Roxas v. Marcos

The defendant-appellant/eross-appellee Imelda Marcos (Imelda), in her alleged capacity as personal representative of the Estate (the Marcos Estate) of former Philippine President Ferdinand E. Marcos (Ferdinand), appeals from that portion of the amended judgment of the first circuit court entered in favor of the plaintiffs-appellees/cross-appel-lants the Estate of Rogelio (aka Roger) Domingo Roxas (the Roxas Estate) and the Golden Budha Corporation (GBC) (collectively, the plaintiffs-appellees) and against the Marcos Estate. The plaintiffs-appellees cross-appeal from: (1) that portion of the amended judgment (a) entered in favor of Imelda, in her individual capacity, and against the plaintiffs-appellees and (b) ordering the Marcos Estate to pay damages for conversion in the amount of $22,001,405,000.00; (2) the circuit court’s order granting in part and denying in part the plaintiffs-appellees’ motion for an award of prejudgment interest; and (3) the circuit court’s order granting in part and denying in part the plaintiffs-appellees’ motion to alter the judgment.

Imelda argues that the circuit court erred in: (1) amending the judgment to substitute Imelda as the personal representative of the Marcos Estate and entering judgment against her in that capacity; (2) denying Imelda’s motions for directed verdict and judgment notwithstanding the verdict, argued on the grounds that (a) the Roxas Estate’s claims against the Marcos Estate were barred by (i) the statute of limitations, (ii) the “act of state” doctrine, (iii) the “head of state” doctrine, and (iv) lack of personal jurisdiction, and (b) there was insufficient evidence to support the Roxas Estate’s claims for (i) conversion, (ii) false imprisonment, and (iii) damages; (3) failing to give preclusive effect to the opinion of a Philippines trial court regarding the authenticity of the “golden” buddha; and (4) admitting hearsay evidence under the “co-conspirators exception” of Hawai'i Rules of Evidence (HRE) Rule 803(a)(2)(C) (1993). 1

Imelda’s points of error (2)(a)(i), (2)(a)(ii), (2)(a)(iii), (2)(a)(iv), (2)(b)(i), (2)(b)(ii), (3), and (4) are without merit. With regard to her first point of error, we hold that Imelda’s purported “substitution” as “personal representative” of the Marcos Estate was ineffective to bind the Marcos Estate but that her conduct during these proceedings judicially estops her from denying personal liability to the extent of her interest, as an heir, in the Marcos Estate. We further hold that Imelda is correct that the evidence, adduced at trial, of the value of the thousands of gold bars allegedly contained in unopened boxes dis *100 covered by Roxas and converted by Ferdinand was too speculative to support an award of damages. Accordingly, we reverse that portion of the circuit court’s amended judgment concerning damages for conversion.

In their cross-appeal, the plaintiffs-appel-lees argue that the circuit court erred in: (1) ruling, as a matter of law, that conversion of property is a condition precedent to the imposition of a constructive trust and the commission of a fraudulent conveyance with respect to the property; (2) instructing the jury that the proper measure of damages for the conversion of the gold bars and the golden buddha was the value of the bars at the time of conversion rather than the highest value of the gold between the time of the conversion and the time of trial; and (3) failing to award prejudgment interest to the Roxas Estate and awarding inadequate prejudgment interest to GBC.

With regard to the plaintiffs-appellees’ first point of error, we agree that conversion is not, pursuant to Philippine law, a condition precedent to liability based on a theory of constructive trust and that the circuit court erred in so ruling. Accordingly, we vacate the portion of the amended judgment entered in Imelda’s favor on GBC’s claim based on constructive trust and remand for further proceedings before the circuit court sitting in equity. On the other hand, we hold that the circuit court correctly ruled that the jury’s verdict in this case precluded a finding of liability against Imeldá for fraudulent conveyances.

With regard to the plaintiffs-appellees’ second point of error, we hold that the circuit court erred in its instructions regarding the value to be assigned to the converted property, although we adopt a rule different than that advocated by the plaintiffs-appellees. Accordingly, we remand for a new trial on the limited question of the proper valuation of the converted property.

Finally, we hold that the circuit court abused its discretion in failing to award prejudgment interest to GBC with respect to the damages resulting from the conversion of Roxas’s property. Therefore, we remand the matter for the entry of an award of prejudgment interest in GBC’s favor with respect to the converted property.

I. BACKGROUND

A. Factual Background 2

1. Discovery of the treasure

Roxas worked as a locksmith in Baguio City, the Philippines. He was also an *101 amateur coin collector and treasure hunter. In 1961, Roxas met a man named Fuchugami in Baguio City, who claimed that his father had been in the Japanese army and had drawn a map identifying the location of the legendary “Yamashita Treasure.” The treasure purportedly consisted of booty, which had been plundered from various Southeast Asian countries, during World War II, by Japanese troops under the command of General Tomoyuki Yamashita and which was allegedly buried in the Philippines during the final battle for the islands in order to keep it out of the hands of the Americans.

