %t ma, %n the e:erc%se o a so&nd d%scret%on, dec"%ne to do so,as the c%rc&mstances s&''est. The co&rts ha2e re$eated" re&sed, %n the%r d%scret%on, to enterta%n

&r%sd%ct%on o ca&ses o act%on ar%s%n' %n a ore%'n &r%sd%ct%on, here both $art%es are nonres%dents o the or&m. re'on%s 2. !h%"ade"$h%a ) >. Coa" ) /ron Co., 35 N.-. 15, 139 N.E. 3, 3 *. . >. 1,and note !%etraro%a 2. Ne +erse ) H&dson >%2er >. ) err Co., 19? N.-. 434, 91 N.E. 10re'on%s 2. !. ) >. Coa" ) /ron Co., 35 N.-. 15, 139 N.E. 3, 3 *. . >. 1 Steart 2.%tchenber', 14 a. 195, 6 So. ?34 Sm%th 2. &t&a" %e /ns&rance Co., 14 *""en ;96 ass.< 336=

343 Nat%ona" Te"e$hone '. Co. 2. D& Bo%s, 165 ass. 11?, 4 N.E. 510, 30 . >. *. 6, 5 *m.St. >e$. 503 Co""ard 2. Beach, 1 *$$. D%2. 5, 1 N.-.S. 619 reat (estern >a%"a Co. 2. %""er,19 %ch. 305 D%sconto ese""schat 2. 8mbre%t, 1? (%s. 651, 106 N.(. 1, 15 . >. *. ;N. S.<1045, 115 *m. St. >e$. 1063.

*s sa%d b r. +&st%ce Brad"e %n The Be"'en"and, 114 8.S. 355, 5 S. Ct. 60, 64, 9 . Ed. 15@AC%rc&mstances oten e:%st h%ch render %t %ne:$ed%ent or the co&rt to take &r%sd%ct%on ocontro2ers%es beteen ore%'ners %n cases not ar%s%n' %n the co&ntr o the or&m as, here the are'o2erned b the "as o the co&ntr to h%ch the $art%es be"on', and there %s no d%%c&"t %n a resortto %ts co&rts or here the ha2e a'reed to resort to no other tr%b&na"s not on the 'ro&nd that %thas not &r%sd%ct%on, b&t that, rom mot%2es o con2en%ence, or %nternat%ona" com%t, %t %"" &se %tsd%scret%on hether to e:erc%se &r%sd%ct%on or not.A

See, a"so, Charter Sh%$$%n' Co. 2. Bor%n', 1 8.S. 515, 50 S. Ct. 400, ?4 . Ed. 100.

These, %n m &d'ment, are cases o that k%nd. The are act%ons bro&'ht on ca&ses o act%on ar%s%n'%n erman. The contract o %ns&rance as made and to be $a%d there and %n erman c&rrenc. /t %sto be constr&ed and '%2en eect accord%n' to the "as o the $"ace here %t as made. *m. )En'. Enc. o a ;d Ed.< 1350. The co&rts o th%s co&ntr are estab"%shed and ma%nta%ned $r%mar%"to determ%ne contro2ers%es beteen %ts on c%t%ens and those ha2%n' b&s%ness there, and man%est"the co&rt ma $rotect %tse" a'a%nst a "ood o "%t%'at%on o2er contracts made and to be $erormed %n aore%'n co&ntr, here the $art%es and %tnesses are nonres%dents o the or&m, and no reason e:%stsh the "%ab%"%t, % an, cannot be enorced %n the co&rts o the co&ntr here the ca&se o act%onarose, or %n the state here the deendant as or'an%ed and has %ts $r%nc%$a" o%ces. Tr&e, theco&rts o Ne -ork ha2e dec"%ned to e:erc%se &r%sd%ct%on o2er act%ons bro&'ht on %ns&rance $o"%c%es

s%m%"ar to those %n s&%t. H%''%ns 2. N. -. /ns. Co., 0 *$$. D%2. ?60, N.-.S. 19, and on Nessen=Stone 2. N. -. %e /ns. Co.F1G B&t that aords no reason h th%s co&rt sho&"d do so. /t %s to me&nth%nkab"e that res%dents and c%t%ens o erman ma %m$ort bod%" %nto th%s co&rt n&mero&sact%ons a'a%nst a nonres%dent deendant, on contracts made and $aab"e %n erman, and %ns%st asa matter o r%'ht that, beca&se %t has obta%ned &r%sd%ct%on o the deendant b ser2%ce o %ts stat&tora'ent, the ta:$aers, c%t%ens, and res%dents o the d%str%ct ha2%n' b&s%ness %n the co&rt sho&"d standas%de and a%t the conc"&s%on o the case, here, as here, the co&rts o erman and o the homestate o the deendant are o$en and &nct%on%n'.

https://supreme.justia.com/cases/federal/us/114/355/https://supreme.justia.com/cases/federal/us/281/515/https://supreme.justia.com/cases/federal/us/114/355/https://supreme.justia.com/cases/federal/us/281/515/


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+&d'e T&cker, %n the state co&rt o &"tnomah co&nt, %n an ab"e and e""=cons%dered o$%n%on %n acase bro&'ht on one o the erman $o"%c%es ;ahn 2. Ne -ork


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634 F. S#**. +42 (19+6)

I' % ,NION C-RIDE COR/OR-ION -S /L-N DIS-SER - HO/-L$ INDI- IN

DECEER$ 19+4.

%sc. No. 1=3 ;+


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%m$o2er%shed s7&atters. 8C/ man&act&red the $est%c%des Se2%n and Tem%k at the Bho$a" $"ant at

the re7&est o, and %th the a$$ro2a" o, the o2ernment o /nd%a. ;*%da2%t o +ohn acDona"d

;AacDona"d *.A< at


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8n%on o /nd%aKs +45 co&nse", o2er 4?,000 c"a%ms ha2e been %"ed %n /nd%a $&rs&ant to the

Ascheme.A

There $resent" are 145 act%ons %"ed %n the 8n%ted States D%str%ct Co&rt or the So&thern D%str%ct o

Ne -ork &nder the +&d%c%a" !ane" or &"t%d%str%ct %t%'at%onKs order o ebr&ar 6, 195, %n2o"2%n'a$$ro:%mate" 00,000 $"a%nt%s.

Beore th%s Co&rt %s a mot%on b the deendant 8n%on Carb%de Cor$orat%on ;A8n%on Carb%deA< to

d%sm%ss the conso"%dated act%on on the 'ro&nds o forum non conveniens.

DISC,SSION

The doctr%ne o forum non conveniens a""os a co&rt to dec"%ne &r%sd%ct%on, e2en hen &r%sd%ct%on %sa&thor%ed b a 'enera" 2en&e stat&te. /n s&$$ort o %ts $os%t%on that the conso"%dated act%on beore

the Co&rt sho&"d be transerred to a more con2en%ent or&m %th%n the 8n%on o /nd%a $&rs&ant to th%s

doctr%ne, 8n%on Carb%de re"%es on the 8n%ted States S&$reme Co&rtKs dec%s%ons %n Gulf Oil Corp. v.

Gilbert, 330 8.S. 501, 6? S. Ct. 39, 91 . Ed. 1055 ;194?< and Piper Aircraft Co. v. Reyno, 454 8.S.

35, 10 S. Ct. 5, ?0 . Ed. d 419 ;191


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ass&m$t%on that the cho%ce as con2en%ent. Koster at 54, 6? S. Ct. at 31. Con2erse",

the Piper Co&rt o&nd@

(hen the $"a%nt% %s ore%'n, hoe2er, th%s ass&m$t%on %s m&ch "ess reasonab"e. Beca&se the centra"

$&r$ose o anforum non conveniens %n7&%r %s to ens&re that the tr%a" %s con2en%ent, a ore%'n

$"a%nt%Ks cho%ce deser2es "ess deerence.

Piper 454 8.S. at 56, 10 S. Ct. at 66 ;ootnote om%tted


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that % the chance o a chan'e %n "a ere '%2en s&bstant%a" e%'ht, cho%ce o "a 7&est%ons o&"d

Abecome e:treme" %m$ortant.A Piper at 51, 10 S. Ct. at 63. 8.S. co&rts o&"d Aha2e to com$are

the r%'hts, remed%es, and $roced&res a2a%"ab"eA %th%n the to $ro$osed a"ternat%2e or&ms, to

determ%ne hether a d%sad2anta'eo&s chan'e %n "a o&"d occ&r &$on transer. #d. S%nce AFtGhe

doctr%ne o forum non conveniens, hoe2er, %s des%'ned %n $art to he"$ co&rts a2o%d cond&ct%n'

com$"e: e:erc%ses %n com$arat%2e "a,A the chan'e %n "a ana"s%s o&"d s&b2ert the doctr%ne

%tse". #d. Th&s, a co&rt en'a'ed %n the %n7&%r re'ard%n' the e:%stence and ade7&ac o an

a"ternat%2e or&m sho&"d not h%n'e %ts dec%s%on on an &na2orab"e chan'e %n "a.F3G

*nother $ract%ca" concern re"at%n' to the Achan'e %n "aA %n7&%r as d%sc&ssed b the Piper co&rt.

Based on the "%bera"%t o 8n%ted States edera" "a as com$ared to m&ch ore%'n "a %th res$ect to

a2a%"ab%"%t o str%ct "%ab%"%t or tort, ma""eab"e and d%2erse cho%ce o "a r&"es amon' the 50 states,

a2a%"ab%"%t o &r tr%a"s, cont%n'ent ee arran'ements and e:tens%2e d%sco2er $ro2%s%ons, the Co&rt

obser2ed that a chan'e o or&m m%'ht re7&ent" %n2o"2e an &na2orab"e chan'e o "a or ore%'n

$"a%nt%s s&%n' *mer%can deendants. Piper at 5, n. 1, 10 S. Ct. at 64, n. 1. Conse7&ent", %

the &na2orab"e chan'e %n "a ere a maor actor %n the ana"s%s@

FTGhe *mer%can co&rts, h%ch are a"read e:treme" attract%2e to ore%'n $"a%nt%s, o&"d become

e2en more attract%2e. The "o o "%t%'at%on %nto the 8n%ted States o&"d %ncrease and &rther con'est

a"read croded co&rts.

Piper at 5, 10 S. Ct. at 64 ;ootnotes om%tted


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To a 'reat e:tent, the $"a%nt%s %n th%s case ar'&e that /nd%an co&rts do not oer an ade7&ate or&m

or th%s "%t%'at%on b 2%rt&e o the re"at%2e A$roced&ra" and d%sco2er de%c%enc%es Fh%chG o&"d thart

the 2%ct%msK 7&est orA &st%ce. ;emorand&m %n #$$os%t%on b !"a%nt%sK E:ec&t%2e Comm%ttee

;Aemo %n #$$.A< at


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;a"anter *. at 11e$ort ;19?3< $$. 1=13emarks o Honorab"e (arren E. B&r'er, Ch%e +&st%ce,

S&$reme Co&rt o the 8n%ted States, 100 .>.D. 499, 534 ;193


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$erm%ts the cases to be treated As$eed%", eect%2e", e7&%tab" and to the best ad2anta'e o the

c"a%mants.A ;!a"kh%2a"a *. at 11


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to do %th the 7&a"%t o "e'a" ser2%ce $ro2%ded. an sma"" %rms %n th%s co&ntr $erorm ork at "east

on a $ar %th the "ar'est %rms. B%''er %s not necessar%" better.

oreo2er, s%nce the 8n%on o /nd%a $&r$orts to re$resent a"" the c"a%mants, %t %s "%ke" that % the case

ere transerred to /nd%a, the *ttorne enera" or So"%c%tor enera" o /nd%a and the *d2ocateenera" o adha !radesh, %th attendant stas, o&"d re$resent the c"a%mants. The /nd%an bar

a$$ears more than ca$ab"e o sho&"der%n' the "%t%'at%on % %t sho&"d be transerred to /nd%a.

