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CONFLICTS OF LAW

PART ONE: INTRODUCTION


I. Scope and Conflict of Laws: Nature, Definition and
Importance
A.

Private International Law

Principally governs states


in their relationships
amongst themselves

Principally
governs
individuals in their private
transactions
which
involves a foreign element

Diversity of Laws, Customs and Practices

PRIL: that part of municipal law which covers cases with a


foreign element.
Hilton vs. Guyot
(1895)
FACTS: Defendants were sued in France, and the French
court rendered judgment against them. Plaintiffs sued
defendants on the French judgment in the US. The US
court held the French judgment conclusive.
HELD: No law has any effect, of its own force, beyond the
limits of the sovereignty form which its authority is derived.
The extent to which the law of one nation, as put in force
within its territory xxx shall be allowed to operate within the
dominion of another nation, depends upon xxx the comity
of nations.
Comity of nations is the recognition which one nation allows
within its territory to the legislative, executive or judicial acts
of another nation, having due regard both to international
duty and convenience, and to the rights of its own citizens or
of other persons who are under the protection of its laws.
The reasonable, if not necessary conclusion appears to us to
be that judgments rendered in France, or in any other
foreign country, by the laws of which our own judgments are
reviewable upon the merits, are not entitled to full credit and
conclusive effect when sued upon in this country, but are
prima facie evidence only of the justice of the plaintiffs
claim.
B.

Public International Law

Definition

Second Edition of Jurisprudence: private international law is


that part of the law of each state or nation which determines
whether, in dealing with a legal situation, the law of some
other state or nation will be recognized, given effect or
applied.

Distinguished from Public International Law and other


disciplines:

As to sources of law:
Codified in Art. 38 of the
Statute of International
Court of Justice

As to persons involved:
Governs only states and
internationally-recognized
organizations
As to transactions:
Involves state-to-state or
government-togovernment matters
As to remedies:
In case of violation, a state
may resort to
1) diplomatic protest
2) peaceful means of
settlement
(diplomatic
negotiations, arbitration
or conciliation)
3) adjudication by filing a
case before international
tribunals
4) use force short of war,
or eventually go to war

C.

Generally derived from


the internal law of each
state and not from any
international
law
extraneous to municipal
law
Governs individuals or
corporations

Relates
to
transactions
individuals

private
between

All the remedies are


provided by municipal
laws of the state, such as
resort to courts or
administrative tribunals

individuals and juridical entities, naturalization law, laws on


domicile and residence, family relations, contracts, torts,
crimes, corporation law and property law.

3 Issues in Conflict of Laws:


1) Issue of adjudicatory JD: determines the circumstances
that allow for a legal order to impose upon its judiciary the
task of deciding multi-state and multinational disputes
2) Issue of choice-of-law: refers to the probable sources from
which the applicable law of the controversy may be derived
3) Recognition and enforcement of foreign judgments: study
of situations which justify recognition by the forum court of a
judgment rendered by a foreign court or the enforcement of
such within the forum
II. A Brief History and Development of Conflict of Laws
A.

Object and Function of Conflict of Laws: to provide rational


and valid rules or guidelines in deciding cases where the
parties, events or transactions are linked to more than one
JD.
Conflict of law rules aim to promote stability and uniformity
of solutions provided by the laws and courts of each state
called upon to decide conflicts cases.

Scope: covers the entire range of laws as it cuts across the


subjects of JD of local courts or tribunals, the law on
evidence or proof of foreign law, the personal law of

Ius gentium
In PIL, it means the law of nations
It is used in the early Roman empire to mean the
body of rules developed by the praetor peregrinus to
resolve disputes between foreigners or between
foreigners and Roman citizens
It includes Greek legal doctrines and concept of
bona fides as ius civile only applies t Roman citizens

Object, Function and Scope

Roman Law

Italian City States


The rise of this city states prompted intensive
study of conflict of laws
Bartolus: Father of Conflict of Laws; formulated
Theory of Statutes
Because Northern Italy was divided into several
city states each having their own laws on private matters,
the Statute was applied to problems of choice of law.
Statute is classified into:
a. real applied to immovable property within
the state
b. personal followed the person even outside
the domicile and governed questions on
personal status, capacity and movables
c. mixed contracts, if entered into by the
different nationals

-application of foreign law was not


due to comity but the resultant
benefits for everyone concerned
- advocated situs theory (seat of
legal relationship): every element
of transaction be governed by the
law of the place with which said
element has the most substantive
connection

16 century, France
th

Charles Dumoulin advocated a method to determine


what law would govern contracts between different
nationals

Bertrand DArgentre formulated the principle of


universal succession followed in the Spanish Civil Code
and adopted in the Phil. Civil Code

Pascuale Mancini

Netherlands

Ulrich Huber first used the term, conflict of laws


Dutch jurists asserted that State has no obligation to
apply a foreign law unless imposed by treaty, by comitas
gentium or on consideration of courtesy and
expediency.
Dutch jurists led by Huber developed territorial
principle where the laws of every state may operate only
within its territorial limit but such sovereign state may
recognize that a law, which operated in the country of
its origin, shall retain force everywhere provided that it
will not prejudice its subjects.

Comitas Gentium was readily accepted because of

B.

increasing international transactions.

Ius Commune, applied by Italian and French jurists,


was a supranational law based on Roman law and which
became the continental European common law.
Nations codified their national laws which included
conflict of laws provisions.
Ex. French Civil Code of 1804
became the pattern for Civil Codes of Spain,
Belgium and Romania
nationality law principle (contained in Art. 15
of our CC) was provided in Art. 3 of the
French Code

19 Century
th

Justice Joseph Story relied on the European


continental theorists concept of territorial sovereignty
and founded conflict of laws on the principle of comity
of nations.

advanced nationality theory in matters concerning


status, capacity and private interests of the
individual
Modern Developments

Neo-Statutists
followed Italian theory: when 2 or more
independent laws are applicable to a Conflict
problem, the method so devised determines what
law shall prevail
Internationalists
there should be a single body of rules that can
solve problems involving a foreign element
Territorialists
law of the State applies to persons and things
within the State, therefore, no foreign law is
applied.
Branch: only rights vested or acquired under
foreign law are recognized in the forum but not
foreign law itself
1969
2 Restatement of Conflict of Laws, adopted by
American Law Institute under Prof. William
Reese, proposed that in the absence of statutory
law, law to be applied in Conflict case, is the law of
the most significant relationship.
nd

Conflict of Laws in the Philippines


Spanish Civil Code enforced in the Philippines until 1950
contained the principles adopted from the French Civil
Code (Code of Napoleon) particularly the nationality law
principle. Art 16, par. 1, which applies lex situs rule was
adopted from Art. 10 of Spanish CC while par. 2 represents
the system of universal succession. Art. 17, par. 1 follows lex
loci contractus. But there was no significant jurisprudence on
the subject.

Frederich Carl Von Savigny


- founder of modern private IL

Conflict of Laws was included in law curriculum by UP


College of Law in 1911 (no less!). Until 1950s, law teachers
predominantly used foreign law books and decisions by
American courts.
In the Bar, it used to be a separate subject along with PIL
but when it was revised, PIL was included in Pol Law while
PRIL was merged with Civil Law. But, this does not mean
that PRIL is a part of civil law as this mindview tends to limit
the perspective and scope of analysis required for conflicts
problems.
Now, more problems in Conflict have arisen esp. with
Filipinos engaging in foreign business transactions, and in
international air transport and foreign tort claims and labor
contracts for OFWs.
III. Sources of Conflict of Laws
A.

Codes and Statutes

Conflict of Laws (CL) originated in continental Europe was


most laws were codified.
Primary sources of law are found in the civil codes of
different countries:
1.
2.

3.
4.
5.
6.

Roman code codified principles of ius gentium.


Code of Napoleon contained specific rule on
personal law of individual, this was followed by
several codes (Netherlands, Romania, Italy, Portugal,
Spain)
The German civil Code contained many
provisions on Conflict of Laws.
Switzerland also enacted Laws on cases involving
foreign elements.
Greece enacted a Civil Code with CL rules which
became a model in other countries
The Code of Bustamante (in South America) was
patterned after the Code of Napoleon

Conflict Laws of the Philippines


Spanish Civil Code was enforced in the Philippines on
December 7, 1889 until the Philippine Civil Codes
effectivity on August 30, 1950 which contained the
provisions on conflict of laws of the earlier code.

Spains Code of Commerce, having some provisions on


foreign transactions, were also enforced in the Philippines
on Dec 1, 1888.
One basic source of law is the 1987 Constitution which
contains principles on nationality and comity.
Special statutes were also enacted to govern cases with
foreign elements, to wit:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.

Corporation Code
General Banking Act
Foreign Currency System Act
Phil Foreign Law Guarantee Corp
Retail Business Regulation Act
Anti-Dummy Law
Nationalization of Rice and Corn Industry Act
Insurance Code
IP Code
Patent Law
Trademark Law
COGSA
Salvage Law
Public Service Act
Civil Aeronautics Act
Phil Overseas Shipping Act
Investment Incentives Act
Export Incentives Act
RA 7722
B.

Treaties and International Conventions

The Philippines has entered into a number of treaties and


international conventions which deal with private
international law since it became a Republic.

12. Convention on World Intellectual Property


Organization
13. Berne Convention on Protection of Literary and
Artistic Works
14. Paris Convention on Protection of Industrial Property.
Although many Hague Conventions on Private International
Law were concluded since 1951, which dealt with issues on:

Personal status

Patrimonial family status

Patrimonial status such as agency and


trusts
The Philippines is a signatory to the Convention on
Recognition of Foreign Judgment on Civil and Commercial
Matters and has ratified the 1993 Convention in Respect of
Inter-Country Adoption only.

C.

Treatises, Commentaries and Studies of Learned


Societies

In interpreting statutes and codes involving CL, courts resort


to works of distinguished jurists and studies of learned
societies.
Distinguished writers in continental Europe include Huber
Manreas, Savigny (whose work was translated into English by
Guthrie), and Weiss.
Distinguished American and English writers, on the other
hand, include Beale, Cavers, Cheatham, Currie, Ehrenzweig,
Goodrich, Gussbaum, Story, Wharton, Cheshire, Graveson.
The American Law Institute published 2 studies on CL:
Restatement of the Conflict of Laws and a Second
Restatement with William Reese as Reporter.

PART TWO: JURISDICTION AND CHOICE OF LAW


IV. Jurisdiction
Jurisdiction may mean either a) judicial or b) legislative
jurisdiction. (This part talks of judicial jurisdiction)

Judicial JD the power or authority of a court to try a case,


render judgment and execute it in accordance with law.

Legislative JD the ability of the state to promulgate laws


and enforce them on all persons and property within its
territory.

4 Major Questions in Analyzing a Conflict of Laws Problem:


1)

Has the court JD over the person of the defendant


or over his property?

2)

Has the court JD over the subject matter


(competency)?

3)

Has the suit been brought in the proper venue in


cases where a foreign element is involved?

4)

Is there a statute or doctrine under which a court


otherwise qualified to try the case may or may not
refuse to entertain it?

A.