At around the same time, Roxas met Euse-bio Ocubo, who claimed to have served as General Yamashita’s interpreter during World War II. Ocubo advised Roxas that, during the war, he had been taken to some tunnels controlled by General Yamashita, in order to retrieve silver to pay for food for the Japanese troops. There, he observed boxes of various sizes that contained gold and silver. Shortly thereafter, he also observed a golden buddha statue, which was kept at a convent near the tunnels.

Armed with Fuchugami’s description of his father’s maps and Oeubo’s representations, Roxas organized a group of partners and laborers to search for the treasure and obtained a permit for the purpose from Judge Pio Marcos, a relative of Ferdinand. Judge Marcos informed Roxas that, in accordance with Philippine law, a thirty-percent share of any discovered treasure would have to be paid to the government.

Sometime in 1970, Roxas’s group began digging on state lands near the Baguio General Hospital. After approximately seven months of searching and digging “24 hours a day,” the group broke into a system of underground tunnels.

Inside the tunnels, the group found wiring, radios, bayonets, rifles, and a human skeleton wearing a Japanese army uniform. After several weeks spent digging and exploring within the tunnels, Roxas’s group discovered a ten-foot thick concrete enclosure in the floor of the tunnel. On January 24,1971, the group broke through the enclosure. Inside, Roxas discovered a gold-colored buddha statue, which he estimated to be about three feet in height. The statue was extremely heavy; it required ten men to transport it to the surface using a chain block hoist, ropes, and rolling logs. Although he never weighed the statue, Roxas estimated its weight to be 1,000 kilograms, or one metric ton. Roxas directed his laborers to transport the statue to his home and place it in a closet.

Roxas also found a large pile of boxes underneath the concrete enclosure, approximately fifty feet from where the buddha statue had been discovered. He returned the next day and opened one small box, which contained twenty-four one-inch by two- and-one-half-inch bars of gold. Roxas estimated that the boxes were, on average, approximately the size of a case of beer and that they were stacked five or six feet high, over an area six feet wide and thirty feet long. Roxas did not open any of the other boxes.

Several weeks later, Roxas returned to blast the tunnel closed, planning to sell the buddha statue in order to obtain funds for an operation to remove the remaining treasure. Before blasting the tunnel closed, Roxas removed the twenty-four bars of gold, as well as some samurai swords, bayonets, and other artifacts. Roxas twice attempted to report his find to Judge Marcos, but was unsuccessful in contacting him.

During the following weeks, Roxas sold seven of the gold bars and sought a buyer for the golden buddha. Roxas testified that Kenneth Cheatham, the representative of one prospective buyer, drilled a small hole under the arm of the buddha and assayed the metal. The test revealed the statue to be solid twenty-two carat gold. 3 Roxas also tes *102 tified that a second prospective buyer, Luis Mendoza, also tested the metal of the statue, using nitric acid, and concluded that it was “more than 20 carats.”

On April 1, 1971, Roxas showed the bud-dha to a third prospective buyer, Joe Oihara, who was accompanied by another individual, Romeo Amansec. Oihara told Roxas that he was staying at the home of Ferdinand’s mother, Josefa Edralin Marcos. Oihara examined the buddha at length, performed another assay, and also closely scrutinized the designs on the statue. He indicated an interest in buying the buddha, promising to return in several days with a partial payment of one million pesos. Rendered suspicious by Oihara’s long scrutiny of the buddha, Roxas undertook his own examination and discovered that the head was removable. Inside, he found “more than two hand[s]ful” of what he surmised to be uncut diamonds. He placed the diamonds in his closet near the buddha and replaced the head.

2. The raid on Roxas’s house

On April 5, 1971, at 2:30 a.m., men purporting to be from the Criminal Investigation Service (CIS) and the National Bureau of Investigation (NBI), two Philippine national security agencies, knocked on Roxas’s door, claiming to have a search warrant. When Roxas failed to respond, the men broke two of Roxas’s front windows and pointed the barrels of their rifles inside. They informed Roxas that if he did not open the door within three minutes he would be shot.

Roxas opened the door, and eight men wearing military uniforms entered the house, accompanied by Oihara. They briefly displayed a document that they claimed was a search warrant. Before they snatched it away, Roxas was able to determine that it contained language regarding a “violation of [a] Central Bank regulation and illegal possession of firearms” and that it was signed by Judge Marcos. The men beat Roxas’s brother with their rifles and ordered Roxas’s family and his two bodyguards to lie down on the floor. When they left, they took the buddha, the diamonds, the remaining seventeen bars of gold, the samurai swords, a piggy bank belonging to Roxas’s children, and his wife’s coin collection.