;!a"kh%2a"a *. at 9


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+50 The $"ant %tse" as the $rod&ct o h%'h" com$"e: techno"o', b&t com$"e:%t o the techno"o'

cannot be e7&ated %th com$"e:%t o "e'a" %ss&es. The $r%nc%$"es o "%ab%"%t and dama'es %n2o"2ed %n

the Bho$a" cases are a"" e"" estab"%shed %n /nd%a. The com$"e:%t %s not %n the nat&re or

determ%nat%on o "e'a" %ss&es b&t %n the a$$"%cat%on o the "a to the e2ents h%ch took $"ace %nBho$a". (e"" sett"ed "a %s to be a$$"%ed to an &n&s&a" occ&rrence.

;!a"kh%2a"a *. at ?&"es o

C%2%" !roced&re % or hen an /nd%an co&rt s%ts %n &d'ment or $res%des o2er $retr%a" $roceed%n's %n

the Bho$a" "%t%'at%on.F?G *n d%sm%ssa" o the act%on no beore th%s Co&rt %s th&s cond%t%oned on

deendantKs consent to s&bm%t to d%sco2er on the *mer%can mode", e2en ater transer to another

&r%sd%ct%on.

The ostens%b"e "ack o de2%ces or th%rd=$art %m$"eader or or or'an%%n' com$"e: cases &nder the

"a o the state o adha !radesh are to other $roced&ra" de%c%enc%es h%ch $"a%nt%s assert

$rec"&de a %nd%n' that /nd%a oers an ade7&ate a"ternat%2e or&m. *ss&m%n' or the moment that,

&$on a$$ro$r%ate transer, the Bho$a" "%t%'at%on o&"d be ad&d%cated b the "oca" d%str%ct co&rt %n

Bho$a", and that the "a o adha !radesh o&"d be a$$"%ed, th%s Co&rt %s st%"" not mo2ed b

$"a%nt%sK ar'&ment re'ard%n' %m$"eader or com$"e: "%t%'at%on.

*"tho&'h no s$ec%%c $ro2%s%on %n the /nd%an Code o C%2%" !roced&re $erm%ts the %m$"ead%n' o th%rd=

$art%es rom hom contr%b&t%on %s so&'ht, other $ro2%s%ons %n the Code do $ro2%de or %m$"eader. *s

both $art%es to th%s mot%on state, #rder 1, >&"e 10;< o the /nd%an Code o C%2%" !roced&re Aa""os


14/96

the co&rt to add add%t%ona" $art%es % the $resence o those $art%es %s Lnecessar %n order to enab"e

the Co&rt eect%2e" and com$"ete" to ad&d%cate &$on and sett"e a"" 7&est%ons %n2o"2ed %n the s&%t.KA

;a"anter *. at 60 Dadachan% *. at 1&"e

that the Are$resentat%2eA s&%t %s e:$ress" "%m%ted to $ree:%st%n' 'ro&$s. The /nd%an d%str%ct co&rt

co&"d ado$t the r&"e or &se %n a ne" created c"ass o %n&red, hose members a"" ha2e Athe same

%nterestA %n estab"%sh%n' the "%ab%"%t o the deendant. *n /nd%an co&rt has "a a2a%"ab"e to create a

re$resentat%2e c"ass, or $erha$s a e d%erent re$resentat%2e c"asses. The AschemeA or re'%strat%on

and $rocess%n' o c"a%ms, see supra, at 4, co&"d $erorm the task o e2a"&at%n' the s$ec%%c amo&nts

o c"a%ms. oreo2er, r. Dadachan% '%2es at "east three e:am$"es here /nd%an co&rts ha2e

conso"%dated s&%ts $&rs&ant to the%r %nherent $oer &nder Sect%on 151 o the /nd%an Code o C%2%"

!roced&re. /n at "east one case, s&ch conso"%dat%on a""e'ed" occ&rred %tho&t consent o the


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$art%es. ;Dadachan% *. at 9


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'ranted. The $reerence o both $art%es to $"a ba"" on a d%stant %e"d %"" be taken to %ts "%m%t, %th

each $art be%n' ordered to be bo&nd b the dec%s%on o the res$ect%2e ore%'n reerees.

To s&m &$ the d%sc&ss%on to th%s $o%nt, the Co&rt determ%nes that the /nd%an "e'a" sstem $ro2%des an

ade7&ate a"ternat%2e or&m or the Bho$a" "%t%'at%on. ar rom e:h%b%t%n' a tendenc to be soA%nade7&ate or &nsat%sactorA as to $ro2%de Ano remed at a"",A the co&rts o /nd%a a$$ear to be e""

&$ to the task o hand"%n' th%s case. *n &na2orab"e chan'e %n "a or $"a%nt%s h%ch m%'ht be

s&ered &$on transer to the /nd%an co&rts, %"", b the r&"e o Piper, not be '%2en As&bstant%a"

e%'ht.A D%erences beteen the to "e'a" sstems, e2en % the %n&re to $"a%nt%sK detr%ment, do not

s&''est that /nd%a %s not an ade7&ate a"ternat%2e or&m. *s r. !a"kh%2a"a asserts %th some d%'n%t,

AFGh%"e %t %s tr&e to sa that the /nd%an sstem toda %s d%erent %n some res$ects rom the *mer%can

sstem, %t %s ho"" &ntr&e to sa that %t %s de%c%ent or %nade7&ate. D%erence %s not to be e7&ated

%th de%c%enc.A ;!a"kh%2a"a *. at 4


17/96

The %rst e:am$"e o a $r%2ate %nterest cons%derat%on d%sc&ssed %n Gilbert %s Are"at%2e ease o access

to so&rces o $roo.A *s stated, the ana"s%s o th%s %ss&e m&st h%n'e on the acts. %m%ted d%sco2er

on the %ss&e o forum non conveniens has taken $"ace, $&rs&ant to the Co&rtKs order o *&'&st 14,

195.F9G The Co&rt can thereore $roceed to d%sc&ss th%s 7&est%on.

8n%on Carb%de ar'&es that 2%rt&a"" a"" o the e2%dence h%ch %"" be re"e2ant at a tr%a" %n th%s case %s

"ocated %n /nd%a. 8n%on Carb%deKs $os%t%on %s that a"most a"" records re"at%n' to "%ab%"%t, and %tho&t

e:ce$t%on, a"" records re"e2ant to dama'es, are to be o&nd %n and aro&nd Bho$a". #n the "%ab%"%t

7&est%on 8n%on Carb%de asserts that the Bho$a" $"ant as mana'ed and o$erated ent%re" b /nd%an

nat%ona"s, ho ere em$"oed b 8C/. ;*%da2%t o (arren +. (oomer, ormer" (orks ana'er o

the Bho$a" $"ant ;A(oomer *.A< at


18/96

195 $eo$"e. ;(oomer *. at 13


19/96

To acc%dents h%ch occ&rred $re2%o&s" at the Bho$a" $"ant m%'ht a"so be o re"e2ance to the

"%ab%"%t %n7&%r %n th%s "%t%'at%on. #n December 4, 191, a $hos'ene 'as "eak k%""ed a 8C/

ma%ntenance orker. +55 >e$orts o the ata"%t ere sent to 8n%on Carb%de mana'ement %n the

8n%ted States. ;(oomer De$os%t%on, E:s. 30 and 31esearch and De2e"o$ment Centre, "ocated se2era" m%"es rom the Bho$a" $"ant or an

&nre"ated $&r$ose, and as on" co%nc%denta"" %n Bho$a" hen the "eak occ&rred. To the e:tent that

th%s $resence %n /nd%a %n 19 has an s%'n%%cance, r. #"dord, and an other 8n%ted States

em$"oees o 8n%on Carb%de ho cond&cted saet a&d%ts %n Bho$a" or ere $resent hen acc%dents

occ&rred there, ma be "on to Bho$a" or test%mon or d%sco2er.

/n add%t%on to saet data, to other t$es o $roo ma be re"e2ant to a tr%a" o th%s case on the

mer%ts. /normat%on re'ard%n' $"ant des%'n, comm%ss%on%n' and start=&$ ma bear &$on the "%ab%"%t

7&est%on. /normat%on $ert%nent to em$"oee tra%n%n' sho&"d a"so ha2e s%'n%%cance.

ea2%n' as%de the 7&est%on o hether the o2ernment o /nd%a or 8C/ chose the s%te and $rod&ct

o the Bho$a" $"ant, the Co&rt %"" e2a"&ate the acts h%ch bear on the %ss&e o re"e2ant records. The

%nd%n's be"o concern the "ocat%on o $roo on", and bear so"e" &$on the forum non

conveniens mot%on. The Co&rt e:$ress" dec"%nes to make %nd%n's as to act&a" "%ab%"%t at th%s sta'e

o the "%t%'at%on.

!"a%nt%s and deendant a'ree that %n 19?3 8n%on Carb%de entered %nto to a'reements %th 8C/

h%ch ere ent%t"ed ADes%'n Transer *'reementA and ATechn%ca" Ser2%ce *'reement.A *ccord%n' to

$"a%nt%s, 8n%on Carb%de, $&rs&ant to the Des%'n Transer *'reement, $ro2%ded a $rocess des%'n to

8C/, the Adeta%"%n' Fo h%chG as &ndertaken %n /nd%a.A ;emo %n #$$. at 1?


20/96

$hase. !"a%nt%s state that at "east n%ne 8n%on Carb%de techn%c%ans tra2e""ed to /nd%a to mon%tor the

$ro'ress o the $roect. 8n%on Carb%de a"so a""e'ed" ass%'ned a Ake en'%neer,A +ohn Co&2aras, to

ser2e as 8C/ Bho$a" $roect mana'er. r. Co&2aras a""e'ed" Aass&med res$ons%b%"%t or 2%rt&a""

e2er as$ect o the deta%"%n' o the $rocess des%'n,A and a$$ro2ed deta%" re$orts o Anot on" 8C/

b&t a"so %nde$endent contractors, %nc"&d%n' H&m$hres ) "as'o Cons&"tants !r%2ate td. and

!oer as %m%tedA o Bomba, /nd%a. ;emo %n #$$. at 1?=0


21/96

The nat&re o 8C/Ks deta%" des%'n ork %s d%sc&ssed %n the a%da2%t o >an%t . D&tta, ho has he"d

2ar%o&s $os%t%ons at 8C/ and 8C*!C. rom 19?3 thro&'h 19?6, r. D&tta as em$"oed as

enera" ana'er o the *'r%c&"t&ra" !rod&cts D%2%s%on o 8C/. ;D&tta *. at


22/96

r. D&tta e:$ress" states that the /C stora'e tank and mon%tor%n' %nstr&mentat%on ere abr%cated

or s&$$"%ed b to named /nd%an s&b=contractors. The 2ent 'as scr&bber %s a""e'ed to ha2e been

abr%cated %n the Bho$a" $"ant sho$. ;D&tta *. at 5


23/96

sma"" $ort%on. ;(oomer *. at 46&"es o C%2%" !roced&re, and th%s o$%n%on %s cond%t%oned &$on s&ch s&bm%ss%on, an records so&'ht

b $"a%nt%s m&st be made a2a%"ab"e to them %n /nd%a. The $r%2ate %nterest actor o re"at%2e ease o

access to so&rces o $roo bear%n' on "%ab%"%t a2ors d%sm%ssa" o the conso"%dated case. F0G The

/nd%an +59 o2ernment %s asserted to ha2e been %n2o"2ed %n saet, "%cens%n' and other matters

re"at%n' to "%ab%"%t. >ecords re"at%n' thereto are "ocated %n /nd%a, as are the records se%ed b the CB/.

*"tho&'h $"a%nt%s state that a"" s&ch records co&"d and o&"d be made a2a%"ab"e to th%s Co&rt, %t

o&"d be eas%er to re2%e them %n /nd%a. Transm%tta" and trans"at%on $rob"ems o&"d thereb be

a2o%ded.

. -!!%ss t" Wit'%ss%s.

Gilbert teaches a second %m$ortant cons%derat%on &nder the head%n' o $r%2ate %nterests, the

Aa2a%"ab%"%t o com$&"sor $rocess or attendance o %""%n', and the cost o obta%n%n' attendance o

&n%""%n', %tnesses.A Gilbert, 330 8.S. at 50, 6? S. Ct. at 43. *s d%sc&ssed %n deta%" abo2e, most

%tnesses hose test%mon o&"d re"ate to 7&est%ons o ca&sat%on and "%ab%"%t are %n /nd%a.