Basis of Exercise of Judicial Jurisdiction

Bases of Judicial Jurisdiction (3 groups):


1)

JD over the person (based on forum-defendant


contacts)

2)

JD over the res (based on forum-property


contacts)

3)

JD over the subject matter

Some of these treaties/conventions are:


1. Convention on Intl Civil Aviation,
2. Warsaw Convention,
3. Convention on Offenses Committed on Board Aircraft
4. Convention on the Suppression of Unlawful
5. Acts against Civil Aviation
6. UN Convention COGSA
7. Convention on Consent to Marriage, etc
8. Convention on Traffic of Persons
9. Convention on Elimination of Discrimination against
Women
10. Convention on Political Rights of Women
11. IC on the Suppression of Traffic of Women and
Children

D. Judicial decisions
Decisions of courts are the most important source of CL
rules and form the main bulk of source of conflict rules.
According to Graveson: This branch of law is more
completely judge-made than almost any other. In its
application, judges have to deal with All Manner of People
more than any other branch. The claim of justice for right as
a basis for conflict of laws is supported not only by the terms
of the judicial oath but by judicial dicta in judgments.

1.

Jurisdiction over the Person

This is acquired by the voluntary appearance of a party and


his submission to authority.
Over the person of the plaintiff: acquired the moment he
invokes the aid of the court by filing a suit.

basis of JD: presence of the property within the territory


Over the person of the defendant: acquired when he enters
his appearance or is served with the legal process within the
state.
When he or his lawyer appears in court, he gives consent to
the forums exercise of JD over him, except where the
appearance is for the purpose of protesting the JD over him.

over the subject-matter - WON the court has


competence to hear the case and render
judgment; the courts JD must be properly
invoked (provided for by statute)
_______________

3)

2.
A non-resident plaintiff who files a suit is deemed to consent
to the courts exercise of JD over subsequent proceedings
arising out of his original cause of action (counterclaims).
JD over the defendant may be had by personal or
substituted service of summons.
Gemperle vs. Schenker
(1967)
FACTS: Paul Schenker (Swiss citizen and resident) filed a
complaint against Gemperle through his wife Helen
Schenker, for enforcement of subscription to shares of
stock. Gemperle filed a suit against Paul for damages, saying
that Paul caused allegations to be published attacking his
reputation and bringing him into public hatred and discredit
as a businessman. Schenkers defense: court has no JD over
the person of Paul.
HELD: Jurisdiction was acquired by the lower court over the
person of Paul through service of summons addressed to
him upon Helen, it appearing from the answer that she is the
representative and attorney-in-fact of her husband in the civil
case.

Jurisdiction:
1) over the person
a) voluntary appearance
b) submission to authority

rule: in substituted service, the premise is that the defendant


is within the territorial JD of the court

exception: Gemperle case because Helen is legally


authorized to file a case in behalf of Paul, she is also
authorized to receive summons
2)

over the property


a) in rem the situs could bind the
world
b) quasi in rem

the suit is merely in personam, constructive service in this


form upon a non-resident is ineffectual for any purpose.
The important thing to prove is what kind of action is
involved (to determine sufficiency of form of service to be
used)

Jurisdiction over the Property

JD over the property results from:


a)

seizure of the property under a legal process

b)

the institution of legal proceedings wherein


the courts power over the property is
recognized and made effective

This kind of JD is referred to as in rem JD; the situs could


bind the world and not just the interest of specific persons.
Basis of exercise of JD: the presence of the property within
the territorial JD of the forum.

Quasi in rem JD: affects only the interests of particular


persons in that thing (ex. Quieting of title). (actions against a
person in respect of the res)
In these 2 proceedings, all that due process requires is that
the defendant be given adequate notice and opportunity to
be heard (which are both met by service of summons by
publication).
Pennoyer vs. Neff
(1878)
FACTS: Neff, a California resident, owned land in Oregon
which was sold under a Sheriffs deed to satisfy a money
judgment against him. The service of summons was made by
publication. He is suing for recovery of said land, alleging
that the sale was invalid for lack of JD of the Oregon court
over him.
HELD: Substituted services by publication, or in any other
authorized form, may be sufficient to inform parties of the
object of the proceedings taken where property is once
brought under the control of the court by seizure or some
equivalent act to any proceedings authorized by law upon
such seizure for its condemnation and sale.
But where the entire object of the action is to determine the
personal rights and obligations of defendants, that is, where

International Shoe Co. vs. Washington


(1945)
FACTS: The state of Washington sued International Shoe
Co. (a Delaware corporation with principal place of business
in Missouri) to collect the tax laid upon the exercise of the
privilege of employing salesmen within the state.
International Shoes defense is that its activities within the
state, consisting merely of exhibiting samples and soliciting
orders and nothing more, were not sufficient to manifest its
presence there; hence the state courts had no JD over it.
HELD: The SC of Washington has JD over International
Shoe. Due process requires only that in order to subject a
defendant to a judgment in personam, if he be not present
within the territory of the forum, he should have certain
minimum contacts with it, such that the maintenance of the
suit does not offend traditional notions of fair play and
substantial justice. (Minimum contacts so that the suit will
not offend traditional notions of fair play and substantial
justice.)
The demands of due process regarding the corporations
presence may be met by such contacts of the corporation

with the state of the forum as to make it reasonable xxx to


require the corporation with defend the particular suit which
is brought there.
Its presence can be manifested only by such activities
carried on in its behalf by those who are authorized to act for
it.
Mullane vs. Central Hanover Bank & Trust Co.
(1950)
FACTS: In an action for judicial settlement of accounts of
Central Hanover Bank as trustee of a common trust fund,
some of the beneficiaries who are non-residents of NY were
notified only by publication in a local newspaper.
HELD: When notice is a persons due, process which is a
mere gesture is NOT due process. The means employed
must be such as one desirous of actually informing the
absentee might reasonably adopt to accomplish it. Within

the limits of practicability, notice must be such as is


reasonably calculated to reach interested parties.

contacts exist among the forum, defendant and the cause of


action.

In Mullane, the manner notice was given should reasonably


result in informing the affected partner; when conditions do
not allow such notice, the form chosen should not
substantially be less likely to bring home notice than other
of the feasible and customary substitutes.

The change in the conceptual foundation of JD from


territorial power to fairness does not significantly affect
proceedings in rem, which are suits where the property itself
is the object of the controversy. The physical presence of the
property within the state establishes the states paramount
interest in adjudicating a claim over it and provides the
necessary minimum contacts.

Shaffer vs. Heitner


(1977)
FACTS: Heitner, a non-resident of Delaware with 1 share of
stock in the Delaware corporation Greyhound, sued
Greyhound and its officers for allegedly violating its duties.
Pursuant to the case, Heitner filed a motion for
sequestration of the defendants stocks in Greyhound. The
stocks, while not physically present in Delaware, are
considered to be there in view of it being the place of
incorporation.

In Shaffer, the minimum contacts and fundamental fairness


test should be satisfied regardless of whether the proceedings
are in rem, quasi in rem or in personam.

Traditional basis for the exercise of judicial JD is the states


physical power over persons and property within its territory;
this is why in in rem proceedings, it can exercise JD over
property situated in the state regardless of whether it could
otherwise exercise JD over the persons whose interest would
be affected by the decision.
In the US, there is a shifting trend from theory of territorial
power to considerations of minimum contacts and
fundamental fairness. This approach demands that there be
forum-transaction contacts that will make it fundamentally
fair to require the defendant to defend a suit in the forum
regardless of his non-resident status.
Distinction, Shaffer and International Shoe: while
International Shoe requires minimum contacts between the
defendant and the forum, Shaffer demands that minimum

Presence/Jurisdiction:
1) Traditional Views
a)
Pennoyer actual physical presence
2) Modern Views

Long-Arm Statutes
Long-arm statutes specify the kinds of contacts upon which
JD will be asserted. Some long-arm statutes broadly
authorize courts to assert JD in any case not inconsistent
with the Constitution, leaving it to the court to define its
limitations on a case-by-case basis.

3.
HELD: The Delaware court cannot exercise JD just
because the stocks are statutorily present in Delaware. The
property (stocks) is not the subject matter of the litigation
nor is the underlying cause of action related to the property.
Also, the facts in CAB does not demonstrate that defendants
have purposefully availed themselves of the privilege of
conducting activities within the forum state in a way that
would justify bringing them before a Delaware court.

power to enter upon the inquiry, not whether its conclusion


in the course of it is right or wrong.

a)

Intl. Shoe contact between the forum


and the corporation (even in the
absence of an actual office, etc.)

b)

Mullane disregards strict distinction


between in rem and in personam

c)

Shaffer minimum contacts between


the properties and forum; fundamental
fairness test

Jurisdiction over the Subject-matter

Subject-matter JD is allocated among the courts by


constitutional and statutory laws, according to the nature of
the controversy, thereby determining the competence of the
court to try and decide a case.
It is not enough that a court has a power in abstract to try
and decide the case; it is necessary that said power be
properly invoked xxx by filing a petition. Subject-matter JD
cannot be conferred by consent of the parties.
Idonah Perkins vs. Roxas
(1941)
FACTS: Eugene Perkins filed a complaint against Benguet
Consolidated for the recovery of declared dividends, but
Benguet withheld payment upon the opposing claim of
Idonah Perkins, wife of Eugene. Idonah sets up a NY
judgment declaring her to be the sole owner of the Benguet
shares
and
allege
that
such
judgment is res judicata.
HELD: The CFI has jurisdiction over the case, despite the
presence of the NY judgment. Whether or not the trial
judge in the course of the proceedings will give validity and
efficacy to the NY judgment set up by Idonah in her crosscomplaint is a question that goes to the merits of the
controversy and relates to the rights of the parties as between
each other, and not to the jurisdiction of the court. The fear
that the trial judge may render judgment annulling the final
judgment of the NY court is not a ground to deny the lower
court of JD. The test of JD is whether or not the tribunal has

Long-arm statutes: already identify what are the bases of JD.

Jurisdiction and choice of law do not mean


the same thing.
_______________
B.

Ways of Dealing with a Conflicts Problem

The court may deal with a conflicts problem, by:


1)

dismissing the case for lack of jurisdiction or on


the ground of forum non conveniens

2)

assuming jurisdiction and applying either forum or


foreign law

1.

Dismiss the case

Doctrine of Forum non Conveniens


This doctrine requires the court to dismiss the case on the
ground that the controversy may be more suitably tried
elsewhere. This phrase literally means the forum is
inconvenient.
Reasons for applying forum non conveniens:
1)

to prevent abuse of the courts processes (prevent


harassment of defendant, dissuade a non-resident

plaintiff from choosing the forum because of


larger jury verdicts, etc.)

in NY in behalf of the victims. Union carbide moved to


dismiss on the ground of forum non conveniens.

2)

burdensome on the court or taxpayers (severe


backlog of cases)

3)

local machinery is inadequate to effectuate a right


(no way for court to secure evidence and
attendance of witnesses)

HELD: Indian courts have JD, not US courts. Even if UCC


has domicile in the US, this loses significance because it gave
its consent to Indian JD. Moreover, the findings of the court
show that the proof bearing on the issues to be tried is
almost entirely located in India (principal witnesses and
documents, detailed designs, implementation of plans, safety
precautions, etc.).