Roxas reported the raid to the media and the local police. Subsequently, he went to Judge Marcos’s home. Roxas asked Judge Marcos why he had signed the search warrant. Judge Marcos responded that he had had no choice because “the principe” (“the prince”) had ordered the confiscation. When Roxas asked who “the principe” was, Judge Marcos responded that it was Ferdinand. Judge Marcos also advised Roxas that it was Oihara’s companion, Amansec, who had initially applied for the search warrant, claiming to have seen a gun in Roxas’s house. Judge Marcos appeared angry that Roxas had reported the case to the police and the media and stated that, as a result, the CIS and the NBI would likely kill Roxas. Roxas interpreted Judge Marcos’s remarks as a threat; nevertheless, on April 7, 1971, Roxas returned to the police station and signed a complaint.

Roxas and his family traveled to Caban-tuan City to enlist the aid of Provincial Governor Joson, who provided Roxas with four bodyguards. Roxas then went into hiding in Cabantuan City. Soon thereafter, on April 19, 1971, the military deposited a buddha statue with the City Court in Baguio City.

While he was in Cabantuan City, Roxas was approached by Rosario Uy and Anita Igna. They offered Roxas three million pesos to publicly affirm that the buddha statue held by the court was the same one that he had found. They also told him that they represented Ferdinand’s mother. Roxas refused the offer. Later, Uy reached him by telephone and renewed the offer, assuring Roxas that he need not be afraid to accept because Ferdinand would be the one paying him. Roxas again refused.

Roxas’s story began to appear regularly in the newspapers, radio, and television and to attract the attention of opposition politicians. Roxas met with a number of politicians, as well as with Philippine Secretary of Justice Vicente Abad Santos. Roxas told the Secretary his story, and the Secretary promised to guarantee Roxas’s safety for a trip to Baguio City to identify the buddha in the City Court.

*103 On April 29, 1971, Roxas traveled to the courthouse in Baguio City, accompanied by his bodyguards, two prosecutors from the Justice Department, a lawyer whom Roxas had hired, and a number of reporters and cameramen. Upon examination of the statue, Roxas concluded that it was not the same buddha that he had discovered because: (1) its color was different; (2) it had different facial features; (3) the head was not detachable; and (4) there was no hole under the arm where the original buddha had been drilled. On camera, Roxas announced his conclusion to those present. Roxas then brought the group to his house, where he showed them the damage caused by the raiding party and the closet where he had stored the buddha. Roxas later received an invitation to testify before the Philippine senate about the events; he did so on May 4,1971.

3. Arrest and torture

On May 18, 1971, Roxas was arrested in Cabantuan City by three men in civilian clothing. Roxas testified that the men told him “to go with them to make a negotiation with the President.” They also reassured him, “Don’t be afraid. We are under Mala-canang[ 4 ] — you know, we are under Malacan-ang agent. We can make a negotiation to the President, and nothing more.” The men took him to the home of Colonel Poneiano Gonzales.

There, an individual identified as Colonel Olivas punched Roxas in the stomach five times. When Roxas asked him why he was being beaten, Colonel Olivas responded, “You’re mentioning the name of the Presi-dente.]” One of the men then said, ‘We must report to the President that Rogelio Roxas is in our custody.” Colonel Olivas placed a telephone call, during which he appeared to Roxas to be speaking to Ferdinand, because he addressed the other party as “Mr. President.”

Subsequently, Roxas was taken to the constabulary headquarters in San Fernando, Pampanga. Once there, a number of soldiers led him to a dark room, where he was shown a picture of his wife and children and told that he must cooperate if he wanted to see them again. The soldiers ordered Roxas to “pinpoint those senators, that they pay me to implicate the name of the president.” Roxas refused to sign such a statement, and the soldiers responded by shocking him with wires attached to a large battery. The soldiers also interrogated Roxas about the location of the remaining treasure; however, he refused to divulge this information. The soldiers continued to shock him for several hours and, on one occasion, burned him with cigarettes.

Roxas was then taken to the residence of a judge, where he was directed to sign an affidavit. However, because of the torture he had endured, he was unable to clasp his hand around the pen, and, therefore, could not sign. The soldiers then transported Rox-as to a hotel in Angeles City. There, he was questioned again about the location of the treasure. When he refused to respond, he was beaten with a rubber mallet until he passed out. After the beatings, he noticed a great deal of damage to his right eye and ear, neither of which ever fully healed.

Roxas was kept in a room at the hotel for two weeks, during which time he was repeatedly ordered to sign yet another affidavit. This affidavit averred that the raid in his house had been performed “in a peaceful manner” and that the members of the raiding party had possessed no automatic weapons as had been reported in the press. When Roxas finally signed the affidavit, he was brought back to the city court in Baguio City and ordered to point at the buddha statue while being photographed and to identify gold bars as those taken from his home.