24/96

En'%neers rom 8C/ and H&m$hres and "as'o and other s&bcontractors, o hom there are

h&ndreds, are "ocated %n /nd%a. Sh%t em$"oees rom the $oss%b" ma"&nct%on%n' &n%ts, saet

mon%tor%n' $ersonne", those res$ons%b"e or tra%n%n', saet a&d%t%n', $roc&rement, com$"%ance %th

re'&"at%ons and other o$erat%ons m%'ht be re7&%red to test%. ore than "%ke", man o these

$otent%a" %tnesses do not s$eak En'"%sh, and o&"d re7&%re trans"ators. an o the %tnesses are

not $art%es to th%s "%t%'at%on. Thereore, as the Co&rt o *$$ea"s or the Second C%rc&%t has stated %n

the conte:t o a forum non conveniens mot%on@

/n act, the $"a%nt%sK cases on "%ab%"%t %"" de$end %n "ar'e meas&re &$on the kno"ed'e and

act%2%t%es o s&ch %tnesses as the em$"oees o Fcom$an%esG ho are not $art%es to th%s "%t%'at%on, b&t

ho d%rect" $art%c%$ated %n the e2ents h%ch 'a2e r%se to %t. The 8n%ted States D%str%ct Co&rt %n Ne

-ork, hoe2er, has no $oer to s&b$oena an o these %tnesses. /t %s &n"%ke" that man o&"d be

%""%n' to tra2e" to Ne -ork to test% and the cost, %n an e2ent, o&"d be $roh%b%t%2e" 'reat.

'it)&erald v. *e+aco, 51 .d 44, 451=5 ;d C%r. 19?5e7&ests or *dm%ss%on, E:h%b%t 55


25/96

"ar'e n&mber o /nd%an nat%ona"s to the 8n%ted States, as e"" as the need to trans"ate the%r test%mon

sho&"d the a$$ear, a"" s&$$ort the ar'&ment a2or%n' d%sm%ssa" o th%s act%on on forum non

conveniens 'ro&nds. The $r%2ate %nterest concerns re'ard%n' %tnesses em$has%e the "o'%c o

deendantKs $os%t%on. >e"at%2e" eer %tnesses res%de %n the 8n%ted States than %n /nd%a. *"most a""

o the %tnesses "ocated %n th%s co&ntr are em$"oees o deendant, and o&"d be s&bect to

com$&"sor $rocess %n /nd%a as a res&"t. Trans$ortat%on costs or the re"at%2e e o&"d not com$are

to the a"ternate costs o trans$ort%n' h&ndreds o /nd%an %tnesses. S%nce En'"%sh %s %de" s$oken %n

/nd%a, "ess trans"at%on o&"d be re7&%red or ore%'n %tnesses %n /nd%a than %n the con2erse s%t&at%on.

Sho&"d th%s case be tr%ed %n /nd%a, eer obstac"es to ca""%n' state and "oca" o%c%a"s as %tnesses or

$art%es o&"d ace the deendant. The Co&rt determ%nes that th%s $r%2ate %nterest actor e%'hs %n

a2or o d%sm%ssa".

C. /"ssi


26/96

cho%ce o a ore%'n or&m %s '%2en "ess than ma:%m&m deerence, the Co&rt determ%nes that d%sm%ssa"

%s a2ored at th%s $o%nt %n the %n7&%r. Gilbert 330 8.S. at 50, 6? S. Ct. at 43.

3. /#


27/96

o&"d ha2e to sa 2er "%tt"e re'ard%n' the e:erc%se o +&d'e etnerKs d%scret%on %n d%sm%ss%n' th%s

case.A"c$ertenlieb at 1164. /n a%rm%n' the r&"%n' or d%sm%ssa", the Co&rt o *$$ea"s asked the

rhetor%ca" 7&est%on@

/ "%t%'at%on %s %n a c"ear" %ncon2en%ent or&m, h sho&"d deendant and the co&rt be b&rdened %th

%ts cont%n&%n' there, % an a"ternat%2e or&m no e:%sts so that $"a%nt% %"" not be %tho&t a remedQ

"c$ertenlieb at 1163.

Th%s Co&rt has a"read determ%ned that beca&se o the "ocat%on o the $re$onderance o the

e2%dence %n /nd%a, and the d%%c&"t o trans$ort%n' doc&ments and %tnesses to th%s or&m, th%s

d%str%ct %s c"ear" an %ncon2en%ent or&m or the "%t%'at%on. *n a"ternat%2e or&m %s seen to e:%st %n /nd%a.

Th%s Co&rt ee"s that the anser to the "c$ertenlieb 7&est%on %s c"ear.

* d%str%ct &d'e %n th%s d%str%ct, %n Domin&o v. "tates !arine ines, 340 . S&$$. 11 ;S.D.N.-.19?<

e2a"&ated the adm%n%strat%2e concerns o the So&thern D%str%ct o Ne -ork, re"e2ant to th%s Co&rt

toda, a &"" o&rteen ears "ater. The Domin&o co&rt stated@

/t %s scarce" necessar to de"" on the act that th%s Co&rt %s the most hea2%" b&rdened edera"

D%str%ct Co&rt %n the co&ntr. The C%2%" Ca"endar 'ros more con'ested a"" the t%me. The $r%or%t no

$ro$er" '%2en to the d%s$os%t%on o cr%m%na" cases tends to %ncrease th%s con'est%on.

/ see no reason h th%s Co&rt, %th %ts hea2 b&rdens and res$ons%b%"%t%es, sho&"d be b&rdened %th

cases "%ke these h%ch, rom e2er $o%nt o 2%e, sho&"d be tr%ed %n the co&rts o the nat%on here a""

the re"e2ant e2ents occ&rred and hose c%t%ens are $r%mar%" %n2o"2ed. Certa%n", th%s d%str%ct and the

etro$o"%tan area %n h%ch %t %s s%t&ated ha2e no conce%2ab"e re"at%on to th%s "%t%'at%on e:ce$t or the

act that the deendant ha$$ens to be do%n' b&s%ness here.

Domin&o at 16.

The deendant %n th%s case, %n2o"2ed as %t a$$ears to ha2e been %n the $rocess des%'n $hase o the

$"antKs constr&ct%on, ma ha2e a s"%'ht" "ess ten&o&s connect%on to th%s or&m than a cor$orat%on

h%ch %s mere" do%n' b&s%ness here. Certa%n b&s%ness cond&cted %n Ne -ork, or %n cor$orate

head7&arters %n Danb&r, Connect%c&t, ma ha2e been d%rect" re"ated to de2e"o$ment or o$erat%on

o the 8C/ ac%"%t %n Bho$a". Hoe2er, a"most Aa"" the re"e2ant e2entsA "ead%n' to and o""o%n' rom

the acc%dent occ&rred %n /nd%a. /nd%an c%t%ens are $r%mar%" %n2o"2ed %n the case, both as %tnesses

http://law.justia.com/cases/federal/district-courts/FSupp/340/811/1445714/http://law.justia.com/cases/federal/district-courts/FSupp/340/811/1445714/http://law.justia.com/cases/federal/district-courts/FSupp/340/811/1445714/


28/96

and c"a%mants. The s&bstant%a" adm%n%strat%2e e%'ht o th%s case sho&"d be centered on a co&rt %th

the most s%'n%%cant contacts %th the e2ent. Th&s, a co&rt %n Bho$a", rather than Ne -ork, sho&"d

bear the "oad.

+62 /n add%t%on to the b&rden on the co&rt sstem, cont%n&at%on o th%s "%t%'at%on %n th%s or&m o&"dta: the t%me and reso&rces o c%t%ens d%rect". Tr%a" %n th%s case %"" no do&bt be "en'th. *n ass%'ned

&r o&"d be com$e""ed to s%t or man months o $roo. Beca&se o the "ar'e n&mber o /nd%an

"an'&a'e=s$eak%n' %tnesses, the &rors o&"d be re7&%red to end&re cont%n&a" trans"at%ons h%ch

o&"d do&b"e the "en'th o tr%a". The b&rden on the &rors themse"2es, and on the%r am%"%es,

em$"oers and comm&n%t%es o&"d be cons%derab"e. The need or trans"at%on o&"d be a2o%ded % tr%a"

ere to be he"d %n Bho$a".

C"ear", the adm%n%strat%2e costs o th%s "%t%'at%on are asto&nd%n' and s%'n%%cant. Des$%te %ts dee$

concern or the 2%ct%ms o the tra'ed, th%s Co&rt %s $ers&aded b a recent re"e2ant dec%s%on o the

Ne -ork State Co&rt o *$$ea"s. /n the o$%n%on %n #slamic Republic of #ran v. Pa$lavi, 6 N.-.d 4?4,

4? N.-.S.d 59?, 46? N.E.d 45 ;194


29/96


30/96

$rocess o A/nd%an%at%on,A restr%cted the amo&nt o ore%'n mater%a"s and ore%'n cons&"tantsK t%me

h%ch co&"d be contr%b&ted to the $roect, and mandated the &se o /nd%an mater%a"s and e:$erts

hene2er $oss%b"e. ;D&tta *. at 35


31/96

the Br%t%sh s&bs%d%ar, or %n&r%es a""e'ed" res&"t%n' rom %n'est%on o the oend%n' dr&' %n En'"and

and Scot"and. The d%str%ct co&rt, %n d%sm%ss%n' the case, stated that@

Th%s act%on %n2o"2es the saet o dr&'s man&act&red %n the 8n%ted %n'dom and so"d to %ts c%t%ens

$&rs&ant to "%censes %ss&ed b that 'o2ernment. The %nterest o the 8n%ted %n'dom %s

o2erhe"m%n'" a$$arent. Ne -ork, and #h%o Fthe 8n%ted States or&msG or that matter, ha2e a

m%n%ma" %nterest %n the saet o $rod&cts h%ch are man&act&red, re'&"ated and so"d abroad b

ore%'n ent%t%es, e2en tho&'h de2e"o$ment or test%n' occ&rred %n th%s co&ntr.

#n re Ric$ardson%!errell, #nc., 545 . S&$$. at 1135 ;ootnote om%tted


32/96

sho&"d not %m$ose %ts on 2%e o the saet, arn%n', and d&t o care re7&%red o dr&'s so"d %n the

8n%ted States &$on a ore%'n co&ntr hen those same dr&'s are so"d %n that co&ntr.

-arrison v. /yet$ aboratories, 510 . S&$$. 1, 4 ;E.D.!a.190


33/96

The Co&rt conc"&des that the $&b"%c %nterest o /nd%a %n th%s "%t%'at%on ar o&te%'hs the $&b"%c %nterest

o the 8n%ted States. Th%s "%t%'at%on oers a de2e"o$%n' nat%on the o$$ort&n%t to 2%nd%cate the

s&er%n' o %ts on $eo$"e %th%n the rameork o +66 a "e'%t%mate "e'a" sstem. Th%s %nterest %s o

$aramo&nt %m$ortance.F5G

C. % -**i!


34/96

/t %s d%%c&"t to %ma'%ne ho a 'reater tra'ed co&"d occ&r to a $eacet%me $o$&"at%on than the dead"

'as "eak %n Bho$a" on the n%'ht o December =3, 194. The s&r2%2ors o the dead 2%ct%ms, the

%n&red and others ho s&ered, or ma %n the &t&re s&er d&e to the d%saster, are ent%t"ed to

com$ensat%on. Th%s Co&rt %s %rm" con2%nced that the /nd%an "e'a" sstem %s %n a ar better $os%t%on

than the *mer%can co&rts to determ%ne the ca&se o the tra'%c e2ent and thereb %: "%ab%"%t. &rther,

the /nd%an co&rts ha2e 'reater access to a"" the %normat%on needed to arr%2e at the amo&nt o the

com$ensat%on to be aarded the 2%ct%ms.