4)

avoid global forum shopping

English and Scottish courts have applied FNC when there


was another available and more appropriate forum, in
which the ends of justice would be better served in view of
the interests of all parties, by eliminating the vexatious or
oppressive character of the pending proceedings and by
removing any unfairness to either party which would result
from trial in the forum seized of the case.
Heine vs. New York Insurance Co.
(1940)
FACTS: An action for recovery on life insurance policies
made and issued in Germany was filed by German citizens
in Oregon against a NY corporation.
HELD: The Oregon court may refuse to exercise JD. The
courts of Germany and New York are open and functioning
and competent to take JD of the controversies, and service
can be made upon the defendants in either of such JDs. To
require the defendants to defend the actions in Oregon
would impose upon them great and unnecessary
inconvenience and expense. The courts of this country are
established and maintained primarily to determine
controversies between its citizens and those having business
there, and manifestly the court may protect itself against a
flood of litigation over contracts made and to be performed
in a foreign country, where the parties and witnesses are
nonresidents of the forum, and no reason exists why the
liability, if any, cannot be enforced in the courts of the
country where the cause of action arose, or in the state
where the defendant was organized and has its principal
offices.
In re: Union Carbide
(1986)
FACTS: An industrial disaster in a chemical plant of Union
Carbide in Bhopal, India caused deaths and injuries to a
number of residents. India enacted the Bhopal Gas Leak
Disaster Act, which authorized the government (Union of
India) to represent the victims. The UOI filed a complaint

Wing On Company vs. Syyap


(1967)
FACTS: Syyap failed pay Wing On, a NY-based
partnership, its obligation for a contract of purchase of
clothing material. Wing On filed an action in the Philippines
against Syyap, but Syyap contends that the trial court should
have declined JD on the ground of forum non conveniens.
HELD: Forum non conveniens is inapplicable. Unless the
balance is strongly in favor of the defendant, the plaintiffs
choice of forum should be rarely disturbed, and
furthermore, the consideration of inadequacy to enforce the
judgment, which is one of the important factors to be
considered in the application of said principle, would
precisely constitute a problem to the plaintiff if the local
courts decline to assume JD on the basis of said principle,
considering that defendant is a resident of the Philippines.
There is no existing catalogue of circumstances that will
justify sustaining a plea of forum non conveniens but, in
general, both public and private interests should be weighed.
When the forum is the only state where JD can be obtained
over the defendant and, in addition, some relation with the
parties exists or when the forum provides procedural
remedies not available in another state, the forum court may
not resist imposition upon its JD.
Bank of America vs. CA
(2003)
FACTS: The spouses Litonjua are engaged in the shipping
business; they executed a contract where Bank of America
was made the trustee of their businesses. But the businesses
suffered losses in the hands of the bank, so the spouses filed
a case for damages for breach of trust and accounting of
revenues in the Philippines. Bank of America filed a Motion
to Dismiss on the ground of forum non conveniens.

HELD: While it is within the discretion of the trial court to


abstain from assuming JD on the ground of forum non
conveniens, it should do so only after vital facts are
established, to determine whether special circumstances
require the courts desistance; and the propriety of
dismissing a case based on this principle of forum non
conveniens requires a factual determination, hence it is more
properly considered a matter of defense.
The SC also held in Philsec. Investment vs. CA that the
doctrine of FNC should not be used as a ground for a
motion to dismiss because Sec. 1 Rule 16 of ROC does not
include said doctrine as a ground.

Forum non conveniens:


1)
2)
3)

prevent abuse of court processes


burdensome on the court/taxpayers
prevent global forum shopping
FNC is not something that automatically applies;
its application rests in the sound discretion of
the court

in Wing On vs. Syyap. Prof. Pangalangan does


not agree with the holding that unless the
balance is strongly in favor of the defendant, the
plaintiffs choice of forum should rarely be
disturbed, because in the first place, it was the
plaintiff who chose that forum.
_______________

2.

Assume Jurisdiction

When the court assumes JD, it may apply forum law or


foreign law, although forum law should be applied whenever
there is good reason to do so because the forum law is the
basic law.
Factors which justify the application of internal law:

1)

A specific law of the forum decrees that


internal law should apply

Examples of this are Art. 16 of Civil Code (lex nationale


governs testate and intestate succession of the person whose
succession is under consideration); Art. 829 of the Civil
Code (revocation of wills outside RP); and Art. 819
(prohibition on joint wills by Filipinos).

Example: prohibitory or mandatory laws of


the forum

2)

The proper foreign law was not properly


pleaded and proved

Our courts may not take judicial cognizance of any foreign


law; hence, failure to plead and prove foreign law leads to
the presumption that it is the same as forum law.

a)
b)

her counsel. In addition, the other heirs do not dispute the


provisions of the Nevada law. Under these circumstances,
the pertinent laws of Nevada can be taken judicial notice of
by the court, without proof of such law having been offered
at the hearing of the project of partition.
As the validity of the testamentary dispositions are to be
governed by the national law of the testator, the order of the
court approving the project of partition in accordance with
Nevada law must be affirmed.

Under the Rules of Court, the foreign law


may be proved by:
official publication
certification form the officer with official
custody, under seal, and the Phil. Embassy
must certify that such officer has official
custody, etc.: that it is the law in force at the
time etc., etc.

3)

The case falls under any of the exceptions to


the application of foreign law

a)

The foreign law is contrary to an important


public policy of the forum
The foreign law is penal in nature
The foreign law is procedural in nature
The foreign law purely fiscal or
administrative in nature
The application of the foreign law will work
undeniable injustice to the citizens of the
forum
The case involves real or personal property
situated in the forum
The application of the foreign law might
endanger the vital interest of the state
The foreign law is contrary to good morals

b)
c)
d)

Fleumer vs. Hix


(1930)
FACTS: Fleumer, the special administrator of the estate of
Hix, appealed the denial of the probate of Hixs will, alleging
that since the will was executed in West Virginia by a
resident therein, West Virginia law should govern.

e)

HELD: The courts of the Philippines are not authorized to


take judicial notice of the laws of the various States of the
American Union. Such laws must be proved as facts. Here
the requirements of law were not met. There was no
showing that the book from which an extract was taken was
printed or published under the authority of the state of West
Va. as provided in the Code of Civil Procedure; nor was the
extract from the law attested by the certificate of the officer
having charge of the original.

h)

Philippine Trust Co. vs. Bohanan


(1960)
FACTS: The will of Bohanan was admitted to probate; in
the probate he was declared to be a citizen of Nevada. In the
hearing for the proposed project of partition, Nevada law
was not introduced. Bohanans widow questioned the
validity of the will under Philippine law; however, if Nevada
law was to be applied, the will would be valid.
HELD: The law of Nevada, being a foreign law, can only be
proved in our courts in the form and manner provided for
by our Rules. However, it has been found that during the
hearing for the motion of the widow Bohanan for withdrawal
of her share, the foreign law was introduced in evidence by

f)
g)

V. Choice of Law
A.

The Correlation between Jurisdiction and Choice


of Law
1)

The factors that justify exercise of judicial


jurisdiction maybe the same factors used to
determine choice of law

2)

if the forum applies its internal law because it


has a real interest, the outcome of the case
will be foreordained by the forum
plaintiff will choose forum who has real interest in
applying its internal law
3)

generally, forum will apply its internal law so


plaintiff will bring suit where internal law is
favorable to him

BUT these are 2 diff. concepts. A court may exercise


jurisdiction but apply foreign law or not exercise jurisdiction
but the states internal law will be applied.

B.

Approaches to Choice of Law

Ideally, the object of all choice of law theories must be


justice and predictability.

1.
-

Traditional Approaches

theories that emphasize simplicity, convenience


and uniformity

a.
-

vested rights theory

advanced by Prof. Beale (1 Restatement)


an act done in a foreign jurisdiction gives rise to a
right if the laws of that state provides so. The right
vests and he can bring suit in any forum he
chooses.
The forum refers law of the place of the last act
necessary to complete the cause of action. (place
of injury)
If place of the last act creates no legal right,
although forum court creates such right if act is
done within its territory, it will not enforce the
right.
st

Gray vs. Gray


(1934)
FACTS: Wife (W) sued husband (H) for damages in New
Hampshire where they are residents. Accident happened in
Maine. Maine bars suit between spouses.
HELD: The effect of the prohibition in Maine is to divest
the W of any cause of action against H. If there is a conflict
between lex fori and lex loci, lex loci governs in torts in
respect to the legal effect and incidents of the act.
The status as spouses is determined by New Hampshire law
but the incidents of that status is governed by the law of the
place of the transaction (Maine).
Alabama Great Southern Railroad vs. Carroll
(1892)
FACTS: Carroll is an employee of Alabama RR. Both are
residents of Alabama. C was injured in the course of work
bec. of negligence of co-EE in Mississippi. Mississippi bars
recovery. Alabama makes employer liable. Suit is filed in
Alabama.

HELD: There can be no recovery in one sate for injuries to


the person sustained in another unless the infliction of the
injuries is actionable under the law of the state in which the
injuries were received.
Although it is claimed that the negligent conduct was done in
Alabama, the injury sustained creates the cause of action and
not the negligence. (law of the place of injury)

i.
ii.
iii.

Criticisms to the Approach: failure to resolve conflicts cases

vi.

iv.
v.

with considerations of policy and fairness.


vii.

b.
-

needs of the interstate and intl system


relevant policies of the concerned states
relevant policies of other interested
states
protection of justified expectations of
the parties
basic policies underlying the particular
field of law
certainty, predictability and uniformity
of result
ease in the determination and
application of law to be applied

Cooks Local Law Theory

treat conflicts cases as a purely domestic case that


does not involve a foreign element
power of a state to regulate within its territory has
no limitation except as imposed by its own positive
law
criticism: appeals to narrow-mined who favors an
exaggerated local policy bec a sovereign can do as
they please, depreciating the practical and
equitable considerations that should control the
case.

Examples of application:
i.

ii.

torts place of injury, place of tortious


conduct, domicile, residence or
nationality of parties, place where
relationship is entered
contracts choice of law of the parties,
place of contracting, place of
performance,
domicile,
residence,
nationailty, place of incorporation and
place of business

Haag vs. Barnes


(1961)
FACTS: Barnes & Haag had an affair in NY. H became
pregnant. After giving birth, H went to Chicago. Parties
entered into a support agreement in Chicago. The
agreement contained a choice of law clause (Illinois). H &
child went back to live in NY. H filed support action in NY
against B. Under NY law, agreement is not binding. Bs
defense: Illinois agreement bars suit.
HELD: Suit is barred by the prior support agreement. Court
found that Illinois has the most significant contacts. It is what
the parties intended to apply, the place of performance, the
place of business of B & the agents and the place where
support are being made compared to NY whose contacts are
of less weight & significance. (place of liaison & residence of
H & child)

Criticisms to approach: no standard to evaluate the relative


significance/importance of each contact such that court may
use approach to support any preconceived result without
explaining its real motives.

b.
c. Cavers Principles of Preference
-

choice-of-law decisions should be made with


reference to principles of preference which are
conceived to provide a fair accommodation of
conflicting state policies and afford fair treatment
to the parties.
Cavers principles have a territorialist bias; it looks
to the place where the significant events occurred
or where the legal relationship is centered.
Court should:
1) scrutinize the event/ transaction giving rise to
the issue
2) compare carefully the proffered rule of law &
the result of its application with the rule of
the forum & its effect
3) appraise these results from the standpoint of
justice between the litigants or of
considerations of social policy

2.