That night, Roxas picked the lock on the window of his room and escaped. After finding refuge at his sister’s home, Roxas contacted a senator and was again asked to testify before the senate, which he did on June 30, 1971. In his deposition in the instant case, Roxas testified that, during the June 30, 1971 hearing, he told the senators about being tortured. 5

*104 After the senate hearing, Roxas returned to Baguio City. Once there, he received a letter from Cesar Dumlao, a finance officer at the Malacanang, requesting a meeting on behalf of Ferdinand. Roxas met with Dum-lao and was shown a letter, which indicated that Ferdinand was offering to pay him five million pesos. 6 Roxas was instructed to return the next day; however, he did not report back because he became frightened.

One week after his return to Baguio City, Roxas was arrested for failing to appear at a hearing on an illegal weapons charge that had been pending against him since January 28, 1971. He was brought before a judge, who ordered him incarcerated as a result of his default.

On August 21, 1971, Senator Osmena sent an attorney to bail Roxas out of jail. Roxas traveled with the attorney to Manila to meet with Senator Osmena. Senator Osmena asked Roxas to speak at a political rally that evening. Roxas agreed, but he was unable to speak because the rally was bombed before he could start. Roxas ran away and went into hiding for almost one year.

When Roxas finally returned to his Baguio City home in July 1972, he was immediately arrested by two men, who represented to him that they were from the CIS. These men took Roxas to a naval base in the province of Zambales, where he was confined in the stockade. While there, Roxas was questioned by Provincial Commander Rodolfo Pa-talinghod about his discovery of the golden buddha.

On September 21, 1972, Ferdinand declared martial law in the Philippines; the order remained in effect until 1983. After the declaration, General Fabian Ver visited Roxas in his cell. General Ver admitted that he had been among the raiding party at Roxas’s house. He also told Roxas that there had been “an order to kill [Roxas] by the military,” but that the order had been canceled when it was discovered that Roxas was a member of the Church of Christ. He advised Roxas to keep quiet about his case, in light of the fact that martial law had been declared.

In January 1973, Roxas was transferred to a prison camp in Baguio City and tried on the charges of possession of an illegal firearm and unlawfully firing a revolver into the air. He was convicted of both counts by the Third Branch of the City Court of Baguio and sentenced, in connection with the first charge, to an “indeterminate penalty of imprisonment ranging from One (1) year and One (1) day as minimum to Four (4) years as maximum” and, in connection with the second, to a fine. Judgment was entered on January 31, 1973. During his incarceration, Roxas was beaten and questioned about the location of the treasure on two occasions by a man known as Colonel Gemoto — who identified himself as a member of the “Task Force Restoration” — accompanied by representatives of the CIS.

4. Military excavations

Roxas was released from prison on November 19,1974. When he arrived home the next day, he noticed soldiers standing outside tents near the Baguio General Hospital. Sometime in December 1974, some soldiers visited Roxas in his shop and told him that they were members of the Task Force Restoration, which was conducting excavations behind the hospital. They listed their address in Roxas’s logbook (which was never produced at trial) as Malacanang Palace. The soldiers asked him to come with them to help with the excavation; he refused. Roxas passed by the site in 1976 and saw that the excavations were still ongoing. In October 1976, Roxas and his family moved to Visayan City, where they stayed for the next ten years without further incident relating to the Yamashita treasure.

Juan Quijon (Juan) and his son, Romulo Quijon (Romulo), corroborated Roxas’s testimony regarding the excavations. Juan had *105 worked as a nursing attendant at Baguio General Hospital from 1945 to 1988. He noticed a number of soldiers involved in excavation behind the hospital between 1974 and 1975. Over a one-week period, Juan observed men carrying large wooden boxes out of a tunnel and placing them in trucks. Each box was carried by at least four — and sometimes six — men. The soldiers’ uniforms bore the initials “PSC,” and the trucks had the letters “PMA” painted on them. Juan also observed men removing some steel boxes with the aid of a winch. The soldiers left in August 1975.

Romulo testified that he worked as a cook for the soldiers performing excavations behind the hospital in 1974. Romulo testified that the “PSC” on the soldiers’ uniforms stood for “Presidential Security Command,” and the “PMA” painted on the trucks stood for “Philippine Military Academy.” The soldiers employed civilians to perform most of the digging. Romulo saw these civilians pushing and pulling boxes out of a hole and loading them into trucks. The boxes appeared to be old and in poor condition. Some fell apart while being carried, and gold-colored bars fell out onto the ground. Rom-ulo observed approximately ten boxes per day being loaded into trucks over a period of one year. He testified that the soldiers were “very strict” about keeping the public out of the area and that armed guards were posted at the trucks during the loading.

5. Laundering and sale of the gold

Robert Curtis, an American owner of a mining and refining business in Sparks, Nevada, testified that, in late 1974, he received a number of telephone calls from Norman Kirst, an associate of Ferdinand, inviting him to travel to the Philippines to meet the president. Kirst stated that Ferdinand wanted Curtis’s company to resmelt some gold bars and change the “hallmarks.” 7 Ferdinand also wanted Curtis to change the chemical composition of the gold while resmelting it so that its origin would not be identifiable. Curtis initially refused the invitation, but finally relented and traveled to the Philippines to meet with Ferdinand.