The $resence %n /nd%a o the o2erhe"m%n' maor%t o the %tnesses and e2%dence, both

doc&mentar and rea", o&"d b %tse" s&''est that /nd%a %s the most con2en%ent or&m or th%s

conso"%dated case. The add%t%ona" $resence %n /nd%a o a"" b&t the "ess than hand&" o c"a%mants

&nderscores the con2en%ence o ho"d%n' tr%a" %n /nd%a. *"" o the $r%2ate %nterest actors descr%bed

%n Piper and Gilbert e%'h hea2%" toard +6 d%sm%ssa" o th%s case on the 'ro&nds o forum non

conveniens.

The $&b"%c %nterest actors set orth %n Piper and Gilbert a"so a2or d%sm%ssa". The adm%n%strat%2e

b&rden o th%s %mmense "%t%'at%on o&"d &na%r" ta: th%s or an *mer%can tr%b&na". The cost to

*mer%can ta:$aers o s&$$ort%n' the "%t%'at%on %n the 8n%ted States o&"d be e:cess%2e. (hen

another, ade7&ate and more con2en%ent or&m so c"ear" e:%sts, there %s no reason to $ress the

8n%ted States &d%c%ar to the "%m%ts o %ts ca$ac%t. No *mer%can %nterest %n the o&tcome o th%s

"%t%'at%on o&te%'hs the %nterest o /nd%a %n a$$"%n' /nd%an "a and /nd%an 2a"&es to the task o

reso"2%n' th%s case.

The Bho$a" $"ant as re'&"ated b /nd%an a'enc%es. The 8n%on o /nd%a has a 2er stron' %nterest %n

the atermath o the acc%dent h%ch aected %ts c%t%ens on %ts on so%". !erha$s /nd%an re'&"at%ons

ere %'nored or contra2ened. /nd%a ma %sh to determ%ne hether the re'&"at%ons %m$osed on the

chem%ca" %nd&str %th%n %ts bo&ndar%es ere s&%c%ent" str%n'ent. The /nd%an %nterests ar o&te%'h

the %nterests o c%t%ens o the 8n%ted States %n the "%t%'at%on.

!"a%nt%s, %nc"&d%n' the 8n%on o /nd%a, ha2e ar'&ed that the co&rts o /nd%a are not &$ to the task o

cond&ct%n' the Bho$a" "%t%'at%on. The assert that the /nd%an &d%c%ar has et to reach &"" mat&r%t

d&e to the restra%nts $"aced &$on %t b Br%t%sh co"on%a" r&"ers ho sha$ed the /nd%an "e'a" sstem to

meet the%r on ends. !"a%nt%s a""e'e that the /nd%an &st%ce sstem has not et cast o the b&rden o

co"on%a"%sm to meet the emer'%n' needs o a democrat%c $eo$"e.

The Co&rt th&s %nds %tse" aced %th a $arado:. /n the Co&rtKs 2%e, to reta%n the "%t%'at%on %n th%s

or&m, as $"a%nt%s re7&est, o&"d be et another e:am$"e o %m$er%a"%sm, another s%t&at%on %n h%ch


35/96

an estab"%shed so2ere%'n %n"%cted %ts r&"es, %ts standards and 2a"&es on a de2e"o$%n' nat%on. Th%s

Co&rt dec"%nes to $"a s&ch a ro"e. The 8n%on o /nd%a %s a or"d $oer %n 196, and %ts co&rts ha2e

the $ro2en ca$ac%t to mete o&t a%r and e7&a" &st%ce. To de$r%2e the /nd%an &d%c%ar o th%s

o$$ort&n%t to stand ta"" beore the or"d and to $ass &d'ment on beha" o %ts on $eo$"e o&"d be

to re2%2e a h%stor o s&bser2%ence and s&b&'at%on rom h%ch /nd%a has emer'ed. /nd%a and %ts

$eo$"e can and m&st 2%nd%cate the%r c"a%ms beore the %nde$endent and "e'%t%mate &d%c%ar created

there s%nce the /nde$endence o 194?.

Th%s Co&rt deers to the ade7&ac and ab%"%t o the co&rts o /nd%a. The%r %nterest %n the sad e2ents o

December =3, 194 at the 8C/ $"ant %n the C%t o Bho$a", State o adha !radesh, 8n%on o

/nd%a, %s not s&bect to 7&est%on or cha""en'e. The a2a%"ab%"%t o the $robat%2e, re"e2ant, mater%a" and

necessar e2%dence to /nd%an co&rts %s ob2%o&s and has been demonstrated %n th%s o$%n%on.

Thereore, the conso"%dated case %s d%sm%ssed on the 'ro&nds o forum non conveniens &nder the

o""o%n' cond%t%ons@

1. 8n%on Carb%de sha"" consent to s&bm%t to the &r%sd%ct%on o the co&rts o /nd%a, and sha"" cont%n&e

to a%2e deenses based &$on the stat&te o "%m%tat%ons

. 8n%on Carb%de sha"" a'ree to sat%s an &d'ment rendered a'a%nst %t b an /nd%an co&rt, and %

a$$"%cab"e, &$he"d b an a$$e""ate co&rt %n that co&ntr, here s&ch &d'ment and a%rmance

com$ort %th the m%n%ma" re7&%rements o d&e $rocess

3. 8n%on Carb%de sha"" be s&bect to d%sco2er &nder the mode" o the 8n%ted States edera" >&"es o

C%2%" !roced&re ater a$$ro$r%ate demand b $"a%nt%s.

S# #>DE>ED.


36/96

.R. N". 115+49 :'#8 24$ 1996

FIRS /HILI//INE INERN-ION-L -NK (F"7%8 /"d#!%s ' "; t% /ii**i'%s) 'dERC,RIO RI=ER-$ $et%t%oners,2s.

CO,R OF -//E-LS$ C-RLOS E:ERCIO$ i' s#&"e 45 o the >&"es o Co&rt, to set as%de the Dec%s%on $rom&"'ated+an&ar 14, 1994 o the res$ondent Co&rt o *$$ea"s1 %n C*=.> C No. 35?56 and the >eso"&t%on$rom&"'ated +&ne 14, 1994 den%n' the mot%on or recons%derat%on. The d%s$os%t%2e $ort%on o thesa%d Dec%s%on reads@

(HE>E#>E, the dec%s%on o the "oer co&rt %s #D//ED b the e"%m%nat%on o thedama'es aarded &nder $ara'ra$hs 3, 4 and 6 o %ts d%s$os%t%2e $ort%on and the red&ct%on o

the aard %n $ara'ra$h 5 thereo to !?5,000.00, to be assessed a'a%nst deendant bank. /na"" other as$ects, sa%d dec%s%on %s hereb */>ED.

*"" reerences to the or%'%na" $"a%nt%s %n the dec%s%on and %ts d%s$os%t%2e $ort%on are deemed,here%n and hereater, to "e'a"" reer to the $"a%nt%=a$$e""ee Car"os C. Eerc%to.

Costs a'a%nst a$$e""ant bank.

The d%s$os%t%2e $ort%on o the tr%a" co&rtKs dec%s%on dated +&" 10, 1991, on the other hand, %s aso""os@

(HE>E#>E, $rem%ses cons%dered, &d'ment %s hereb rendered %n a2or o the $"a%nt%s

and a'a%nst the deendants as o""os@

1. Dec"ar%n' the e:%stence o a $erected contract to b& and se"" o2er the s%: ;6< $arce"s o"and s%t&ated at Don +ose, Sta. >osa, a'&na %th an area o 101 hectares, more or "ess,co2ered b and embraced %n Transer Cert%%cates o T%t"e Nos. T=10693 to T=10693?,%nc"&s%2e, o the and >ecords o a'&na, beteen the $"a%nt%s as b&ers and the deendant!rod&cers Bank or an a'reed $r%ce o %2e and #ne Ha" %""%on ;!5,500,000.00< !esos

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. #rder%n' deendant !rod&cers Bank o the !h%"%$$%nes, &$on %na"%t o th%s dec%s%on andrece%$t rom the $"a%nt%s the amo&nt o !5.5 %""%on, to e:ec&te %n a2or o sa%d $"a%nt%s adeed o abso"&te sa"e o2er the aorement%oned s%: ;6< $arce"s o "and, and to %mmed%ate"de"%2er to the $"a%nt%s the onerKs co$%es o T.C.T. Nos. T=10693 to T= 10693?, %nc"&s%2e, or $&r$oses o re'%strat%on o the same deed and transer o the s%: ;6< t%t"es %n the names o the$"a%nt%s

3. #rder%n' the deendants, o%nt" and se2era"", to $a $"a%nt%s +ose *. +ano"o andDemetr%o Demetr%a the s&ms o !00,000.00 each %n mora" dama'es

4. #rder%n' the deendants, o%nt" and se2era"", to $a $"a%nt%s the s&m o !100,000.00 ase:em$"ar dama'es

5. #rder%n' the deendants, o%nt" and se2era"", to $a the $"a%nt%s the amo&nt o!400,000.00 or and b a o attorneKs ees

6. #rder%n' the deendants to $a the $"a%nt%s, o%nt" and se2era"", act&a" and moderatedama'es %n the amo&nt o !0,000.00

(%th costs a'a%nst the deendants.

*ter the $art%es %"ed the%r comment, re$", reo%nder, s&r=reo%nder and re$" to s&r=reo%nder, the$et%t%on as '%2en d&e co&rse %n a >eso"&t%on dated +an&ar 1, 1995. Thence, the $art%es %"ed the%r res$ect%2e memoranda and re$" memoranda. The %rst D%2%s%on transerred th%s case to the Th%rdD%2%s%on $er reso"&t%on dated #ctober 3, 1995. *ter care&"" de"%berat%n' on the aoresa%ds&bm%ss%ons, the Co&rt ass%'ned the case to the &nders%'ned ponente or the r%t%n' o th%sDec%s%on.

*$e Parties

!et%t%oner %rst !h%"%$$%ne /nternat%ona" Bank ;ormer" !rod&cers Bank o the !h%"%$$%nes $et%t%onerBank, or bre2%t< %s a bank%n' %nst%t&t%on or'an%ed and e:%st%n' &nder the "as o the >e$&b"%c o the!h%"%$$%nes. !et%t%oner erc&r%o >%2era ;$et%t%oner >%2era, or bre2%t< %s o "e'a" a'e and as, at a""t%mes mater%a" to th%s case, Head=ana'er o the !ro$ert ana'ement De$artment o the $et%t%oner Bank.

>es$ondent Car"os Eerc%to ;res$ondent Eerc%to, or bre2%t< %s o "e'a" a'e and %s the ass%'nee oor%'%na" $"a%nt%s=a$$e""ees Demetr%o Demetr%a and +ose +ano"o.

>es$ondent Co&rt o *$$ea"s %s the co&rt h%ch %ss&ed the Dec%s%on and >eso"&t%on so&'ht to be setas%de thro&'h th%s $et%t%on.

*$e 'acts

The acts o th%s case are s&mmar%ed %n the res$ondent Co&rtKs Dec%s%on3 as o""os@

;1< /n the co&rse o %ts bank%n' o$erat%ons, the deendant !rod&cer Bank o the !h%"%$$%nesac7&%red s%: $arce"s o "and %th a tota" area o 101 hectares "ocated at Don +ose, Sta. >ose,a'&na, and co2ered b Transer Cert%%cates o T%t"e Nos. T=10693 to T=10693?. The$ro$ert &sed to be oned b B-E /n2estment and De2e"o$ment Cor$orat%on h%ch hadthem mort'a'ed %th the bank as co""atera" or a "oan. The or%'%na" $"a%nt%s, Demetr%o

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Demetr%a and +ose #. +ano"o, anted to $&rchase the $ro$ert and th&s %n%t%atedne'ot%at%ons or that $&r$ose.

;< /n the ear" $art o *&'&st 19? sa%d $"a%nt%s, &$on the s&''est%on o B-E %n2estmentKs"e'a" co&nse", +ose aardo, met %th deendant erc&r%o >%2era, ana'er o the !ro$ertana'ement De$artment o the deendant bank. The meet%n' as he"d $&rs&ant to $"a%nt%sK

$"an to b& the $ro$ert ;TSN o +an. 16, 1990, $$. ?=10%2era, made a orma" $&rchase oer to the bank thro&'h a"etter dated *&'&st 30, 19? ;E:h. ABAE*

T=10693 113,50 s7. m.

T=106933 ?0,99 s7. m.