Modern Approaches

a. Place of the Most Significant


Relationship

Auten vs. Auten


(1954)
FACTS: Spouses were married and lived in England. H left
and went to NY. Spouses executed support agreement in
NY. H failed to pay support. W sued H for legal separation.
W sued in NY to enforce agreement. H claimed that legal
separation suit, extinguished liability under NY law.
HELD: English law should govern the parties. England has
all the truly significant contacts while the nexus to NY is
entirely fortuitous.
England is the seat of marital domicile and the place where
W & children were to be, it has the greatest concern in
defining and regulating the rights and duties existing under
the agreement and the circumstances that affect it. Whereas
NY is only the place of the agreement and where the trustee,
where moneys will be paid for the account the W &
children, had his office.
In applying the grouping of contacts theory, courts, instead
of regarding as conclusive the intention of the parties or the
place of making or performance, lay emphasis rather on the
law of the place which has the most significant contacts with
the matter in dispute.

-identifies a plurality of factors:

Interest Analysis

resolve conflicts cases by looking at the policy


behind the laws of the involved states and the
interest each state has in applying its own law.
Tasks of the court:

1 : determine whether the case involves a true,


false or apparent conflict (false conflict: only one
st

state has an actual interest in having the law


applied and the failure to apply the other state law
will not impair its policy)

2 : if there is apparent or true conflict, court


should take a second look on the policies and
interests of the states. If only one has a real
nd

interest, the other is insubstantial, then there is


false conflict. If both have real interests in applying
their law, then the apparent conflict is a true
conflict.
Babcock vs. Jackson
(1963)
FACTS: Babcock & Jackson, NY residents, met a car
accident in Ontario thru Js fault. B sued J in NY for
damages. Ontario bars recovery under a guest statute. NY
does not have a similar rule.

HELD: B should be allowed to recover. NY had a greater &


more direct interest than Ontario. NYs policy is to afford
compensation to a guest against tortfeasor host while
Ontarios policy is to prevent fraudulent collusion to the
prejudice of Ontario defendants-insurance companies.
Thus, Ontario had no interest in denying a remedy to a NY
guest against a NY host.
The rule on tort claim is:
Where the issue involves standard of conduct, law of the
place of the tort is controlling, but as to other issues, court
must apply the law of the state which has the strongest
interest in the resolution of the issue presented.

Criticisms to Approach: not all state legislatures publish


reports that explain the background and purpose of the laws,
thus court is left to speculate on the purpose of the law and
not all reflected policy or had a purpose other than to decide
cases.

Pangalangan on Interest analysis: why consider


what the state wants when interests of individuals
are in issue?

HOW? Court should consider whether the law of


a state reflects an emerging or regressing
policy.

e.

Leflars
Considerations

Choice-Influencing

5 major choice-influencing considerations


1) predictability of results
2) maintenance of interstate and intl order
3) simplification of the judicial task
4) application of the better rule of law
5) advancement of the forums governmental
interest
court should prefer a law that make good
socioeconomic sense and are sound in view of
present day conditions
Criticism: no principled or objective standard to
determine better rule.

Traditional approaches do not consider policy; all modern


approaches look at policy.
______________
VI. The Problem of Characterization

c.
-

Comparative Impairment

subordination of the state objective which would


be least impaired
How? Court should weigh conflicting interests and
apply the law of the state whose interest would be
more impaired if its laws were not followed

A.

Characterization and the Single-Aspect Method

Single-aspect method: choice of law theories traditionally


concentrated on one element of a situation to connect case
to particular legal community.
Goal: simplicity, convenience, uniformity

Art 16: Real property as well as personal property is subject


to the law of the country where it is situated.
However, intestate and testamentary succession, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of
testamentary provisions shall be regulated by the National
law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of
the country wherein said property may be found. (AOI)

Art 17: The forms and solemnities of contracts, wills, and


other public instruments shall be governed by the laws of the
country in which they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of the
Philippines in a foreign country, the solemnities established
by Philippine laws shall be observed in their execution.
Prohibitive laws concerning persons, their acts or property,
and those which have for their object public order, public
policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.
The rules specify geographical location in accordance with
traditional approach. The problem with this: inherent
rigidity, unjust decisions.
Solution: Characterization, Renvoi, Escape devices

Characterization: the process by which a court assigns a


disputed question to an area in substantive law. It is a part of
legal analysis and a pervasive problem since at least 2
jurisdictions with divergent laws are involved.

Multi-aspect method: modern approach by which all


d.
-

Trautmans Functional Analysis

this approach looks into:


1) the general policies of the state beyond those
reflected in substantive law
2) policies and values reflecting effective and
harmonious relationship between states
ex. Reciprocity, advancement of multistate
activity, protecting justifiable expectations,
evenhandedness and effectiveness.
after determining these policies, court should then
weigh the relative strength of a state policy

important factors (non/territorial) are analyzed.


The applicable law is arrived at by elaborating policies &
purposes underlying rules, and the needs of international
intercourse.
Goal: just resolution of case
The Philippines follows single-aspect method. Our conflicts
rules are mostly found in the Civil Code.

Art 15: Laws relating to family rights & duties, or to the


status, condition and legal capacity of persons are binding
upon citizens of the Philippines, even though living abroad.

Two Types of Characterization:


1.

Subject-matter Characterization

This calls for classification of a factual situation into a legal


category. It is significant in a single-aspect method because
the legal category to which an issue is assigned determines
governing law
Gibbs vs. Govt. of PI
(1933)
FACTS: Spouses Allison & Eva were residents & citizens of
California owning parcels of land in Manila. Eva died.

Allison, as administrator files petition to declare lands in his


favor pursuant to California law. California Civil Code
provides that upon wifes death previous to husband,
community property belongs absolutely to husband.

2. Tortious: law of the place where tortuous


conduct or injury occurred

2.
HELD: California Civil Code will not apply. The law of the
place where land is situated governs its descent, alienation
&transfer & for the effect & construction of wills & other
conveyances.
As mandated by Philippine law, the lands were acquired as
community property in the conjugal partnership. The wife
was vested with a title equal to that of her husband. Upon
her death, if there are no obligations of the decedent, her
share in the conjugal property is transmitted to the heirs by
succession.
Though the court was silent on the matter of
characterization, it had the task of categorizing the issue as
one involving:
b) property to be governed by lex situs, or
c) succession to be governed by decedents
national law (California)
Characterization problems are considered a threat to
traditional choice-of-law theories whose aims are uniformity
& predictability of results.
Problems:
A) C, is adopted in the Philippines by a former Filipino
citizen and moves to the US with her adoptive mother, M.
By Ms laws, C will not be an heir. Will C be entitled to an
intestate share in Ms estate?
The court would have to decide whether it is a Q relating to
1. Legality & effects of adoption: law of state where
legal relationship of adoption was established or where the
adoption decree was granted shall govern; or
2. Succession: adopters personal law shall prevail
B) Principal authorizes a person to act as his agent in
another country. Agent commits a negligent act. What law
will determine the principals liability?
It depends on the courts characterization of the case as:
1. Contractual: law of the place where the contract
of agency was entered into; or

wrong resulting to a physical injury shall not abate because of


the death of the wrongdoer. Plaintiffs cause of action
survives Pullens death.

Substance-Procedure Dichotomy

Directs the court to the extent it will apply foreign law.

If issue substantive: court may apply foreign law


If issue procedural: follow forum law

The reaction to Grant was generally negative. It was


criticized as being based on an erroneous characterization
greatly influenced by sympathy.
Other view: Correct result but arrived at using dubious
method.

Why apply forum law to matters of procedure?


One of the main goals of a rational system of CL rules:
Rights & Duties of parties arising from a legal situation shall
not be substantially varied because the forum in w/c action is
brought.
Courts of all civilized states now seek to protect parties, by
referring to foreign law, against a substantial change of
position because of fortuitous circumstance that suit was
brought in that forum.
The means provided for compulsion, or the limitation upon
compulsion are in most cases of equal practical importance
to the declaration of the validity of the plaintiffs claim.
Such all inclusive reference to foreign law is never made. It
would be too burdensome on the part of the forum and
administration of justice will be delayed. Thus, it is necessary
to limit the scope of reference to foreign law.
This limitation excludes phases of the case which make the
administration of foreign law inconvenient or violative of
local policy. In such instances, local rules of the forum are
applied & are classified as matters of procedure.

Currie: The court availed of one of several escape devices characterization. It characterized the problem differently,
such producing the result previously recognized as the sound
result.
This device is not ideal. It is better if courts could expressly
state the considerations that helped them determine the
results and indicate clearly how these considerations will be
used in other cases.
No objective standard has been suggested. An attempt to
explain the court decision in terms of demands of justice
or social policy would create uncertainty & arouse
criticism.
Procedural issues are governed by forum law so that the
court will not be unduly burdened by task of studying
peculiarities of another legal system. It must be noted,
though, that some matters cannot be clearly defined as
procedural or substantive.
Two Issues whose classification
substantive) is debatable:

(as

procedural

or

1) Statute of Frauds
Grant vs. Mcauliffe
(1953)
FACTS: Plaintiffs, Grant, et al., (California residents) were
injured in Arizona when their vehicle collided with that of
Pullens (California resident), who died of accident. The
suit against estate of Pullen filed by Grant to recover
damages was dismissed because under Arizona law- a tort
action not commenced before the death of the tortfeasor
must be abated. But under California law, an action for tort
survives the death of tortfeasor.
HELD: Survival statutes are procedural. Thus, California
(forum) law applies. Forum law governs if issue is
procedural. Under California Civil Code the action out of a

10

It is considered substantive if words of law relate to


forbidding the creation of obligation. One that forbids the
enforcement of the obligation is characterized as procedural

Marie vs. Garrison:

Defendant maintains that the NY


Statute of Frauds affects the remedy upon a contract w/in its
termsa rule prescribing evidence & deemed a rule of
procedure. Garrison claims that rules of the forum must be
followed. Marie claims that NY law was constructed as a rule
of substance going into existence of contract; determined by
lex loci contractus.

Issue: Whether a contract declared void by a stature still


subsists as a contract w/ the only effect of depriving party of a
remedy or mere evidence.
Held: It was a word of substance because the statute
provided that the contract of sale of any interest in land shall
be void unless it was in writing ex contrario to a law stating
that no action shall be brought of the requirement was not
complied with.

2) Statutes of Limitations (SL) & Borrowing Statutes


Statutes of limitations are traditionally classified as
procedural because they only barred the legal remedy
w/out impairing the substantive right involved.
Thus, a suit can still be maintained in another JD w/c has a
longer SL. However, certain SLs have been classified as
substantive for conflicts purposes if providing a shorter
period for certain claim types falling w/in wider class covered
by the general SL.