When he arrived, Curtis met with a number of Ferdinand’s aides and generals, including General Ver. He also met with Colonel Lachica, who was “Imelda Marcos’ personal security and went with her wherever she went.” Colonel Lachica took part ■ in the conversations about resmelting and “rehallmarking and purifying the gold[.]” Finally, after approximately ten days, he met with Ferdinand, Olof Jonsson (another American, see infra), General Ver, and Kirst.

Ferdinand told Curtis that he had recovered an enormous amount of gold from the Yamashita treasure, which he had found at various sites, and that he needed help because the “International World Court had ... passed a ruling that any ... World War II treasures that were recovered would revert back to the countries from ... whence they were taken.” Ferdinand told him that he had so much gold that selling it could have a large effect on the world economy or even “start World War III.”

Curtis also testified that General Ver had brought him to a basement room in the Mar-coses’ Miravelles summer palace, where the gold bars were kept. Curtis entered a room “about roughly 40 by 40,” stacked to the ceiling with bars of gold. He estimated the ceiling to be ten feet high. Two or three four-foot wide aisles ran through the stacks of gold. The bars were in a standard seventy-five kilogram size. He noticed that the bars had “[ojriental markings” on them. Later, Ferdinand showed Curtis a solid gold buddha statue with a removable head, which Curtis identified from the pictures taken at Roxas’s house as the same buddha that Rox-as had discovered.

On cross-examination, Curtis testified that his study of the Yamashita treasure had suggested that the treasure contained eighteen buddhas and was distributed among 172 sites. He also testified that Ferdinand had told him that the gold that Curtis had seen *106 bad come from a site in the Luzon region. Moreover, in 1975, while Curtis was working with Ferdinand, another site was discovered in the town of Teresa, and more gold was retrieved.

Curtis and others began the work of designing and building a refinery in the Philippines to fulfill Ferdinand’s requests. However, on July 5,1975, General Ver took him to a military cemetery at Fort Bonafacio, walked him to a freshly-dug hole, and put a gun to his head, saying “[W]e’re good friends but[,] I’m sorry, I have to do this.” Curtis was able to talk General Ver out of shooting him and then quickly left the Philippines. He did not return to the Philippines as long as Ferdinand remained in power.

Olof Jonsson also testified that he had seen stacks of gold bars. Jonsson testified that he had first traveled to the Philippines at the invitation of a colonel stationed at Clark Air Force Base. He was brought there to use his powers as a psychic to locate gold that the colonel believed to be buried there. Jonsson described his psychic powers as including telekinesis, clairvoyance, telepathy, and the power to dematerialize objects with his mind.

While he was in the Philippines, Jonsson was asked to meet Ferdinand. He was brought to Ferdinand’s office in the Malaean-ang Palace. Ferdinand invited Jonsson to stay at a guest house on the palace grounds. After several weeks, Jonsson left the Philippines, but he returned in 1975 with Curtis when the latter had traveled to the Philippines in order to discuss resmelting gold with Ferdinand. On this occasion, Jonsson met again with Ferdinand and General Ver. General Ver showed him a basement room in the guest house outside Malacanang Palace and another room in the summer palace, both filled with gold. He was also shown a golden buddha in the summer palace that was too heavy for him to move. Jonsson described the basement room in the guest cottage as being approximately twenty feet wide, forty feet long, and twelve feet high. He estimated the room in the summer palace as measuring “probably 40 feet by 25 or something” and twelve feet in height. Both rooms were filled with two-foot-long bars of gold stacked to the ceiling. Jonsson testified that it was possible that the bars were four inches wide and four inches thick, but that he could not recall exactly.

A number of witnesses also testified regarding Ferdinand’s alleged attempts to sell his gold surreptitiously. Two Australian citizens, Michael O’Brien and John Doel, testified that they were partners in an Australian real estate venture. In 1983, O’Brien and Doel were seeking capital to finance their project. The partners met a Malaysian, Andrew Tan Beng Chong (Tan), who asked the partners to serve as brokers for the sale of ten thousand metric tons of gold in exchange for commissions on the sale. When O’Brien asked Tan the identity of the owner of such a large amount of gold, Tan stated only that the gold was available and could not be sold by regular means because of the source. O’Brien and Doel agreed to assist and created a company, designated “Remington,” to carry out the transactions. The partners found buyers for the gold, and Doel subsequently traveled to the Philippines on April 20, 1983 at Tan’s instruction. Doel met with Colonel Eike Manois, who claimed to represent the principal seller in the transaction but refused to disclose the seller’s identity. At a subsequent meeting, however, a man identified as “Doming” Clemente, an associate of the colonel’s, told Doel that Ferdinand was the owner of the gold. Clemente also stated that Imelda was aware of the transaction, but that Ferdinand was handling the details.