T=106934 5,46 s7. m.

T=106935 96,?6 s7. m.

T=106936 1?,114 s7. m.

T=10693? 41,41 s7. m.


39/96

oer %s or !ES#S@ TH>EE //#N /E H8ND>ED TH#8S*ND ;!3,500,000.00<!ES#S, %n cash.

%nd" contact me at Te"e$hone N&mber 91=1344.

;3< #n Se$tember 1, 19?, deendant >%2era made on beha" o the bank a orma" re$" b

"etter h%ch %s here&nder 7&oted ;E:h. ACA>EI ENTE>!>/SES14 Char%sma St., Doa *ndres //>osar%o, !as%', etro an%"a

*ttent%on@ 4O"5 O. 4A6OO

Dear S%r@

Thank o& or o&r "etter=oer to b& o&r s%: ;6< $arce"s o ac7&%red "ots at Sta. >osa, a'&na;ormer" oned b Bme /nd&str%a" Cor$.


40/96

;5< There as no re$" to +ano"oKs ore'o%n' "etter o Se$tember 1?, 19?. (hat took $"aceas a meet%n' on Se$tember , 19? beteen the $"a%nt%s and &%s Co, the Sen%or %ce=!res%dent o deendant bank. >%2era as e"" as aardo, the B-E "aer, attended themeet%n'. To das "ater, or on Se$tember 30, 19?, $"a%nt% +ano"o sent to the bank, thro&'h>%2era, the o""o%n' "etter ;E:h. AEA%2era

>e@ 101 Hectares o and%n Sta. >osa, a'&na

ent"emen@

!&rs&ant to o&r d%sc&ss%on "ast Se$tember 19?, e are $"eased to %norm o& that e

are acce$t%n' o&r oer or &s to $&rchase the $ro$ert at Sta. >osa, a'&na, ormer"oned b Bme /n2estment, or a tota" $r%ce o !ES#S@ /E //#N /E H8ND>EDTH#8S*ND ;!5,500,000.00%2era ;E:h%b%t AA< tendered$ament o the amo&nt o !5.5 m%""%on A$&rs&ant to ;o&r< $erected sa"e a'reement.ADeendants re&sed to rece%2e both the $ament and the "etter. /nstead, the $arce"s o "and%n2o"2ed %n the transact%on ere ad2ert%sed b the bank or sa"e to an %nterested b&er ;E:h,AHA and AH=1A


41/96

!aseo de >o:as, akat%etro an%"a

Dear r. >%2era@

Th%s %s %n connect%on %th the oer o o&r c"%ent, r. +ose #. +ano"o, to $&rchase o&r 101=

hectare "ot "ocated %n Sta. >osa, a'&na, and h%ch are co2ered b TCT No. T=10693 to10693?.

rom the doc&ments at hand, %t a$$ears that o&r co&nter=oer dated Se$tember 1, 19? oth%s same "ot %n the amo&nt o !5.5 m%""%on as acce$ted b o&r c"%ent thr& a "etter datedSe$tember 30, 19? and as rece%2ed b o& on #ctober 5, 19?.

/n 2%e o the abo2e c%rc&mstances, e be"%e2e that an a'reement has been $erected. (eere a"so %normed that des$%te re$eated o""o=&$ to cons&mmate the $&rchase, o& nore&se to honor o&r comm%tment. /nstead, o& ha2e ad2ert%sed or sa"e the same "ot toothers.

/n beha" o o&r c"%ent, thereore, e are mak%n' th%s orma" demand &$on o& tocons&mmate and e:ec&te the necessar act%onsMdoc&mentat%on %th%n three ;3< das romo&r rece%$t hereo. (e are read to rem%t the a'reed amo&nt o !5.5 m%""%on at o&r ad2%ce.#ther%se, e sha"" be constra%ned to %"e the necessar co&rt act%on to $rotect the %nterest o o&r c"%ent.

(e tr&st that o& %"" be '&%ded accord%n'".

;< Deendant bank, thro&'h deendant >%2era, ackno"ed'ed rece%$t o the ore'o%n' "etterand stated, %n %ts comm&n%cat%on o December , 19? ;E:h. A/AS B*N #THE !H//!!/NES!aseo de >o:as,akat%, etro an%"a

*ttn.@ *tt. N/D* ENC*>N*C/#NCentral 1an2 Conservator

(e are send%n' o& here%th, %n = beha" o o&r c"%ent, r. +#SE #. +*N##, BTC Check

No. 53? %n the amo&nt o !5.5 m%""%on as o&r a'reed $&rchase $r%ce o the 101=hectare "otco2ered b TCT Nos. 10693, 106933, 106934, 106935, 106936 and 10693? and re'%stered&nder !rod&cers Bank.

Th%s %s %n connect%on %th the $erected a'reement conse7&ent rom o&r oer o !5.5 %""%onas the $&rchase $r%ce o the sa%d "ots. !"ease %norm &s o the date o doc&mentat%on o thesa"e %mmed%ate".

%nd" ackno"ed'e rece%$t o o&r $ament.


42/96

;9< The ore'o%n' "etter dre no res$onse or more than o&r months. Then, on a 3, 19,$"a%nt%, thro&'h co&nse", made a %na" demand or com$"%ance b the bank %th %tsob"%'at%ons &nder the cons%dered $erected contract o sa"e ;E:h%b%t ANAecord, $. 656e'%ona" Tr%a" Co&rt o akat%, Branch 134, docketed as C%2%" Case No. 9=1606, a'a%nstEncarnac%on, Demetr%a and +ano"o Ato dec"are an $erected sa"e o the $ro$ert as &nenorceab"eand to sto$ Eerc%to rom enorc%n' or %m$"ement%n' the sa"eA4 /n h%s anser, +ano"o ar'&ed that theSecond Case as barred b litis pendentia b 2%rt&e o the case then $end%n' %n the Co&rt o

*$$ea"s. D&r%n' the $re=tr%a" conerence %n the Second Case, $"a%nt%s %"ed a ot%on or ea2e oCo&rt to D%sm%ss the Case (%tho&t !re&d%ce. A!r%2ate res$ondent o$$osed th%s mot%on on the'ro&nd, amon' others, that $"a%nt%Ks act o or&m sho$$%n' &st%%es the d%sm%ssa" o both cases, %th$re&d%ce.A5 !r%2ate res$ondent, %n h%s memorand&m, a2erred that th%s mot%on %s st%"" $end%n' %n theakat% >TC.

/n the%r !et%t%on6 and emorand&m?, $et%t%oners s&mmar%ed the%r $os%t%on as o""os@

/.

The Co&rt o *$$ea"s erred %n dec"ar%n' that a contract o sa"e as $erected beteenEerc%to ;%n s&bst%t&t%on o Demetr%a and +ano"o< and the bank.

//.

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The Co&rt o *$$ea"s erred %n dec"ar%n' the e:%stence o an enorceab"e contract o sa"ebeteen the $art%es.

///.

The Co&rt o *$$ea"s erred %n dec"ar%n' that the conser2ator does not ha2e the $oer to

o2err&"e or re2oke acts o $re2%o&s mana'ement.

/.

The %nd%n's and conc"&s%ons o the Co&rt o *$$ea"s do not conorm to the e2%dence onrecord.

#n the other hand, $et%t%oners $raed or d%sm%ssa" o the %nstant s&%t on the 'ro&nd that@

/.

!et%t%oners ha2e en'a'ed %n or&m sho$$%n'.

//.

The act&a" %nd%n's and conc"&s%ons o the Co&rt o *$$ea"s are s&$$orted b the e2%denceon record and ma no "on'er be 7&est%oned %n th%s case.

///.

The Co&rt o *$$ea"s correct" he"d that there as a $erected contract beteen Demetr%aand +ano"o ;s&bst%t&ted b res$ondent Eerc%to< and the bank.

/.

The Co&rt o *$$ea"s has correct" he"d that the conser2ator, a$art rom be%n' esto$$ed romre$&d%at%n' the a'enc and the contract, has no a&thor%t to re2oke the contract o sa"e.

*$e #ssues

rom the ore'o%n' $os%t%ons o the $art%es, the %ss&es %n th%s case ma be s&mmed &$ as o""os@

1< (as there or&m=sho$$%n' on the $art o $et%t%oner BankQ

< (as there a $erected contract o sa"e beteen the $art%esQ

3< *ss&m%n' there as, as the sa%d contract enorceab"e &nder the stat&te o ra&dsQ

4< D%d the bank conser2ator ha2e the &n%"atera" $oer to re$&d%ate the a&thor%t o the banko%cers andMor to re2oke the sa%d contractQ

5< D%d the res$ondent Co&rt comm%t an re2ers%b"e error %n %ts %nd%n's o actsQ

*$e 'irst #ssue7 /as *$ere 'orum%"$oppin&8

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44/96

/n order to $re2ent the 2e:at%ons o m&"t%$"e $et%t%ons and act%ons, the S&$reme Co&rt $rom&"'ated>e2%sed C%rc&"ar No. =91 re7&%r%n' that a $art Am&st cert% &nder oath . . . FthatG ;a< he has not;te'%ona" Tr%a" Co&rt, akat% Branch 134 %n the Second Case. /n act, the %ss&es %n the to casesare so %nter%ned that a &d'ement or reso"&t%on %n e%ther case %"" const%t&te res (udicata %n theother.A 10

#n the other hand, $et%t%oners e:$"a%n

11

that there %s no or&m=sho$$%n' beca&se@

1< /n the ear"%er or A%rst CaseA rom h%ch th%s $roceed%n' arose, the Bank as %m$"eadedas a defendant , hereas %n the ASecond CaseA ;ass&m%n' the Bank %s the rea" $art %n%nterest %n a der%2at%2e s&%t


45/96


46/96

and the %dent%t on the to $reced%n' $art%c&"ars %s s&ch that an &d'ment rendered %n theother act%on, %"", re'ard"ess o h%ch $art %s s&ccess&", amo&nt to res ad(udicata %n theact%on &nder cons%derat%on@ a"" the re7&%s%tes, %n %ne, o auter action pendant .

::: ::: :::

*s a"read obser2ed, there %s beteen the act%on at bar and >TC Case No. 6=36563, an%dent%t as re'ards $art%es, or %nterests re$resented, r%'hts asserted and re"%e so&'ht, as e""as bas%s thereo, to a de'ree s&%c%ent to '%2e r%se to the 'ro&nd or d%sm%ssa" knonas auter action pendant or lis pendens. That same %dent%t $&ts %nto o$erat%on the sanct%on o t%n d%sm%ssa"s &st ment%oned. The a$$"%cat%on o th%s sanct%on %"" $re2ent an &rther de"a%n the sett"ement o the contro2ers h%ch m%'ht ens&e rom attem$ts to seekrecons%derat%on o or to a$$ea" rom the #rder o the >e'%ona" Tr%a" Co&rt %n C%2%" Case No.6=36563 $rom&"'ated on +&" 15, 196, h%ch d%sm%ssed the $et%t%on &$on 'ro&nds h%cha$$ear $ers&as%2e.

Conse7&ent", here a "%t%'ant ;or one re$resent%n' the same %nterest or $erson< s&es the same$art a'a%nst hom another act%on or act%ons or the a""e'ed 2%o"at%on o the same r%'ht and the

enorcement o the same re"%e %sMare st%"" $end%n', the deense o litis pendencia %n one case %s bar tothe others and, a %na" &d'ment %n one o&"d const%t&te res (udicata and th&s o&"d ca&se thed%sm%ssa" o the rest. /n e%ther case, or&m sho$$%n' co&"d be c%ted b the other $art as a 'ro&nd toask or s&mmar d%sm%ssa" o the to 0 ;or more< com$"a%nts or $et%t%ons, and or %m$os%t%on o theother sanct%ons, h%ch are d%rect contem$t o co&rt, cr%m%na" $rosec&t%on, and d%sc%$"%nar act%ona'a%nst the err%n' "aer.