Specificity test: to determine whether an SL is substantive or


procedural.
An SL of a foreign country is treated as substantive when
limitation was directed to newly created liability so
specifically as to warrant saying that it qualified the right

Borrowing statutes
Purpose: Many states, the Philippines among others, have
passed borrowing statutes to eliminate forum-shopping.
However, in the case of Cadalin, the court said that to
enforce the borrowed statute would contravene public policy
on protection of labor.
Cadalin vs. POEA Administrator
(1994)
FACTS: Cadalin et al. instituted a class suit with the POEA
for money claims arising from their recruitment by AIBC
and BRII for pretermination of employment contracts.
Under Bahrain law where some of the complainants were
deployed, the prescriptive period for claims arising out of a
contract of employment is one year.
HELD: Even though a law on prescription may be
considered as substantial or procedural, its characterization
as either becomes irrelevant when the country of the forum
has a borrowing statute. Said statute has the practical effect

of treating the foreign statute of limitation as one of


substance. Under the ROC of the Philippines, it is provided
that if by the laws of the state or country where the cause of
action arose, the action is barred, it is also barred in the
Philippines. The Bahrain law on prescription should apply.
However, it cannot be enforced as it would contravene the
public policy on the protection to labor. Philippine law will
then be applied.

HELD: The law of the domicile ought to be applied in any


issue of incapacity to sue based upon family relationship.
The policy reason for denying the capacity to sue
(preventing family discord) more properly lies within the
sphere of family law, where domicile usually controls the law
to be applied, than it does tort law, where the place of the
injury generally determines the substantive law which will
govern.

B. Depecage
From depecer, which means to dissect.
Different aspects of a case involving a foreign element may
be governed by different systems of laws.
Von Mehren & Trautman: A man dies intestate domiciled
in state A & w/ movable properties in State B.
How will the mans estate be divided?
State A conflict rules refer to laws of domicile. Intestate law
of State B gives the widow a definite share in the estate of
deceased. But the determination of WON the woman
claiming the share is a wife is referred to family law, not
laws on succession.

The court decided that the law of the place of accident


(California) governed the issue of negligence while
Wisconsin law governed the issue of interspousal immunity.
The characterization process was taken one step further by
not limiting the classification to the case itself but likewise, to
the issue arising from the case.
The 1969 Restatement 2d adopted depecage & set out a
number of factors to be considered in choosing the
applicable law:
a.

needs of interstate & international system

b.

relevant policies of the forum

c.
Issues of law governing movable properties & successional
rights of spouse are of primary importance, embodying
substance of claim. Validity of marriage affects solution
because it answers a preliminary or incidental Q.

relevant policies of other interested states & the


relative interests of those states in the
determination of a particular issue

d.

protection of the justified expectations of the


parties

The presence of an incidental Q is one instance which calls


for the employment of depecage.

e.

the basic policies underlying the particular field of


law

f.

certainty, predictability, uniformity of results, and

g.

ease in determination & application of law to be


applied

Merits of Depecage:
This technique allows other relevant interests of parties to be
addressed. Thus, it permits courts to arrive at a functionally
sound result w/out rejecting the methodology of the
traditional approach. This nuanced single-aspect method
employs depecage by choice.

The consideration of any elements & acceptance by courts


of depecage help ease restrictions of single aspect method.
Haumschild vs. Continental Casualty
(1959)
FACTS: Haumschild and Gleason were married in
Wisconsin, their domicile. Haumschild was injured in
California while riding a motor truck driven by Gleason.
Their marriage was later annulled. An action for recovery of
damages was filed by Haumschild in Wisconsin. Continental
alleges that under California law, a spouse is immune from
suit by the other spouse.

11

Courts not compelled to apply entire law to all aspects of


casethat might produce egregious results. Cutting up the
case issue by issue is fair & reasonable.
But even if a useful tool in modern choice-of-law analysis,
the express reference to depecage in case law, both in US &
the Phil still uncommon.

2)
VII. The Problem of Renvoi
A.

the court may accept the renvoi and refer not just
to another states internal law but to the whole
law (includes choice-of-law rules applicable in
multi-state cases)

Definition

Renvoi a procedure whereby a jural matter presented is


referred by the conflict of laws rules of the forum to a
foreign state, the conflict of laws rule of which, in turn, refers
the matter to the law of the forum or a third state.

Remission: reference is made back to the law of the forum


Transmission: reference to a third state

Aznar vs. Garcia


(1963)
FACTS: The will of Edward Christensen, a domiciliary of
the Philippines, was admitted to probate, and a project of
partition was proposed. Edwards illegitimate child opposed
the project of partition on the ground that the distribution of
the estate should be governed by Philippine law. The lower
court found that Edward was a US citizen; hence the
successional rights and intrinsic validity of the will should be
governed by California.

Renvoi has been employed in cases where the domiciliary


and nationality laws are applied to the same individual in
issues involving succession, domestic relations and real
properties.

Renvoi:

State A
(RP)

State B

Art. 16
CC

Internal law
Conflict-oflaws rule

B.

Various ways of dealing with the Problem of

Renvoi

HELD: Philippine law should apply. Art. 16 of the Phil.


Civil Code provide that the national law of the decedent
governs the validity of his testamentary dispositions. Such
national law means the law on conflict of laws of the
California code, which authorizes the reference or return of
the question to the law of the testators domicile. The
conflict of laws rule in California precisely refers back the
case, when a decedent is not domiciled in California, to the
law of his domicile (the Philippines in the CAB). The Phil.
court must apply its own law as directed in the conflict of
laws rule of the state of the decedent.
3)

by desistance or mutual disclaimer of JD the


same result as the acceptance of the renvoi
doctrine but the process used by the forum court
is to desist applying the foreign law.

4)

foreign court theory the forum court would


assume the same position the foreign court would
take were it litigated in the foreign state

Disadvantage to renvoi: if both courts follow the same


4 Ways of Dealing with the Problem of Renvoi (Prof.
Griswold):
1)

if the conflicts rules of the forum court refer the


case to the law of another state, it is deemed to
mean only the internal law of that state (internal
law: that which would be applied to a domestic
case that has no conflict-of-laws complications)
rejects the renvoi

theory, there would be no end to the case since the courts


would be referring it back to each other. It gives rise to
situations that have been invariably described as resembling
revolving doors, a game of lawn tennis, a logical cabinet
of mirrors or a circulus inextricabilis.
Annesley, Davidson vs. Annesley
(1926)
FACTS: The testatrix, a British subject, was a domiciliary of
France according to British law, but not according to French
law. She made a will in English form. In the will she

12

disposed of all her property in favor of her daughter, and


stipulated that she had no intention of abandoning her
domicile in England. If she was a domiciliary of France, she
could only dispose of 1/3 of her personal property.
HELD: The domicile of the testatrix at the time of her death
was French. Applying English law, the fact of her residence
in France coupled with animus manendi showed her
intention to abandon her English domicile even if she had
not complied with the formalities required under French law
to become a French domicile.
According to French municipal law, the law applicable in the
case of a foreigner not legally domiciled in France is the law
of that persons nationality, which is British. But British law
refers the question back to French law, the law of the
domicile. And according to French law, the French courts,
in administering the movable property of a deceased
foreigner who, according to the law of his country is
domiciled in France, and whose property must, according to
that law, be applied in accordance with the law of the
country in which he was domiciled, will apply French
municipal law, even if he had not complied with the French
requirements for acquisition of domicile.

Options which the forum court may do:


a) accept the renvoi (apply forum law)
b) reject the renvoi (apply the internal law of the
foreign state)
c) desistance/mutual disclaimer
d) foreign court theory
the difficulty with the foreign court theory is that
the forum court will have to anticipate or guess
how the foreign court will act.
Renvoi is optional, based on the discretion of the
court and the facts of the case.
_______________
C.

Usefulness of Renvoi

Renvoi has been used to avoid unjust results.


University of Chicago vs. Dater
(1936)
FACTS: Mr. and Mrs. Price executed a trust deed and
promissory notes in favor of University of Chicago, for a
loan secured by Mr. Price and Mr. Dater. They were
residents of Michigan; the mortgage and the notes were also

signed there and sent by mail to Chicago. In a suit filed by


the University in Michigan against the spouses Dater and
Mrs. Price (Mr. Price having died earlier), the court ruled
that there was no cause of action against Mrs. Price, because
under Michigan law a married woman has no capacity to
enter into an obligation such as this, hence the note and trust
deed were void. The question is which law should be
applied, Michigan or Illinois law.
HELD: Under the law of Illinois, the capacity of Mrs. Price
is governed by Michigan law (as held in the similar case of
Burr vs. Beckler, where the court said that since the contract
was completed in Florida, that state governed her capacity to
contract). In this case, the contract was complete in
Michigan, and it governs her capacity to contract. Since she
was not competent to contract under Michigan law, her note
and trust deed were void.
In the Dater decision, Michigan protected the interest of a
Michigan wife especially since Illinois disclaimed any desire
in applying its law. Also, uniformity of results was promoted
in spite of discrepancies in the choice-of-law rules of the
involved states. With renvoi, the Dater decision was made
dependent on substantive law and not on the incidental law
of the forum.

Objections to Renvoi
Critics:
1)

renvoi would place the court in a perpetuallyenclosed circle form which it would never emerge
and that it would never find a suitable body of
substantive rules to apply to a particular case.
The theoretical problem presented is that renvoi is
workable only if one of the states rejects it and that
it achieves harmony of decisions only if the states
concerned do not agree on applying it the same
way.

Griswold: the objection is based on a false premise; as long


as remission is to the states internal law alone there will be a
stop to the endless chain of reference.
2)

Courts may be unnecessarily burdened with the


task of identifying the choice-of-law rules of
another state.

Pangalangan: from a practical perspective, the forum court


will not use renvoi if, in the first place, it cannot ascertain
what the conflict-of-law rules of the foreign state are.

reference back (renvoi) to Philippine law, but would still


refer to Texas law.

Inapplicability of Renvoi in a False Conflict


US Restatement (Second) of Conflict of Laws: renvoi to be
used when there is a disinterested forum, to ensure that only
the laws advancing the policies of the interested states will be
applied. If the choice-of-law rules of the state to which
reference is made refers the case back to the forum state, the
court may use this situation to determine if both states have
an interest in having their laws applied or if there is merely a
false conflict.
Pfau vs. Trent Aluminum Co.
(1970)
FACTS: Trent (a New Jersey domiciliary) agreed to drive
Pfau (a Connecticut domiciliary) to Missouri. While in Iowa,
they had a vehicular accident causing injuries to Pfau. Pfau
filed suit in New Jersey against Trent Aluminum Co.
(registered owner of the car) for the damages he sustained
while a passenger in Trents car. The defense of Trent
Aluminum was that Iowa law is applicable, which provides
that the host-driver is not liable to his passenger-guest for
ordinary negligence.
HELD: Connecticut and New Jersey law both allow
passenger-guest recovery. It appears that Connecticuts
substantive law allowing a guest to recover form his hosts
ordinary negligence would give it a significant interest in
having that law applied to this case. Since Iowa has no
interest in this litigation, and since the substantive laws of
Connecticut and New Jersey are the same, this case presents
a false conflict and the Connecticut plaintiff should have the
right to maintain an action for ordinary negligence in New
Jersey.
Bellis vs. Bellis
(1968)
FACTS: The probate of the will of Texas citizen and
domiciliary Amos Bellis was opposed by his 3 illegitimate
children in the Philippines for depriving them of their
compulsory legitime. However, the trial court ruled that
under Art. 16 of the Phil. Civil Code, the national law of the
decedent is to be applied in testamentary succession. The
law of Texas did not provide for legitimes.
HELD: Texas law should apply. The decedent was both a
national and a domiciliary of Texas, so that even assuming
Texas has a conflict of law rule providing that the law of the
domicile should govern, the rule would not result in a

13

VIII. Notice and Proof of Foreign Law


A.