During the time that Doel and O’Brien were working on completing the transaction, Clemente relayed an offer from Ferdinand to sell Doel a one-ton golden buddha that Ferdinand had obtained in Baguio City. Doel refused the offer. Clemente also told Doel that the gold bars, which were the object of their transaction, had been “war booty items” and had been “buried in tunnels behind the hospital at Baguio City.”

O’Brien also traveled to the Philippines. At one point, when he expressed doubt as to the existence of so much gold, he was blindfolded and taken to a warehouse. Inside the warehouse was a stack of approximately three hundred to four hundred boxes, each the size of a six-pack of beer. O’Brien *107 opened one and observed that it contained three crudely smelted gold bars, which he described as being pitted “like an orange peel.” He tried to lift several other boxes and found them too heavy to move. The partners were successful in having the parties sign contracts for the sale of the gold, but, as of July 1983, only a portion of the contracts were executed to their knowledge.

Norman Dacus, a retired American police officer, testified that he lived in the Philippines between August 1983 and April 1985. Dacus had relocated there because he had been recruited by a friend, Joseph Zbin, to become his partner “in brokering gold for [President] Marcos[.]” Dacus met with O’Brien and Clemente with respect to arranging gold transactions. He also met with Ferdinand, General Ver, and other army officers. Dacus was involved in “educating” Ferdinand about “how gold has a fingerprint on it and how you can tell which gold comes from which country.” Ferdinand advised him that the first increments of gold he planned to sell were in ten-kilogram ingots, bearing the stamp of the Central Bank. At a subsequent meeting, Ferdinand stated that some of the gold was in metric ton blocks. On one occasion, Dacus was shown what he estimated to be one hundred metric tons of gold, located in a vault at the Coconut Planter’s Bank. Later, Dacus was flown to Ilocas Norte and taken to a shrine constructed for Ferdinand. Inside, he observed an approximately four-foot tall, gold-colored buddha statue and what he estimated to be three hundred to five hundred metric tons of gold comprised of twenty-five kilogram ingots.

Based on portions of the testimony of Robert Curtis, Olof Jonsson, Michael O’Brien, and Norman Dacus, Nelson Colton, a longtime gold trader and manager in the gold refining industry, rendered an opinion regarding the value of the gold that the witnesses had allegedly observed. Colton estimated the volume and value of the gold described by the various witnesses in terms of the price of gold on the world market on various dates, including the time of the alleged conversion and in 1980, when gold was at its highest world price subsequent to the alleged conversion.

6. Move to Hawai'i

On February 25, 1986, after they were removed from power by a popular revolution, the United States government transported Ferdinand and Imelda to Hawai'i. Soon thereafter, Roxas contacted a childhood friend, Felix Dacanay, who had become a Georgia resident, to help him press his claims against the Marcoses. On June 3, 1986, Roxas assigned all of his rights to the Yamashita treasure to GBC, which Dacanay had incorporated in Georgia, in exchange for a minority holding of non-voting shares.

Richard Hirschfield, an American attorney, testified that he met the Marcoses in Hawai'i in 1986 or 1987. Ferdinand hired him to arrange for an eighteen million dollar loan from Al-Fassi, a member of the Saudi royal family. Marcos offered to secure the loan with gold bullion, of which he claimed to possess tons. He told Hirschfield that he “had access to this Yamashita Treasure from the General of the Japanese War.” Hirsch-field also testified that either Ferdinand or Imelda told him that they had taken a golden buddha from the person who discovered the treasure and replaced it with a brass buddha.

7. The Baguio City Court proceeding regarding the buddha

Roxas died on May 25, 1993. On April 20, 1995, his brother, Jose Roxas (Jose), commenced an action in Branch III of the Regional Trial Court of Baguio City, praying for release of the buddha statue being retained by the clerk of court and claiming that “I and our family desire to keep the said buddha as a m[e]mento of our late brother, ROGELIO D. ROXAS.” Jose’s petition was supported by two of Roxas’s sons; however, Jose admitted to the court that Roxas had had a number of children out of wedlock whose names he did not know “because [Roxas] had several mistresses.”

At the initial hearing on the petition, conducted on April 28, 1995, Jose testified that he had been present when the raiding party confiscated the buddha. The court directed Jose to inspect the buddha in the clerk’s possession and testify whether it was the same one taken from Rogelio Roxas. The *108 court noted from its own observation that “[i]t appears ... that the color is gold but it is superficial, it is only the outer part because there are parts where the color was chipoff [sic] and what you see is silver or white[.]” Jose identified the buddha as the statue confiscated from Roxas’s house.

At a second hearing, held on May 15,1995, Jose testified that the buddha that had been in Roxas’s house was “made of lead or copper but the reporters added that said Buddha was made of gold.” He testified further that “[Roxas] also knew it was made of lead” but that Roxas had claimed that it was gold because he had been bribed by politicians to do so. Accordingly, Jose described his purpose in initiating the proceeding as follows:

It is the claim of the reporters] that it was made of gold. The reporters are wrong. That’s why if that Buddha will be given to me, I want it to be burned so that there will be no evidence against the Marcoses or it will not be a cause of shame to our country.