*$$"%n' the ore'o%n' $r%nc%$"es %n the case beore &s and com$ar%n' %t %th the Second Case, %t %sob2%o&s that there e:%st %dent%t o $art%es or %nterests re$resented, %dent%t o r%'hts or ca&ses and%dent%t o re"%es so&'ht.

er s%m$" stated, the or%'%na" com$"a%nt %n the co&rt a uo h%ch 'a2e r%se to the %nstant $et%t%onas %"ed b the b&er ;here%n $r%2ate res$ondent and h%s $redecessors=%n=%nterest< a'a%nst the se""er ;here%n $et%t%oners< to enorce the a""e'ed $erected sa"e o rea" estate. #n the other hand, thecom$"a%nt 1 %n the Second Case seeks to dec"are s&ch $&r$orted sa"e %n2o"2%n' the same rea"$ro$ert Aas &nenorceab"e as a'a%nst the BankA, h%ch %s the $et%t%oner here%n. /n other ords, %n theSecond Case, the maor%t stockho"ders, %n re$resentat%on o the Bank, are seek%n' to accom$"%shhat the Bank %tse" a%"ed to do %n the or%'%na" case %n the tr%a" co&rt. /n br%e, the obect%2e or there"%e be%n' so&'ht, tho&'h orded d%erent", %s the same, name", to enab"e the $et%t%oner Bank toesca$e rom the ob"%'at%on to se"" the $ro$ert to res$ondent. /n Dan2%""e ar%t%me, /nc. 2s.Comm%ss%on on *&d%t. , th%s Co&rt r&"ed that the %"%n' b a $art o to a$$arent" d%erent act%ons,b&t %th the same ob(ective,const%t&ted or&m sho$$%n'@

/n the attem$t to make the to act%ons a$$ear to be d%erent, $et%t%oner %m$"eaded d%erentres$ondents there%n !N#C %n the case beore the "oer co&rt and the C#* %n the case

beore th%s Co&rt and so&'ht hat seems to be d%erent re"%es. !et%t%oner asks th%s Co&rt toset as%de the 7&est%oned "etter=d%rect%2e o the C#* dated #ctober 10, 19 and to d%rectsa%d bod to a$$ro2e the emorand&m o *'reement entered %nto b and beteen the!N#C and $et%t%oner, h%"e %n the com$"a%nt beore the "oer co&rt $et%t%oner seeks to eno%nthe !N#C rom cond&ct%n' a reb%dd%n' and rom se""%n' to other $art%es the 2esse" ATMT

*ndres Bon%ac%oA, and or an e:tens%on o t%me or %t to com$" %th the $ara'ra$h 1 o thememorand&m o a'reement and dama'es. One can see t$at alt$ou&$ t$e relief prayed for int$e two :;< actions are ostensibly different, t$e ultimate ob(ective in bot$ actions is t$e same,

http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt20http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt21http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt22http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt22http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt22http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt20http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt21http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt22


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t$at is, approval of t$e sale of vessel in favor of petitioner and to overturn t$e letter%directiveof t$e COA of October =>, =?@@ disapprovin& t$e sale. ;em$has%s s&$$"%ed


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!et%t%oner a"so tr%ed to seek re&'e %n the cor$orate %ct%on that the $ersona"%t # the Bank %sse$arate and d%st%nct rom %ts shareho"ders. B&t the r&"%n's o th%s Co&rt are cons%stent@ A(hen the%ct%on %s &r'ed as a means o $er$etrat%n' a ra&d or an %""e'a" act or as a 2eh%c"e or the e2as%on oan e:%st%n' ob"%'at%on, the c%rc&m2ent%on o stat&tes, the ach%e2ement or $erect%on o a mono$o" or'enera"" the $er$etrat%on o kna2er or cr%me, the 2e%" %th h%ch the "a co2ers and %so"ates thecor$orat%on rom the members or stockho"ders ho com$ose %t %"" be "%ted to a""o or %ts

cons%derat%on mere" as an a''re'at%on o %nd%2%d&a"s.A5

/n add%t%on to the man cases 6 here the cor$orate %ct%on has been d%sre'arded, e no add the%nstant case, and dec"are here%th that the cor$orate 2e%" cannot be &sed to sh%e"d an other%seb"atant 2%o"at%on o the $roh%b%t%on a'a%nst or&m=sho$$%n'. Shareho"ders, hether s&%n' as themaor%t %n d%rect act%ons or as the m%nor%t %n a der%2at%2e s&%t, cannot be a""oed to tr%"e %th co&rt$rocesses, $art%c&"ar" here, as %n th%s case, the cor$orat%on %tse" has not been rem%ss %n 2%'oro&s"$rosec&t%n' or deend%n' cor$orate ca&ses and %n &s%n' and a$$"%n' remed%es a2a%"ab"e to %t. Tor&"e other%se o&"d be to enco&ra'e cor$orate "%t%'ants to &se the%r shareho"ders as ronts toc%rc&m2ent the str%n'ent r&"es a'a%nst or&m sho$$%n'.

%na"", $et%t%oner Bank ar'&ed that there cannot be an or&m sho$$%n', e2en

ass&m%n' ar&uendo that there %s %dent%t o $art%es, ca&ses o act%on and re"%es so&'ht, Abeca&se %t;the Bank< as the deendant %n the ;%rst< case h%"e %t as the $"a%nt% %n the other ;SecondCasees$ondent, on the other hand, re$"%ed that there %s a d%erence %n act&a" sett%n'beteen 0ictronics and the $resent s&%t. /n the ormer, as &nderscored %n the abo2e=7&oted Co&rtr&"%n', the deendants d%d not %"e anresponsive pleadin& %n the %rst case. /n other ords, the d%dnot make an den%a" or ra%se an deense or co&nter=c"a%m there%n /n the case beore &s hoe2er,$et%t%oners %"ed a res$ons%2e $"ead%n' to the com$"a%nt as a res&"t o h%ch, the %ss&es ere

o%ned.

/ndeed, b $ra%n' or a%rmat%2e re"%es and %nter$os%n' co&nterUc"a%ms %n the%r res$ons%2e$"ead%n's, the $et%t%oners became $"a%nt%s themse"2es %n the or%'%na" case, '%2%n' &nto themse"2esthe 2er remed%es the re$eated %n the Second Case.

8"t%mate", hat %s tr&" %m$ortant to cons%der %n determ%n%n' hether or&m=sho$$%n' e:%sts or not %sthe 2e:at%on ca&sed the co&rts and $art%es="%t%'ant b a $art ho asks d%erent co&rts andMoradm%n%strat%2e a'enc%es to r&"e on the same or re"ated ca&ses andMor to 'rant the same ors&bstant%a"" the same re"%es, %n the $rocess creat%n' the $oss%b%"%t o con"%ct%n' dec%s%ons be%n'rendered b the d%erent fora &$on the same %ss&e. /n th%s case, th%s %s e:act" the $rob"em@ adec%s%on reco'n%%n' the $erect%on and d%rect%n' the enorcement o the contract o sa"e %"" d%rect"con"%ct %th a $oss%b"e dec%s%on %n the Second Case barr%n' the $art%es ront enorc%n' or

http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt25http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt26http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt26http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt26http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt27http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt27http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt27http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt25http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt26http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt27


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%m$"ement%n' the sa%d sa"e. /ndeed, a %na" dec%s%on %n one o&"d const%t&te res (udicata %n theother .

The ore'o%n' conc"&s%on %nd%n' the e:%stence o or&m=sho$$%n' not%thstand%n', the on" sanct%on$oss%b"e no %s the d%sm%ssa" o both cases %th $re&d%ce, as the other sanct%ons cannot be %m$osedbeca&se $et%t%onersK $resent co&nse" entered the%r a$$earance on" d&r%n' the $roceed%n's %n th%s

Co&rt, and the !et%t%onKs E>//C*T/#NMCE>T//C*T/#N conta%ned s&%c%ent a""e'at%ons as to the$endenc o the Second Case to sho 'ood a%th %n obser2%n' C%rc&"ar =91. The aers ho %"edthe Second Case are not beore &s th&s the r&d%ments o d&e $rocess $re2ent &s rom motu

propio %m$os%n' d%sc%$"%nar meas&res a'a%nst them %n th%s Dec%s%on. Hoe2er, $et%t%onersthemse"2es ;and $art%c&"ar" Henr Co, et a".< as "%t%'ants are admon%shed to str%ct" o""o the r&"esa'a%nst or&m=sho$$%n' and not to tr%"e %th co&rt $roceed%n's and $rocesses The are arned thata re$et%t%on o the same %"" be dea"t %th more se2ere".

Ha2%n' sa%d that, "et %t be em$has%ed that th%s $et%t%on sho&"d be d%sm%ssed not mere" beca&se oor&m=sho$$%n' b&t a"so beca&se o the s&bstant%2e %ss&es ra%sed, as %"" be d%sc&ssed short".

*$e "econd #ssue7 /as *$e Contract Perfected8

The res$ondent Co&rt correct" treated the 7&est%on o hether or not there as, on the bas%s o theacts estab"%shed, a $erected contract o sa"e as the &"t%mate %ss&e. Ho"d%n' that a 2a"%d contract hasbeen estab"%shed, res$ondent Co&rt stated@

There %s no d%s$&te that the obect o the transact%on %s that $ro$ert oned b the deendantbank as ac7&%red assets cons%st%n' o s%: ;6< $arce"s o "and s$ec%%ca"" %dent%%ed &nderTranser Cert%%cates o T%t"e Nos. T=10693 to T=10693?. /t %s "%ke%se beond ca2%" that thebank %ntended to se"" the $ro$ert. *s test%%ed to b the BankKs De$&t Conser2ator, +oseEntereso, the bank as "ook%n' or b&ers o the $ro$ert. /t %s de%n%te that the $"a%nt%santed to $&rchase the $ro$ert and %t as $rec%se" or th%s $&r$ose that the met %thdeendant >%2era, ana'er o the !ro$ert ana'ement De$artment o the deendant bank,%n ear" *&'&st 19?. The $roced&re %n the sa"e o ac7&%red assets as e"" as the nat&re andsco$e o the a&thor%t o >%2era on the matter %s c"ear" de"%neated %n the test%mon o >%2erah%mse", h%ch test%mon as re"%ed &$on b both the bank and b >%2era %n the%r a$$ea"br%es. Th&s ;TSN o +&" 30, 1990. $$. 19=0


50/96

acce$t oers and to $resent the oer to the Comm%ttee beore h%ch the sa%d o%c%a" %sa&thor%ed to d%sc&ss %normat%on re"at%2e to $r%ce determ%nat%on. Necessar%", too, %t be%n'%nherent %n h%s a&thor%t, >%2era %s the o%cer rom hom o%c%a" %normat%on re'ard%n' the$r%ce, as determ%ned b the Comm%ttee and a$$ro2ed b the Conser2ator, can be had. *nd>%2era con%rmed h%s a&thor%t hen he ta"ked %th the $"a%nt% %n *&'&st 19?. The test%mono $"a%nt% Demetr%a %s c"ear on th%s $o%nt ;TSN o a 31,1990, $$. ?=%2era and the bankKs %nterna" $roced&re %n the matter o the sa"e o bankKsassets. *s ad2%sed b >%2era, the $"a%nt%s made a orma" oer b a "etter dated *&'&st 0,19? stat%n' that the o&"d b& at the $r%ce o !3.5 %""%on %n cash. The "etter as or the

attent%on o erc&r%o >%2era ho as tasked to con2e and acce$t s&ch oers. Cons%der%n'an as$ect o the o%c%a" d&t o >%2era as some sort o %ntermed%ar beteen the $"a%nt%s=b&ers %th the%r $ro$osed b&%n' $r%ce on one hand, and the bank Comm%ttee, theConser2ator and &"t%mate" the bank %tse" %th the set $r%ce on the other, and cons%der%n'&rther the d%sc&ss%on o $r%ce at the meet%n' o *&'&st res&"t%n' %n a orma" oer o !3.5%""%on %n cash, there can be no other "o'%ca" conc"&s%on than that hen, on Se$tember 1,19?, >%2era %normed $"a%nt%s b "etter that Athe bankKs co&nter=oer %s at !5.5 %""%on ormore than 101 hectares on "ot bas%s,A s&ch co&nter=oer $r%ce had been determ%ned b the!ast D&e Comm%ttee and a$$ro2ed b the Conser2ator ater >%2era had d&" $resented$"a%nt%sK oer or d%sc&ss%on b the Comm%ttee o s&ch matters as or%'%na" "oan o borroer,b%d $r%ce d&r%n' orec"os&re, tota" c"a%m o the bank, and market 2a"&e. Terse" $&t, &nder theestab"%shed acts, the $r%ce o !5.5 %""%on as, as c"ear" orded %n >%2eraKs "etter ;E:h. AEA