Extent of Judicial Notice

It is the party whose cause of action or defense depended


upon the foreign law who has the burden of proving the
foreign law.
Foreign law is treated as a question of fact that should be
properly pleaded and proved
In the Phils., judicial notice may be taken of a foreign law
with which the court is evidently familiar. (Delgado vs.
Republic) Such familiarity may be because the law is
generally known such as American or Spanish Law from
which Phil law was derived or the judge had previously ruled
upon it in other cases.
In US, courts are allowed to take judicial knowledge of the
law of sister states.
B.

Proof of Foreign Law

Foreign law may be proved by presenting either of the ff:


1.
2.

an official publication of the law


a copy of the law attested by the officer having
legal custody of the record or by his deputy. If the
record is not kept in the Philippines, it must be
accompanied with a certificate that such officer has
the custody (by the consular officer of the Phil
embassy in said state and authenticated by his seal
of office)

Proof of documents executed abroad: any public document


executed abroad to be used in the Phils must be duly
authenticated by the Phil. consul attaching his consular seal
Depositions of non-residents in a foreign country: they may
be taken
1)

on notice before a secretary of embassy or


legation, consul general, consul, vice-consul, or
consular agent of the Phils.

2)

before such person or officer as may be appointed


by commission or under letters rogatory.

3)

before such person which the parties have


stipulated in writing

PCIB vs. Escolin


(1974)
FACTS: Case bet. the administrators of the estates of
Hodges spouses. Ws administrator sought the application of
Texas law. Hs administrator also used the Texas law but
arrived at a different conclusion.
HELD: Case remanded for parties to present proof of the
applicable Texas law. The question of what are the
applicable laws of Texas is one of fact and not of law.
Foreign laws may not be taken judicial notice of & have to be
proven like any other fact in dispute between the parties in
any proceeding with the rare exception in instances when the
laws are within the actual knowledge of the courts, such as
when:
a. they are well and generally known
b. they have been actually ruled upon in other
cases before it and none of the parties claim
otherwise
In Re Estate of Johnson
(1918)
FACTS: In the hearing for the probate of the will of J,
alleged to be made in accordance with the laws of Illinois,
TC judge took judicial notice of the said foreign law.
HELD: Trial court judge erred in taking judicial notice.

The judge cannot take judicial notice of the acts of the


Legislative Department of US particularly the various
laws of the American states.
Likewise, Phil. courts cannot take judicial notice of the
same under matters of public knowledge.
The proper rule is to require proof of the Statute
whenever it is determinative of the issue/s in Phil.
courts.

Effects of Failure to Plead and Prove Foreign Law


Forum court may:
1. dismiss the case for inability to establish cause of action

2.

apply law of the forum (courts conclude that by failing


to adduce proof, parties acquiesce to the application of
the forum law since it is the basic law)

3.

assume foreign law is the same as law of the forum


(processual presumption)

First approach: Dismiss the case


Walton vs. Arabian Oil Co.
(1956)
FACTS: Walton, US citizen, was injured in Saudi Arabia.
His complaint did not allege the Saudi Arabia law nor did he
proved the same during the trial. TC ruled in favor of
defendant as he did not take judicial notice of S. Arabian
law.
HELD: Because of failure to prove the foreign law, plaintiff
loses.
Plaintiff has the burden of proving the law of Saudi Arabia
from which he shall base his claim because under NewYork
law, where action was instituted, lex loci delicti is the
substantive la applied in tort cases.

A court abuses its discretion under the New York Civil


Practice Act if it takes judicial notice of the foreign law when
it is not pleaded esp. when the party who had the burden to
prove the same has not assisted the court in judicially
learning it.

The applicable tort principles necessary to establish


plaintiffs claim are not rudimentary. In countries where
common law does not prevail, these principles may not
exist or maybe vastly different.

Second approach: apply forum law, conclude that parties


acquiesce to its application.

Leary vs. Gledhill


(1951)
FACTS: Leary instituted this action in New Jersey to recover
the loan contracted in France against G. G moved to dismiss
on the ground that Ls proof were insufficient as there is no
pleading or proof of the law of France where the transaction
occurred.
HELD: L can recover despite failure to prove French law.
Altho the court recognizes the fact that France adopts civil
law rather than common law principles, the cause of action

14

of L may still be pursued, as there are 3 presumptions that


the court may apply in the CAB. These are:
1, French law is the same as law of the
forum
2. French law, like all civilized countries, recognizes
certain fundamental principles (taking of a loan
creates obligation to repay)
3. By failing to prove French law, parties acquiesce to
apply forum law
The third presumption does not present any difficulties for
it to be universally applied regardless of the nature of the
controversy. This is more favored by the authorities and has
been followed in Sturm v. Sturm.
In CAB, Rights of the parties are to be determined by New
Jersey laws which permit recovery on the facts proven.
Zalamea vs. CA
(1993)
FACTS: Zalamea filed action for damages against TWA.
RTC awarded actual and moral damages. CA denied award
of moral damages because there was no fining of bad faith
and because overbooking was an allowed practice in US
airlines.
HELD: CA was wrong. The US law or regulation
authorizing overbooking was not proved in accordance with
our laws.
TWA relied solely on the statement of its agent that the
Code of Fed. Regulations of Civil Aeronautics Board
allows overbooking.
No official publication of the said code was presented
as evidence.
Written law maybe evidenced by an official publication
thereof or by a copy attested by the officer having legal
custody of the record or by his deputy, accompanied by a
certificate (made by a Phil. consular officer and
authenticated by his seal of office) that such officer has legal
custody.

Third approach: processual presumption


Miciano vs. Brimo
(1924)
FACTS: Action for partition of estate of Brimo, a Turkish
citizen. Oppositor claims that proposed partition is contrary
to Turkish law but he failed to prove & present evidence on
the said Turkish law.

HELD: In the absence of evidence on foreign law, they are


to be presumed the same as those of the Phils. Oppositor,
himself, acknowledges that the foreign law was not proven
when he asked for opportunity to present evidence. He was
granted ample opportunity to present competent evidence
and there was no GAOD when the court refused to grant
him another opportunity.

Board of Commissioners vs. CID


(1991)
FACTS: Board sought the deportation of G who is alleged
to be an alien. Marriages of Gs grandfather and of Gs
father all performed in China were not properly proven.

Suntay vs. Suntay


(1952)
FACTS: A will executed in Amoy by the deceased is sought
to be allowed in the Phils. The will was allegedly recorded
and probated by a district court in Amoy.

HELD: In the absence of evidence to the contrary, foreign


laws are presumed to be the same as those of the Phils. In
CAB, there being no proof of Chinese law on marriage, the
presumption arises. The Phils. adhere to the presumption of
validity of marriage (A.220 FC) He who asserts the marriage
is not valid under our laws bears the burden of proof to
present the foreign law.

HELD: Will cannot be allowed. Silvino was unable to


adduce the necessary proof under Secs. 1-3 of Rule 78 in
order to probate the will in the Philippines, specifically:
a. the fact that the municipal court of Amoy is a probate
court
b. the procedural law of China regarding probate of wills
c. the legal requirements for the execution of a valid will
Although there were unverified answers of the Consul
General of China, his answers are inadmissible because:
a. he does not qualify as an expert on Chinese law on
probate procedure (usu. attend to trade matters), and
b. if admitted, the adverse party will be deprived of their
right to cross-examine him
Thus, in the absence of proof, it may be presumed that the
probate laws of China are the same as ours and the will in
question does not comply with our probate laws.
CIR vs. Fisher
(1961)
FACTS: Spouses Stevenson are British subjects. H dies
leaving W as sole heir. CIR assessed estate tax on the whole
properties of the spouses because English law does not
recognize conjugal partnership.
HELD: English law cannot be applied. The pertinent
English law that allegedly vests in husband full ownership of
properties acquired during the marriage was not proved by
CIR (petitioner). In the absence of proof, the Court is
justified in indulging in processual presumption in
presuming that the law of England on the matter is the same
as our law.

Only self-serving testimonies were allegedly presented. Also,


marriages are claimed to be void according to Chinese law.

In deciding whether to apply forum law or to dismiss the


case/rule against the party who failed to prove the foreign
law, court must consider the ff: factors
a.
b.
c.
d.

degree of public interest involved


accessibility of foreign law materials to the parties
possibility that plaintiff is merely forum shopping
similarities between forum law and foreign law on the
issue involved
C.

Exceptions to the Application of Foreign Law

1)

The foreign law is contrary to an important public


policy of the forum
The foreign law is procedural in nature
Issues are related to property (lex situs)
The issue involved in the enforcement of foreign
claim is fiscal or administrative
Foreign law or judgment is contrary to Good
Morals
The application of Foreign law will work
Undeniable Injustice to the Citizens of the Forum
The Foreign law is Penal in Character
The application of the Foreign law might endanger
the Vital Interests of the State

2)
3)
4)
5)
6)
7)
8)

1.

The foreign law is contrary to an


important public policy of the forum

public policy: no subject or citizen can lawfully commit


any act which has a tendency to be injurious to the public or
against the public good.
public policy technique: court declines to give due course
to a claim existing under a foreign law because it considers
the nature of the claim unconscionable or its enforcement
will violate a fundamental principle of justice, good morals
or some deep-rooted tradition.
dismissal on the ground of public policy is not dismissal on
the merits and plaintiff can go elsewhere to file his claim.
Pakistan Intl Airlines v. Ople
(1990)
FACTS: 2 Filipino stewardess-employees of PIA filed a case
for illegal dismissal against their employer in DOLE. PIAs
defense is that under the contract of employment, the parties
agreed that the EE-ER relationship shall be governed by the
contract (which provided that Pakistan law shall apply) and
not the Labor Code.
HELD: Public Interest standard was applied. Pakistan law
cannot be invoked to prevent the application of Phil labor
laws and regulations to the subject matter of the case. The
ER-EE relationship is much affected with public interest,
such that otherwise applicable Phil laws and regulations
cannot be rendered illusory by the parties agreeing upon
some other law to govern their relationship.
Also, PIA did not undertake to plead and prove the contents
of the Pakistan law on the matter; it must therefore be
presumed to be the same as applicable provisions of Phil
law.

Criticisms: courts using public policy exception can disregard


the applicable law reached and replace it with forum law to
arrive at its desired result without having to provide the
rigorous legal analysis required to explain the shift. Courts
engage in intolerable affectation of superior virtue.

These exceptions fall under 3 main categories:


1: when local law expressly so provides
2: when there is failure to plead and prove the foreign
law or judgment
3: when the case falls under the exceptions to the rule
of comity

15

2.

The foreign law is procedural in nature

Procedural or remedial laws are purely internal matters


peculiar only to the State. It would be impractical for the
court to adopt the procedural machinery of another state
such as rules on venue, forms and pleadings. Any individual

who submits himself to the jurisdiction of the law of the


forum must follow the forums rules of procedure.

ex. Hiring for killing, bribery of public officials,


marriage between ascendants and descendants

Problem: courts are tasked to characterize the problem as to


whether it is substantive or procedural law which can be
difficult at times, ex. If issue involves statute of limitations or
statute of frauds

6.