When the court asked him what he meant by “shame to our country,” he responded that

a politician will be able to use it against ■ [Ferdinand Romualdo, aka] Bongbong[,] Marcos [II] .... [b]ecause it is still fresh in the minds of our people that his father was blamed for confiscating the Buddha but the truth is that he did not do it. What I mean is that this Buddha can be a ground for shame as it was a substitute for what was allegedly to be the golden Bud-dha and allegedly seized by President Marcos and so lest it will be used for that purpose, this should be melted and obliterated ....

The trial court’s record included a letter to the judge sent by Daniel Cathcart, the attorney for GBC and the Roxas Estate, dated June 27, 1995. The letter alleged that Imelda had met with Jose and offered him money to petition the court for the brass buddha and falsely identify it as the one taken from Rogelio. In the letter, Cathcart further stated:

I understand that another hearing is set for sometime in the month of July at which time the court may turn over the fake Buddha to Jose Roxas. I bring these facts to your attention so that you can determine whether or not the facts are true, and under the facts as you find them, whether the Buddha should be turned over to Jose Roxas.

Cathcart’s letter concluded by asking the court to “deny possession of the fake Buddha to Jose Roxas.” Another Philippine national, Alberto Umali, also submitted a claim to the buddha, based on a purported contract with Roxas to share the treasure that Roxas found. Umali claimed that he needed custody of the buddha in order to use it as evidence in furtherance of his efforts to recover the actual golden buddha.

The trial court filed an order containing its findings on May 30, 1996. The court determined that the buddha had been kept solely on the authority of a search and seizure order issued in 1971 and that the state was no longer legally justified in retaining it. The only question that remained was, as between Umali and Jose, who had the better claim to the buddha. The court ruled that Umali’s contractual claim should be brought against the administrator of the Roxas Estate and was insufficient to support the release of the buddha to Umali in the current proceeding. Accordingly, the court released the buddha to Jose “IN TRUST FOR the estate of the late Rogelio Roxas.” The court added the following observations:

Now, as to whether or not there is that controversial Golden Buddha different from the one now in custody of this Court, there is none. It bears repeating that the Republic of the Philippines with the vast resources under its command surely would and should have found that kind of treasure a long time since but the fact remains that it has not and the fact that it is made of gold appears merely to be the creation of unscrupulous minds.

This Court feels, rather sadly, that when the true Marcos estate is finally unraveled and subsequently ordered to be divided, everyone wants to be counted in. And in the frenzied and mad scramble for a share of the late President Marcos’s estate, everything and anything is possible and anyone who shall get a share, whether deserved or not, becomes a matter of who *109 has the cutting edge and the speculation is that whoever gets hold of the Buddha, in the final analysis, has that edge.

The court’s order made no mention of Cath-cart’s letter or the facts alleged therein.

B. Procedural Background

1. Initial pleadings

Roxas and GBC filed the instant lawsuit against Ferdinand and Imelda on February 19, 1988. In the complaint, Roxas asserted claims of false imprisonment and battery against Ferdinand only. These claims related to his repeated detentions and torture, which the complaint specifically alleged that Ferdinand had orchestrated “for and on his own behalf and not in any official capacity as President of the Philippines or otherwise[.]” GBC asserted claims for relief against both Ferdinand and Imelda for (1) conversion, (2) constructive trust, and (3) fraudulent conveyances. In particular, GBC’s claims related to the taking of the golden buddha, the gold bars, and other items from Roxas’s home, as well as the taking of the gold bars from the treasure site and the subsequent conveyances of some of those items.

The Marcoses attempted to remove the action to the United States District Court for the District of Hawaii, but the federal district court remanded the matter back to the first circuit court by an order filed on August 23, 1988. The Marcoses’ first responsive pleadings in the state trial court consisted of a motion to dismiss the complaint, accompanied by a motion for a more definite statement, both filed on January 20, 1989. In their memorandum in support of the motion to dismiss, the Marcoses argued that the complaint should be dismissed because: (1) service of process was improper; (2) the actions were barred by the statute of limitations; (3) the defendants were immune under the doctrine of “head-of-state” immunity; (4) adjudication of the case was precluded under the “act of state” doctrine;' and (5) the doctrine of forum non conveniens compelled dismissal.

The circuit court denied both motions by order dated April 25, 1989. The Marcoses filed an answer to the complaint on April 6, 1989. Among the affirmative defenses included in the answer was the claim that “[t]he court lacks personal jurisdiction over the Defendants.”