51/96

that ne'ot%at%ons on the $r%ce had started %n ear" *&'&st and the $"a%nt%s had a"readoered an amo&nt as $&rchase $r%ce, ha2%n' been made to &nderstand b >%2era, the o%c%a"%n char'e o the ne'ot%at%on, that the $r%ce %"" be s&bm%tted or a$$ro2a" b the bank and thatthe bankKs dec%s%on %"" be re"aed to $"a%nt%s. rom the acts, the o%c%a" bank $r%ce. *t anrate, the bank $"aced %ts o%c%a", >%2era, %n a $os%t%on o a&thor%t to acce$t oers to b& andne'ot%ate the sa"e b ha2%n' the oer o%c%a"" acted &$on b the bank. The bank cannot t&rn

aro&nd and "ater sa, as %t no does, that hat >%2era states as the bankKs act%on on thematter %s not %n act so. /t %s a am%"%ar doctr%ne, the doctr%ne o ostens%b"e a&thor%t, that % acor$orat%on kno%n'" $erm%ts one o %ts o%cers, or an other a'ent, to do acts %th%n thesco$e o an a$$arent a&thor%t, and th&s ho"ds h%m o&t to the $&b"%c as $ossess%n' $oer todo those acts, the cor$orat%on %"", as a'a%nst an one ho has %n 'ood a%th dea"t %th thecor$orat%on thro&'h s&ch a'ent, he esto$$ed rom den%n' h%s a&thor%t ;ranc%sco 2. S/S,? SC>* 5??, 53=54 !NB 2. Co&rt o *$$ea"s, 94 SC>* 35?, 369=3?0 !r&dent%a" Bank 2.Co&rt o *$$ea"s, .>. No. 10395?, +&ne 14, 1993%2era ;or Co< ma ha2e made %s &na&thor%ed. S%nce there as no co&nter=oer b the Bank,there as noth%n' or Eerc%to ;%n s&bst%t&t%on o Demetr%a and +ano"o< to acce$t.A 30 The d%s$&tedthe act&a" bas%s o the res$ondent Co&rtKs %nd%n's that there as an oer made b +ano"o or !3.5m%""%on, to h%ch the Bank co&nter=oered !5.5 m%""%on. (e ha2e $er&sed the e2%dence b&t cannot%nd a&"t %th the sa%d Co&rtKs %nd%n's o act. er%", %n a $et%t%on &nder >&"e 45 s&ch as th%s, errorso act % there be an = are, as a r&"e, not re2%eab"e. The mere act that res$ondent Co&rt ;and

the tr%a" co&rt as e""< chose to be"%e2e the e2%dence $resented b res$ondent more than that$resented b $et%t%oners %s not b %tse" a re2ers%b"e error. /n act, s&ch %nd%n's mer%t ser%o&scons%derat%on b th%s Co&rt, $art%c&"ar" here, as %n th%s case, sa%d co&rts care&"" and met%c&"o&s"d%sc&ssed the%r %nd%n's. Th%s %s bas%c.

Be that as %t ma, and in addition to the ore'o%n' d%s7&%s%t%ons b the Co&rt o *$$ea"s, "et &s re2%ethe 7&est%on o >%2eraKs a&thor%t to act and $et%t%onerKs a""e'at%ons that the !5.5 m%""%on co&nter=oer as e:t%n'&%shed b the !4.5 m%""%on re2%sed oer o +ano"o. Here, there are 7&est%ons o "a h%chco&"d be dran rom the act&a" %nd%n's o the res$ondent Co&rt. The a"so de"2e %nto thecontract&a" e"ements o consent and ca&se.

The a&thor%t o a cor$orate o%cer %n dea"%n' %th th%rd $ersons ma be act&a" or a$$arent. The

doctr%ne o Aa$$arent a&thor%tA, %th s$ec%a" reerence to banks, as "a%d o&t %n Prudential 1an2 vs.Court of Appeals31, here %t as he"d that@

Conormab", e ha2e dec"ared %n co&nt"ess dec%s%ons that the $r%nc%$a" %s "%ab"e orob"%'at%ons contracted b the a'ent. The a'entKs a$$arent re$resentat%on %e"ds to the$r%nc%$a"Ks tr&e re$resentat%on and the contract %s cons%dered as entered %nto beteen the$r%nc%$a" and the th%rd $erson ;citin& Nat%ona" ood *&thor%t 2s. /ntermed%ate *$$e""ateCo&rt, 14 SC>* 166


52/96

* bank %s "%ab"e or ron'&" acts o %ts o%cers done %n the %nterests o the bank or %nthe co&rse o dea"%n's o the o%cers %n the%r re$resentat%2e ca$ac%t b&t not or actso&ts%de the sca$e o the%r a&thor%t ;9 C.+.S., $. 41?%2era as Aat a"" t%mes mater%a" to th%s case,ana'er o the !ro$ert ana'ement De$artment o the BankA. B h%s on adm%ss%on,>%2era as a"read the $erson %n char'e o the BankKs ac7&%red assets ;TSN, *&'&st 6,1990, $$. =9%2era ;TSN, *$r%" 6, 1990,$$. 34=35


53/96

;h< /n %ts nes$a$er ad2ert%sements and anno&ncements, the Bank reerred to >%2era as theo%cer act%n' or the Bank %n re"at%on to $art%es %nterested %n b&%n' assets onedMac7&%red bthe Bank. /n act, >%2era as the o%cer ment%oned %n the BankKs ad2ert%sements oer%n' orsa"e the $ro$ert %n 7&est%on ;cf. E:hs. ASA and AS=1A%2eraKs a$$arent a&thor%t thro&'h doc&ments andtest%mon h%ch seek to estab"%sh >%2eraKs actual a&thor%t. These $%eces o e2%dence, hoe2er, are%nherent" eak as the cons%st o >%2eraKs se"=ser2%n' test%mon and 2ar%o&s %nter=o%cememoranda that $&r$ort to sho h%s limited actual aut$ority , o h%ch $r%2ate res$ondent cannot bechar'ed %th kno"ed'e. /n an e2ent, s%nce the %ss&e %s a$$arent a&thor%t, the e:%stence o h%ch %sborne o&t b the res$ondent Co&rtKs %nd%n's, the e2%dence o act&a" a&thor%t %s %mmater%a" %nsoar asthe "%ab%"%t o a cor$orat%on %s concerned 33.

!et%t%oners a"so ar'&ed that s%nce Demetr%a and +ano"o ere e:$er%enced "aers and the%r A"a%rmA had once acted or the Bank %n three cr%m%na" cases, the sho&"d be char'ed %th act&a"kno"ed'e o >%2eraKs "%m%ted a&thor%t. B&t the Co&rt o *$$ea"s %n %ts Dec%s%on ;$. 1< had a"readmade a act&a" %nd%n' that the b&ers had no not%ce o >%2eraKs act&a" a&thor%t $r%or to the sa"e. /nact, the Bank has not shon that the acted as %ts co&nse" %n res$ect to an ac7&%red assets on theother hand, res$ondent has $ro2en that Demetr%a and +ano"o mere" assoc%ated %th a "oosea''r&$at%on o "aers ;not a $roess%ona" $artnersh%$%2era Acon%rmed that the !5.5 m%""%on $r%ce has been $assed&$on b the Comm%ttee and co&"d no "on'er be "oered ;TSN o *$r%" ?, 1990, $$. 34=35


54/96

sa%d oer. *nd b 2%rt&e o the Se$tember 30, 19? "etter acce$t%n' th%srevived oer, there as ameet%n' o the m%nds, as the acce$tance %n sa%d "etter as abso"&te and &n7&a"%%ed.

(e note that the BankKs re$&d%at%on, thro&'h Conser2ator Encarnac%on, o >%2eraKs a&thor%t andact%on, $art%c&"ar" the "atterKs co&nter=oer o !5.5 m%""%on, as be%n' A&na&thor%ed and %""e'a"A cameon" on a 1, 19 or more than se2en ;?< months ater +ano"oK acce$tance. S&ch de"a, and the

absence o an c%rc&mstance h%ch m%'ht ha2e &st%%ab" $re2ented the Bank rom act%n' ear"%er,c"ear" character%es the re$&d%at%on as noth%n' more than a "ast=m%n&te attem$t on the BankKs $artto 'et o&t o a b%nd%n' contract&a" ob"%'at%on.

Taken to'ether, the act&a" %nd%n's o the res$ondent Co&rt $o%nt to an %m$"%ed adm%ss%on on the $arto the $et%t%oners that the r%tten oer made on Se$tember 1, 19? as carr%ed thro&'h d&r%n' themeet%n' o Se$tember , 19?. Th%s %s the conc"&s%on cons%stent %th h&man e:$er%ence, tr&th and'ood a%th.

/t a"so bears not%n' that th%s %ss&e o e:t%n'&%shment o the BankKs oer o !5.5 m%""%on as ra%sed or the %rst t%me on a$$ea" and sho&"d th&s be d%sre'arded.

Th%s Co&rt %n se2era" dec%s%ons has re$eated" adhered to the $r%nc%$"e that $o%nts o "a,theor%es, %ss&es o act and ar'&ments not ade7&ate" bro&'ht to the attent%on o the tr%a"co&rt need not be, and ord%nar%" %"" not be, cons%dered b a re2%e%n' co&rt, as the cannotbe ra%sed or the %rst t%me on a$$ea" ;Santos 2s. /*C, No. ?443, No2ember 14, 196, 145SC>* 59


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. . . # co&rse, the bankKs "etter o Se$tember 1, 19? on the o%c%a" $r%ce and the $"a%nt%sKacce$tance o the $r%ce on Se$tember 30, 19?, are not, %n themse"2es, orma" contracts osa"e. The are hoe2er c"ear embod%ments o the act that a contract o sa"e as $erectedbeteen the $art%es, s&ch contract be%n' b%nd%n' %n hate2er orm %t ma ha2e been entered%nto ;case c%tat%ons om%tted


56/96

(hat %s the res$onse o r. &%s CoQ.

* He sa%d he %"" a%t or the $os%t%on o *tt. Demetr%a, s%r.

FD%rect test%mon o *tt. +ose aardo, TSN, +an&ar 16, 1990, at $$. 1=1.G

(hat trans$%red d&r%n' that meet%n' beteen o& and r. &%s Co o the deendant BankQ

* (e ent stra%'ht to the $o%nt beca&se he be%n' a b&s $erson, / to"d h%m % the amo&nt o!5.5 m%""%on co&"d st%"" be red&ced and he sa%d that as a"read $assed &$on b thecomm%ttee. (hat the bank e:$ects h%ch as contrar to hat r. >%2era stated. *nd he to"dme that %s the %na" oer o the bank !5.5 m%""%on and e sho&"d %nd%cate o&r $os%t%on as soonas $oss%b"e.

(hat as o&r res$onse to the anser o r. &%s CoQ

* / sa%d that e are 'o%n' to '%2e h%m o&r anser %n a e das and he sa%d that as %t. *tt.aardo and / and r. erc&r%o F>%2eraG as %th &s at the t%me at h%s o%ce.

or the record, o&r Honor $"ease, %"" o& te"" th%s Co&rt ho as %th r. Co %n h%s #%ce%n !rod&cers Bank B&%"d%n' d&r%n' th%s meet%n'Q

* r. Co h%mse", r. >%2era, *tt. aardo and /.

B r. Co o& are reerr%n' toQ

* r. &%s Co.

*ter th%s meet%n' %th r. &%s Co, d%d o& and o&r $artner accede on ;sic < the co&nteroer b the bankQ

* -es, s%r, e d%d.Q To das thereater e sent o&r acce$tance to the bank h%ch oer eacce$ted, the oer o the bank h%ch %s !5.5 m%""%on.