The application of Foreign law will work


Undeniable Injustice to the Citizens of
the Forum

Law of nationality first used in Napoleon Code, then in


Austrian Code, which said that laws concerning states &
capacity govern all cities irrespective of residence.

Merits & Demerits of Nationality as Personal Law


Merits:

3.

Issues are related to property (lex situs)

7.

The universally-accepted rule is that as to immovable


property, it is governed by the law of the place where it is
located.

Statute is not penal not by what the statute is called by the


legislature but whether it appears, in its essential character
and effect, a punishment of an offense against the public.

Phil Civil Code also applies lex situs to personal property. It


also applies to cases of sale, exchange, barter, mortgage or
any other form of alienation of property.

Penal statutes are all statutes which command or prohibit


certain acts, and establish penalties for their violation and
even those which, without expressly prohibiting certain acts,
impose a penalty upon their commission. Revenue laws are
not classed as penal laws although there are authorities to the
contrary.

WHY? 3 reasons:
a. land & its improvements are within the exclusive
control of the State & its officials are the ones who
can physically deal with them
b. following a policy-centered approach, immovables
are of greatest concern to the state in which they
are situated
c. demands of certainty & convenience

The issue involved in the enforcement


of foreign claim is fiscal or
administrative

State is not obliged to enforce the revenue law of another.


Revenue laws affect a state in matters as vital to its interests
as penal laws. No court ought to hear a case which it cannot
prosecute without determining whether these laws are
consonant with its own notions of what is proper.

The application of the Foreign law


might endanger the Vital Interests of the
State

5.

Foreign law or judgment is contrary to


Good Morals

contra bonos mores - acts having mischievous or


pernicious consequences or against true principles of
morality.

2) an individuals nationality is easily verifiable


from documents.

Demerits:
Problems arise with regard to:
a. stateless persons
b. persons with multiple nationalities
c. states w/ diverse legal systems having no single
national law
2)

a persons ties to his nation may be so attenuated


if he has lived in another country.
- unreasonable for his national law to govern him
if he has no shared sense of identity.

PART THREE: PERSONAL LAW

Importance of Nationality in the Philippines


IX. Nationality
Most civil law countries follow the national law theory.
A. Importance of a Personal Law

Opposition to exception: person should not be permitted to


escape his obligations in maintaining the government by
crossing state lines.

-since laws considered physical, moral qualities of


citizens, laws should apply to citizens wherever
they are

1)

This exception is partly remedied under the international


law of extradition on the basis of jurisdictional cooperation
and assistance.

8.
4.

1) used to establish link b/w individual & state,


because laws of each state presumed to be made
for an ascertained population .

The Foreign law is Penal in Character

The individuals nationality or domicile serves as permanent


connection b/w individual & state. Thus, what is assigned
him is a personal law allowing courts to exercise jd or
determine the governing choice-of-law rule on a specific
situation or transaction involving him.
Personal law follows the individual. It governs transactions
affecting him most (marriage, divorce, legitimacy, capacity to
contract).
The need for personal law arose w/ Italian Medieval city
states. Domicile was the only relevant basis for personal law.

16

Phil SC: Nationality law theory is a conflict of laws theory by


virtue of which JD over the particular subject matter affecting
a person, such as status of a natural born person, is
determined by the latters nationality.
Art 15 CC expresses the nationality principle.
Art 15: Laws relating to family rights & duties, or to status,
condition & capacity of persons are binding upon citizens of
the Philippines even though living abroad.
This notion that a persons private rights should be
determined by his political allegiance & not by his physical

location, owes its origin to the awareness of national identity


born in the French revolution,
B.

Determination of Nationality

Each state has prerogative to determine who are its nationals


or citizens by its own municipal law.
The Hague Convention on Conflict of National laws: It is
for each state to determine who are its nationals. This shall
be recognized insofar as consistent w/ intl. convention, intl.
customs, & the principles of law generally recognized w/
regard to nationality.
Art 2. Hague Convention: Question on possession of
nationality of a particular state shall be determined in
accordance w/ the law of that state.

Talaroc vs. Uy
(1952)
FACTS: Uy was elected mayor of Manticao, but one of the
defeated candidates filed a petition for quo warranto,
alleging that Uy was a Chinese citizen and therefore
ineligible for the office.
HELD: Uy is a Filipino citizen, following the citizenship of
his mother, who reacquired her Filipino citizenship upon
the death of her Spanish husband. A wife reverts to her
former status upon dissolution of the marriage by the death
of her husband, and where the widowed mother herself thus
reacquired her former nationality, her children (she being
their natural guardian) should follow her nationality with the
proviso that they may elect for themselves upon reaching
majority.

Qualifications for Applicants for Naturalization


1)

Petitioner must not be less than 21 years of age on


date of hearing of petition

2)

He must have, as a rule, resided in the Philippines


for a continuous period of not less than 10 years
o

So government can observe applicants


conduct & ensure he imbibes principles
& spirit of our Constitution.
o

a)

Who are Filipino citizens? (Philippine Constitution, Art IV)


1) Those who are citizens of Philippines at time of
the adoption of this Constitution
2) Those whose fathers or mothers are citizens of
the Philippines
3) Those born before January 17, 1973, of
Filipino mothers, who elect Philippine citizenship
upon reaching the age of majority; and
4) Those who are naturalized in accordance w/ law

1. Natural-born Citizens
Two principles w/c may be followed:

Co vs. Electoral Tribunal of the House of Representatives


(1991)
FACTS: Ong Jr. ran as representative of the 2 district of
Samar and was proclaimed the winner. The losing
candidates filed election protests, claiming that Ong Jr. was
not a natural-born citizen.
nd

HELD: Ong Jr. is a natural-born Filipino. He could not


have been expected to have formally or in writing elected
citizenship upon reaching majority, because he was already a
citizen. His mother was a natural-born citizen, and his father
was naturalized when Ong Jr. was only 9 years old. The filing
of a sworn statement or formal declaration is a requirement
for those who still have to elect citizenship. For those already
Filipinos when the time to elect came up, there are acts of
deliberate choice which cannot be less binding. Election is
both a formal and an informal process, and it has been held
that participation in election exercises constitute a positive
act of election of Philippine citizenship.

jus soli: looks to the law of the place of ones birth to


determine ones nationality (followed in many common law
countries).

2.

Citizens by Naturalization

jus sanguinis: rule of descent or blood. Followed in the


Philippines, articulated in the Constitution.

Naturalization confers to an alien a nationality after birth by


any means provided by the law.

Natural born citizens: citizens of the Philippines from birth


w/out having to perform any act to acquire or perfect
citizenship.

In the Philippines, naturalization is by judicial method,


under CA 473, as amended RA 530.

Concept broadened by the Constitution to include those


born before January 17, 1973, of Filipino mothers, who elect
Philippine citizenship upon reaching the age of majority.

The naturalization process was relaxed under Marcos


regime. Liberal method, summary inquiry. This, however, is
no longer in force.

17

Why the 10 yr residence requirement?

b)
c)
d)

e)

When may period be reduced to 5


years?

applicant honorably held office under the


Phil govt. or under any of its political
subdivisions
applicant has established a new industry or
introduced a useful invention in the Phil
Married to a Filipino woman
Engaged as teacher in a public or recognized
private school not for exclusive instruction of
children of persons w/ particular nationality
in any of the branches of education for a
period of 2 years
Born in the Philippines

3) Must be of good moral character,


& believe in the principles underlying the Phil
Constitution &
must have conducted himself in a proper &
irreproachable manner during entire period of
residence here in his relations w/ the constituted
government as well as w/ the community in w/c he is
living
o

Proper & irreproachable imposes a


higher standard of morality than good
moral character

How
to
prove
irreproachable
conduct? By competent evidence such
as testimony of 2 character witnesses
well known in community w/ high
reputation for probity.

The law requires moral character of highest degree. Being


merely a law-abiding citizen is inadequate.

4)

excluding from the ban the alien vendee who later


becomes a naturalized Filipino

Must own real estate in the Phil worth not less


than P5,000, Phil currency, or must have lucrative
trade., profession, or lawful occupation

Yu Kian Chie vs. Republic


(1965)
FACTS: Yu Kian Chie, a Chinese national, applied for
naturalization, but the Solicitor General opposed the
petition on the ground that Yu failed to prove that he had a
lucrative income.

5)
6)

HELD: The petition should be denied. His true income


(outside of allowances and bonuses which are merely
contingent) is only P150 a month, which amount does not
come up to the category of lucrative, especially considering
that he is a married man.
o

What does lucrative trade, profession, or


lawful occupation mean?

Substantial gainful employment or the obtaining of


tangible receipts

Additional exceptions thru judicial decisions have


been criticized for inviting violation of the
Constitution & disregarding a fundamental policy
of allowing no one to reap benefits from an
unlawful act.

Must be able to speak & write English or Spanish


& any one of the principal Philippine languages
Must have enrolled his minor children of school
age in any of the public schools or recognized
private schools where Phil history, government &
civics are taught
or prescribed as part of
curriculum during entire period of residence
required of him, prior to hearing of his petition for
naturalization as citizen.
Children must learn & imbibe customs, traditions
& ideals of Filipinos so theyll become law-abiding
citizenship.

lucrative employment: appreciable margin of

income over expenses in order to provide for


adequate support for himself & his family in case
of sickness, unemployment, disability to work.

Compliance & affirmative showingotherwise,


denied.

Non-compliance because of insufficient finances:


denied.

4) if it is not fully established that applicants nation


grants reciprocal rights to Filipino citizens
C. Procedure for Naturalization
The following are the steps for naturalization:
a)

a declaration of intention to become a citizen must


first be filed, unless the applicant is exempted
from this requirement (Secs. 5 and 6, Com. Act
No. 473).

b)

The petition for naturalization must then be filed


(Sec. 8, Com Act No. 473)

c)

After publication in the Official Gazette or


newspaper of general publication the petition will
be heard (Sec. 9, Com. Act No. 473 as amended)

d)

If the petition is approved, there will be a


rehearing two years after the promulgation of the
judgment awarding naturalization (Sec. 1, Rep.,
Act No. 530)

e)

The last step will be the taking of the oath of


allegiance to support and defend the Constitution
and the laws of the Philippines (Sec. 11, Com. Act
No. 473, amended)

Requirement of ownership of real property:


At odds w/ Art XII, Sec. 7 Phil Constitution:
Save in cases of hereditary succession, no
private lands shall be transferred or conveyed
except to individuals qualified to acquire or
hold lands of the public domain.

3) applicants conduct of keeping wife and children in a


neighboring country and only visiting them (lack
of sincere desire to embrace Filipino customs and
traditions)

Exceptions to prohibition on ownership of


land:

a) Save in cases of hereditary succession,


no private lands shall be transferred or conveyed
except to individuals qualified to acquire or hold
lands of the public domain - Testamentary
succession is not covered by the exception
provided in the Constitution.
b) Sec. 2, BP 185 allowing a naturalborn citizen who lost his Filipino citizenship to be
a transferee of a private land for residential
purposes (not in excess of 1,000 sq. m. urban or 1
ha rural land)
c) SC broadened exception to
prohibition by applying In Pari Delicto doctrine,

Disqualification for Naturalization


General Rule: Burden of proving disqualification is upon the
state.
But SC held that petitioner must prove he has none of
disqualifications.