2. Substitution of parties

On September 29, 1989, Ferdinand died. His death was first reflected in the record on June 5, 1990, when the plaintiffs-appellees filed motions for an order compelling discovery concerning the identity of the proper person to substitute as a party defendant for Ferdinand, as well as for an order extending the time to effect the substitution. Apparently, during the same period, Imelda was pursuing litigation in. the Philippines in an attempt to be appointed personal representative of the Marcos Estate. In anticipation of her success, on March 17, 1992, the parties filed the following written stipulation:

IT IS HEREBY STIPULATED and agreed that Imelda Marcos be substituted pursuant to Rule 25 of the Hawaii Rules of Civil Procedure[ 8 ] for the purpose of defending this litigation as the representative of Defendant Ferdinand Marcos deceased. This stipulation is without prejudice to any issue pertaining to abatement or survival of actions or claims.

After Roxas’s death in 1993, the circuit court granted a motion to substitute Daea-nay, in his capacity as personal representative of the Roxas Estate, for Roxas as a party plaintiff.

*110 On June 6, 1995, Imelda’s counsel filed a status report with the circuit court, noting that

[t]he government of the Republic of the Philippines (“Republic”) and Mrs. Marcos have, during this time, litigated in the courts of the Philippines the question of whether the Republic or Mrs. Marcos should be designated by the Philippines probate court as personal representative of the estate of the late President Marcos. The probate court has ruled in favor of the Republic, and has appointed its designated representative as the administrator of the estate of the late President Marcos. Mrs. Marcos has vigorously opposed this decision on the grounds the Republic claims to be a creditor of the estate to the extent of the entirety of the assets in the estate, and therefore, is disqualified from being administrator of the estate.

Attached to the status report was a copy of a letter purportedly sent to one of the Marcos-es’ attorneys by the Solicitor General of the Philippines. The letter stated that a probate proceeding had been opened for Marcos’s estate in the Regional Trial Court of Pasig, Metro Manila, the Philippines, and that the Commissioner of the Philippine Bureau of Revenue, Liwayway Vinzons-Chato, had been provisionally appointed as special administrator of the estate. Because Vinzons-Chato had not appointed counsel to represent her in any American trial proceedings, the Solicitor General instructed Imelda’s counsel “to desist from representing the Estate of the late Ferdinand E. Marcos and/or to appear in any proceedings involving the Estate of the late Ferdinand E. Marcos, such as in the taking of depositions and/or representing the Estate thereat or at any other forum.” The status report concluded that, “[i]n view of the conflicting positions, the Court may wish to defer trial of the cause until further resolution of the ongoing dispute between the Republic and Mrs. Marcos in the courts of the Republic.” Vinzons-Chato never made any attempt to intervene in the present action, and neither party attempted to add her as a party defendant.

On January 11, 1996, the Regional Trial Court of the National Capital Judicial Region, Branch 156, in Pasig City, Metro Manila, filed an order admitting the will of Ferdinand Marcos to probate. 9 Pursuant to the provisions of that will, the court appointed Imelda Marcos and her son, Bongbong, as executors and personal representatives of the estate contingent on the filing of a bond. However, at oral argument in the instant appeal, Imelda’s counsel represented to this *111 court that, on appeal of the trial court’s order by the state, the Philippines Supreme Court had reversed the trial court’s order appointing Imelda and Bongbong as executors. 10

On April 16, 1996, the plaintiffs-appellees moved to substitute Irene Silverman for Ferdinand as a party defendant. Silverman, a California attorney, had been appointed personal representative of the Marcos Estate, with power over its California assets, by the Los Angeles County Superior Court, in a probate action initiated by GBC in California. See supra note 9. In addition, GBC had petitioned the first circuit court to open a probate proceeding in Hawai'i, naming Sil-verman as personal representative of the Marcos Estate. 11 The plaintiffs-appellees brought their motion for substitution of parties “on the grounds that, as [a] result of the death of Ferdinand Marcos, it [was] necessary to add the judicially-appointed personal representative of his estate as a party defendant in his place and stead.” Imelda opposed the motion, arguing that the March 17, 1992 stipulated substitution filed by the parties sufficed: “[T]here is a proper Rule 25 Substitution of Party. All defendants who have appeared in this case, as I say, have been substituted where appropriate in this case and there is no logical or legal basis to appoint a personal representative.” In opposing the motion, however, Imelda made no mention of the January 11, 1996 Baguio City trial court order. The plaintiffs-appellees countered that “[w]hether or not that stipulation is effective and equivalent to having a judiciously [sic] appointed administrator is an issue that could be raised at a later time that could collaterally attack this judgment, and[,] accordingly[, we] want to make sure we had the right people here before we went to trial.”

The circuit court denied the plaintiffs-ap-pellees’ motion on the ground that “Imelda Marcos has already by stipulation agreed to defend as a personal representative,” but offered to reconsider its ruling if GBC was successful in procuring an order from the Hawai'i probate proceeding naming Silver-man as personal representative of the Marcos Estate.

The plaintiffs-appellees renewed their motion for substitution on June 7, 1996. In her memorandum in opposition, Imelda