FD%rect test%mon o *tt. Demetr%a, TSN, 6 *$r%" 1990, at $$. 34=36.G

*ccord%n' to *tt. Demetr%o Demetr%a, the amo&nt o !5.5 m%""%on as reached b theComm%ttee and %t %s not %th%n h%s $oer to red&ce th%s amo&nt. (hat can o& sa to thatstatement that the amo&nt o !5.5 m%""%on as reached b the Comm%tteeQ

* /t as not d%sc&ssed b the Comm%ttee b&t %t as d%sc&ssed %n%t%a"" b &%s Co and the'ro&$ o *tt. Demetr%o Demetr%a and *tt. !aardo ;sic < %n that Se$tember , 19? meet%n',s%r.

FD%rect test%mon o erc&r%o >%2era, TSN, 30 +&" 1990, $$. 14=15.G

*$e 'ourt$ #ssue@ !ay t$e Conservator Revo2et$e Perfected and 5nforceable Contract .


57/96

/t %s not d%s$&ted that the $et%t%oner Bank as &nder a conser2ator $"aced b the Centra" Bank o the!h%"%$$%nes d&r%n' the t%me that the ne'ot%at%on and $erect%on o the contract o sa"e took $"ace.!et%t%oners ener'et%ca"" contended that the conser2ator has the $oer to re2oke or o2err&"e act%onso the mana'ement or the board o d%rectors o a bank, &nder Sect%on =* o >e$&b"%c *ct No. 65;other%se knon as the Centra" Bank *ct< as o""os@

(hene2er, on the bas%s o a re$ort s&bm%tted b the a$$ro$r%ate s&$er2%s%n' or e:am%n%n'de$artment, the onetar Board %nds that a bank or a non=bank %nanc%a" %ntermed%ar$erorm%n' 7&as%=bank%n' &nct%ons %s %n a state o cont%n&%n' %nab%"%t or &n%""%n'ness toma%nta%n a state o "%7&%d%t deemed ade7&ate to $rotect the %nterest o de$os%tors andcred%tors, the onetar Board ma a$$o%nt a conser2ator to take char'e o the assets,"%ab%"%t%es, and the mana'ement o that %nst%t&t%on, co""ect a"" mon%es and debts d&e sa%d%nst%t&t%on and e:erc%se a"" $oers necessar to $reser2e the assets o the %nst%t&t%on,reor'an%e the mana'ement thereo, and restore %ts 2%ab%"%t. He sha"" ha2e the $oer too2err&"e or re2oke the act%ons o the $re2%o&s mana'ement and board o d%rectors o thebank or non=bank %nanc%a" %ntermed%ar $erorm%n' 7&as%=bank%n' &nct%ons, an $ro2%s%on o "a to the contrar not%thstand%n', and s&ch other $oers as the onetar Board sha""deem necessar.

/n the %rst $"ace, th%s %ss&e o the Conser2atorKs a""e'ed a&thor%t to re2oke or re$&d%ate the$erected contract o sa"e as ra%sed or the %rst t%me %n th%s !et%t%on as th%s as not "%t%'ated %nthe tr%a" co&rt or Co&rt o *$$ea"s. *s a"read stated ear"%er, %ss&es not ra%sed andMor 2ent%"ated %n thetr%a" co&rt, "et a"one %n the Co&rt o *$$ea"s, Acannot be ra%sed or the %rst t%me on a$$ea" as %t o&"dbe oens%2e to the bas%c r&"es o a%r $"a, &st%ce and d&e $rocess.A43

/n the second $"ace, there %s abso"&te" no e2%dence that the Conser2ator, at the t%me the contractas $erected, act&a"" re$&d%ated or o2err&"ed sa%d contract o sa"e. The BankKs act%n' conser2atorat the t%me, >odo"o >ome, ne2er obected to the sa"e o the $ro$ert to Demetr%a and +ano"o. (hat$et%t%oners are rea"" reerr%n' to %s the "etter o Conser2ator Encarnac%on, ho took o2er rom >omeater the sa"e as $erected on Se$tember 30, 19? ;*nne: , $et%t%on< h%ch &n%"atera"" re$&d%ated not the contract b&t the a&thor%t o >%2era to make a b%nd%n' oer and h%ch &nar'&ab"

came months ater the $erect%on o the contract. Sa%d "etter dated a 1, 19 %s re$rod&cedhere&nder@

a 1, 19

*tt. Noe C. IarateIarate Carandan' !er"as ) *ss.S&%te 33 >&%no B&%"d%n'

*a"a *2en&e, akat%, etro=an%"a

Dear *tt. Iarate@

Th%s $erta%ns to o&r "etter dated a 5, 19 on beha" o *tts. +ano"o and Demetr%are'ard%n' the s%: ;6< $arce"s o "and "ocated at Sta. >osa, a'&na.

(e den that !rod&cers Bank has e2er made a "e'a" co&nter=oer to an o o&r c"%ents nor$erected a Acontract to se"" and b&A %th an o them or the o""o%n' reasons.

http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt43http://www.lawphil.net/judjuris/juri1996/jan1996/gr_115849_1996.html#fnt43


58/96

/n the A/nter=#%ce emorand&mA dated *$r%" 5, 196 addressed to and a$$ro2ed b ormer *ct%n' Conser2ator r. *ndres /. >&st%a, !rod&cers Bank Sen%or ana'er !erecto .!asc&a deta%"ed the &nct%ons o !ro$ert ana'ement De$artment ;!D< sta and o%cers;*nne: *.


59/96

another or come to be cons%dered &na2orab"e to the Bank, %e"d%n' noth%n' to $erected contract&a"r%'hts nor 2ested %nterests o the th%rd $art%es ho had dea"t %th the Bank.

*$e 'ift$ #ssue7 /ere *$ere Reversible 5rrors of 'acts8

Bas%c %s the doctr%ne that %n $et%t%ons or re2%e &nder >&"e 45 o the >&"es o Co&rt, %nd%n's o act

b the Co&rt o *$$ea"s are not re2%eab"e b the S&$reme Co&rt. /n Andres vs. !anufacturers-anover *rust Corporation, 45, e he"d@

. . . The r&"e re'ard%n' 7&est%ons o act be%n' ra%sed %th th%s Co&rt %n a $et%t%onor certiorari &nder >&"e 45 o the >e2%sed >&"es o Co&rt has been stated %n >ema"ante 2s.T%be, .>. No. 59514, ebr&ar 5, 19, 15 SC>* 13, th&s@

The r&"e %n th%s &r%sd%ct%on %s that on" 7&est%ons o "a ma be ra%sed %n a $et%t%onor certiorari &nder >&"e 45 o the >e2%sed >&"es o Co&rt. AThe &r%sd%ct%on o the S&$remeCo&rt %n cases bro&'ht to %t rom the Co&rt o *$$ea"s %s "%m%ted to re2%e%n' and re2%s%n' theerrors o "a %m$&ted to %t, %ts %nd%n's o the act be%n' conc"&s%2e A FChan 2s. Co&rt o

*$$ea"s, .>. No. =?4, +&ne 30, 19?0, 33 SC>* ?3?, re%terat%n' a "on' "%ne o

dec%s%onsG. Th%s Co&rt has em$hat%ca"" dec"ared that A%t %s not the &nct%on o the S&$remeCo&rt to ana"e or e%'h s&ch e2%dence a"" o2er a'a%n, %ts &r%sd%ct%on be%n' "%m%ted tore2%e%n' errors o "a that m%'ht ha2e been comm%tted b the "oer co&rtA ;T%on'co 2. De "aerced, . >. No. =446, +&" 5, 19?4, 5 SC>* 9 Corona 2s. Co&rt o *$$ea"s, .>.No. =64, *$r%" , 193, 11 SC>* 65 Ban%7&ed 2s. Co&rt o *$$ea"s, . >. No. =4?531, ebr&ar 0, 194, 1? SC>* 596


60/96

/n the same 2e%n, the r&"%n' o th%s Co&rt %n the recent case o "out$ "ea "urety and #nsuranceCompany #nc . vs.-on. Court of Appeals, et al . 4 %s e7&a"" a$$"%cab"e to the $resent case@

(e see no 2a"%d reason to d%scard the act&a" conc"&s%ons o the a$$e""ate co&rt, . . . ;/ome, ater >%2era $resented the sameor d%sc&ss%onA and ;< Athe meet%n' %th Co as not to sca"e don the $r%ce and start ne'ot%at%onsane, b&t a meet%n' on the a"read determ%ned $r%ce o !5.5 m%""%onA Hence, citin& !h%"%$$%neNat%ona" Bank 2s. Co&rt o *$$ea"s 49, $et%t%oners are ask%n' &s to re2%e and re2erse s&ch act&a"%nd%n's.

The %rst $o%nt as c"ear" $assed &$on b the Co&rt o *$$ea"s 50, th&s@

There can be no other "o'%ca" conc"&s%on than that hen, on Se$tember 1, 19?, >%2era%normed $"a%nt%s b "etter that Athe bankKs co&nter=oer %s at !5.5 %""%on or more than 101hectares on "ot bas%s, As&ch co&nter=oer $r%ce had been determ%ned b the !ast D&eComm%ttee and a$$ro2ed b the Conser2ator ater >%2era had d&" $resented $"a%nt%sK oeror d%sc&ss%on b the Comm%ttee . . . Terse" $&t, &nder the estab"%shed act, the $r%ce o !5.5%""%on as, as c"ear" orded %n >%2eraKs "etter ;E:h. AEAodo"o>ome to test% on the%r beha", as he o&"d ha2e been %n the best $os%t%on to estab"%sh the%r thes%s.8nder the r&"es on e2%dence 51, s&ch s&$$ress%on '%2es r%se to the $res&m$t%on that h%s test%mono&"d ha2e been ad2erse, % $rod&ced.

The second $o%nt as s7&are" ra%sed %n the Co&rt o *$$ea"s, b&t $et%t%onersK e2%dence as deemed%ns&%c%ent b both the tr%a" co&rt and the res$ondent Co&rt, and %nstead, %t as res$ondentKss&bm%ss%ons that ere be"%e2ed and became bases o the conc"&s%ons arr%2ed at.

/n %ne, %t %s 7&%te e2%dent that the "e'a" conc"&s%ons arr%2ed at rom the %nd%n's o act b the "oerco&rts are 2a"%d and correct. B&t the $et%t%oners are no ask%n' th%s Co&rt to d%st&rb these %nd%n's to%t the conc"&s%on the are es$o&s%n', Th%s e cannot do.

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61/96

To be s&re, there are sett"ed e:ce$t%ons here the S&$reme Co&rt ma d%sre'ard %nd%n's o act bthe Co&rt o *$$ea"s 5. (e ha2e st&d%ed both the records and the C* Dec%s%on and e %nd no s&che:ce$t%ons %n th%s case. #n the contrar, the %nd%n's o the sa%d Co&rt are s&$$orted b a$re$onderance o com$etent and cred%b"e e2%dence. The %nerences and conc"&s%ons are seasonab"based on e2%dence d&" %dent%%ed %n the Dec%s%on. /ndeed, the a$$e""ate co&rt $at%ent" tra2ersed andd%ssected the %ss&es $resented beore %t, "end%n' cred%b%"%t and de$endab%"%t to %ts %nd%n's. The best

that can be sa%d %n a2or o $et%t%oners on th%s $o%nt %s that the act&a" %nd%n's o res$ondent Co&rtd%d not corres$ond to $et%t%onersK c"a%ms, b&t ere c"oser to the e2%dence as $resented %n the tr%a"co&rt b $r%2ate res$ondent. B&t th%s a"one %s no reason to re2erse or %'nore s&ch act&a" %nd%n's,$art%c&"ar" here, as %n th%s case, the tr%a" co&rt and the a$$e""ate co&rt ere %n common a'reementthereon. /ndeed, conc"&s%ons o act o a tr%a" &d'e as a%rmed b the Co&rt o *$$ea"s areconc"&s%2e &$on th%s Co&rt, absent an ser%o&s ab&se or e2%dent "ack o bas%s or ca$r%c%o&sness oan k%nd, beca&se the tr%a" co&rt %s %n a better $os%t%on to obser2e the demeanor o the %tnesses andthe%r co&rtroom manner as e"" as to e:am%ne the rea" e2%dence

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