Declaration of Intention

naturalization is a privilege, not a right.

When: One year before petition is filed


With whom: File with office of the Solicitor
General
How: Declaration under oath of bona fide intention to
become Philippine citizen

Possible causes for Disqualification:


1) crime involving moral turpitude (act of bareness,
vileness, depravity in private and social life in
general; contrary to conduct of honesty, modesty
or good morals)

Exemptions to Filing of Declaration of Intention:

The law must be strictly construed against applicant because

2) if applicant does not deal with and receive Filipinos


in his home and visit Filipino homes in a spirit of
friendship and equality without discrimination

18

1)

persons born in the Philippines and who have


received their primary and secondary education in
public or private schools recognized by the
Government, and not limited to any race or
nationality

2)

those who have resided continuously in the


Philippines for a period of thirty years or more
before filing their application

3)

the widow and minor children of an alien who


declared his intention to become a citizen of the
Philippines and dies before he is actually
naturalized.

Requirement is mandatory, absolute prerequisite to


naturalization. Failure is fatal. Void for noncompliance with
law.

Vivo vs. Cloribel


(1968)
FACTS: Chinese wife, Chua and her minor children arrived
in the Phils from Hkong. Her husband applied for
naturalization in the Phils. Wife and children applied for
indefinite extension of stay. Sec of Foreign Affairs allowed
the change of their status from temporary visitors to special
non-immigrants for 2 years. Commissioner of Immigration
refused their extension. The Foreign Affairs Sec. denied
their appeal and they were advised to leave the Phils. Chua
filed action for mandamus to implement the first ruling of
the Secretary but this was denied. Chua efilled alleging that
her husband will be granted Filipino citizenship so they were
also due for eventual conversion.

Watt vs. Republic: In cases where petition is exempt,


statement to his exemption and reasons should appear on
the petition so the public maybe prepared to object to any
evidence on this regard.
Which court has jurisdiction?
RTC of province has exclusive jurisdiction on which
petitioner has resided for at least one year immediately
preceding filing of person.

Effect of Naturalization on Wife and Children


Section 15, C.A. 473 states that::
Any woman who is now or may hereafter be married to a
citizen of the Philippines, and who might herself be lawfully
naturalized shall be deemed a citizen of the Philippines.
Minor children of persons naturalized under this law who
have been born In the Philippines shall be considered
citizens thereof.
A foreign-born minor child, if in the Philippines at the time
of naturalization of the parent, shall automatically become a
Philippine citizen, and a foreign-born minor child, who is
not in the Philippines at the time the parent is naturalized,
shall be deemed a Philippines citizen only during his
minority, unless he begins to reside permanently in the
Philippines when still a minor, in which case, he will
continue to be a Philippine citizen even after becoming of
age.
A child born outside of the Philippines after the
naturalization of his parent shall be considered a Philippine
citizen, unless within one year after reaching the age of
majority, he fails to register himself as a Philippine citizen at
the American Consulate of the country where he resides,
and to take the necessary oath of allegiance.

HELD: The wife, under Sec. 15 of the Revised


Naturalization Law, will not automatically become a Filipino
citizen upon her husbands naturalization as she must still
show that she possesses all the qualifications and none of the
disqualifications for naturalization. But her having
misrepresented that she will stay for a brief period but her
intention was really to stay for a long time, demonstrated her
incapacity to satisfy the qualifications under Sec. 2 which
provides that she must be of good moral character and must
have conducted herself in a proper and irreproachable
manner during the entire period of her stay. She also failed
to satisfy the requirement of continuous residence for 10
years in the Philippines (actual stay: Oct. 16 60 June 62)
As to the children: The law requires that they must be
dwelling in the Philippines at the time of the naturalization
of the parent. Since prior to their fathers naturalization, they
were already required to leave the country, they cannot be
said to be lawfully residing here.
Also, they cannot be allowed to extend their stay. The
period of stay of temporary visitors cannot be extended
without first departing form the Islands. They cannot also
claim that they should be allowed extension until the fathers
oath taking because their allowed stay was for a definite
period up to a fixed day.
Moy Ya Lim vs. Commissioner of Immigration
(1971)
FACTS: In 1961, Lau, a Chinese, was permitted to stay in
the Philippines for 1 month to visit her grandfather. After
repeated extensions, she was allowed to stay until Feb. 1962.
However, on Jan. 1962 she married a Filipino.
Commissioner ordered her to leave and sought her
deportation. Spouses filed appeal in SC.

19

HELD: Under Sec. 15 of CA 473, an alien woman marrying


a Filipino, native born or naturalized, becomes ipso facto a
Filipina provided she is not disqualified to be a citizen of the
Phils under Sec. of the same law. Likewise, an alien woman
married to an alien who is subsequently naturalized here
follows the Philippine citizenship of her husband the
moment he takes his oath as Filipino, provided, that she
does not suffer from any of the disqualifications under Sec.
4.
This ruling reversed a prior decision of the SC (Burca vs.
Republic) which held that the alien woman married to a
Filipino must first file a petition for citizenship alleging that
she possesses all the qualifications and none of the
disqualifications mandated by law.

No Judicial Declaration of Philippine Citizenship


A declaration of Phil citizenship may not be granted in an
action for declaratory relief nor under the Civil Code
provision (Art. 412) on correction of entry in the Civil
Registry.
But the rule was relaxed in later decisions. A petition for
correction of errors in the entry of the Civil Registry even for
a change of citizenship or status may be granted provided
that an appropriate action is made wherein all parties who
may be affected by the entries are notified and represented
and there is a full blown adversary proceeding.

Tan Yu vs. Republic: There can be no action or proceeding


for the judicial declaration of the citizenship of an individual.
D. Loss of Philippine Citizenship
CA 63, as amended by RA 106, provides that a Filipino
citizen may lose his citizenship in any of the following ways:

1) Naturalization in foreign countries


Frivaldo vs. COMELEC
(1989)
FACTS: Frivaldo was elected governor of Sorsogon and
assumed office. The League of Municipalities of Sorsogon
filed for annulment of his election on the ground that he is a
US citizen and therefor incapable of holding public office.
Frivaldo admitted that he was a naturalized US citizen in
1983 but he underwent naturalization only to protect himself
from then Pres. Marcos. Sol Gen supported respondents
contention that he is a US citizen because he did not
repatriate himself after his naturalization in the US

HELD: Frivaldo lost his Filipino citizenship. If Frivaldo


really wanted to disavow his US citizen citizenship &
reacquire Phil. citizenship, he must do so under our laws.
Under CA 63, Phil. citizenship may be reacquired through:
1.
2.
3.

direct act of Congress


naturalization
repatriation

The alleged forfeiture of US citizenship because of his active


participation in the elections is between him and the US; it
could not have resulted to automatically restoring his
Filipino citizenship which he earlier renounced. At most, he
could be said to be a stateless individual. Also, although the
Special Committee to hear repatriation cases under LOI 270
has not yet been convened, F should have waited for such or
seek naturalization by legislative or judicial process.
Frivaldo vs. COMELEC
(1996)
FACTS: Frivaldo took his oath of allegiance under PD 725
on June 30 95, much later than he filed his certificate of
candidacy. He now claims Filipino citizenship through a
valid repatriation
HELD: Frivaldo reacquired his Filipino citizenship and is
now eligible to assume the office as governor. Law does not
specify any particular date or time when candidate must
possess citizenship unlike that of residence and age. It can
also be said that Frivaldos repatriation retroacted to the date
of his filing his application in Aug. 1994.
Labo vs. COMELEC
(1989)
FACTS: Labo was elected mayor of Baguio. Lardizabal filed
a petition for quo warranto alleging that Labo is not a
citizen.COMELEC declared that he was a citizen but the
CID ruled that he is not since the Australian Govt said that
he is still a naturalized Australian citizen.
HELD: Labo is not a citizen of the Phils because he lost the
same by performing the ff acts under CA 63:
1. naturalization in a foreign country
2. express renunciation of citizenship
3. subscribing to an oath of allegiance to support the
Consti and laws of a foreign country.
Even if it is to be assumed that his naturalization was
annulled because his marriage to an Australian was found to
be bigamous, this does not automatically restore his
citizenship. He must reacquire it by direct act of Congress,

by repatriation or by naturalization. None of these methods


were done. Under PD 725, repatriation may be done by
applying with the Special Committee on Naturalization and
if the application is approved, applicant must make an oath
of allegiance to the Republic of the Phils before a certificate
of registration is issued by the CID.

a)

if it shown that said naturalization certificate was


obtained fraudulently or illegally;

b)

if the person naturalized shall, w/in the 5 yrs next


following the issuance of said certificate, return to
his native country or to some foreign country &
establish his permanent residence there;

2) Express renunciation of citizenship


Aznar vs. COMELEC
(1990)
FACTS: Osmea filed a COC for provincial governor of
Cebu but was declared ineligible (upon petition of Aznar)
for being a US citizen, as shown by an Alien Certificate of
Registration. Osmea alleges that he is a Filipino citizen
being the child of a Filipino, holder of a Phil. passport, a
resident of the Phils. since birth, and a registered voter.
HELD: Osmea is a Filipino citizen. Aznar failed to present
proof that O lost his citizenship by any of the modes under
CA 63; he merely relied in the Alien Certificate of
Registration in concluding that O has been a naturalized US
citizen. Phil. courts are only allowed to determine who are
Filipino citizens, but have no power to determine who are
persons considered as American citizens under US laws.
Also, the mere fact that he has an ACR does not mean that
he is no longer a Filipino; the renunciation needed to lose
Phil. citizenship must be express.

3) By subscribing to an oath of allegiance to


support the constitution or laws of a foreign
country upon attaining twenty one years of age or
more, subject to certain exceptions
4) by rendering service to, or accepting
commission in, the armed forces of a foreign
country, subject to certain exceptions

Provided that the fact that person naturalized remain


for 1 year in his native country of former nationality, or
2 years in any country, shall be considered as prima
facie evidence of his intention of taking up his
permanent residence therein
c)

If the petition was made on an invalid declaration


of intention

d)

If it is shown that the minor children of the person


failed to graduate from recognized public or
private high school where the required subjects are
taught, through the fault of the parents either by
neglecting to support or by transferring them to
another school.

Certified copy of decree canceling certificate forwarded


to the Office of the President & the Solicitor General.
e)

If it is shown that the naturalized citizen allowed


himself to be used as dummy in violation of the
Constitution or law requiring Philippine
citizenship as a requisite for exercise, use or
enjoyment of a right, franchise or privilege.

Only a Grant of Political Privilege:

5) by having been declared by competent


authority, a deserter of the Philippine armed
forces in time of war, unless subsequently, a
plenary pardon or amnesty has been granted

Judgment directing issuance of certificate of naturalization is


a mere grant of political privilege. Neither estoppel nor res
judicata may be invoked to bar the state from initiating an
action for cancellation or nullification of certificate of
naturalization issued.

6) in the case of a woman, upon her marriage to a


foreigner, if by virtue of the laws in force in her
husbands country, she acquires his nationality

If shown to have been obtained by fraud or illegal means,


the certificate may be cancelled. Decision in naturalization
case does not constitute res judicata.

7) cancellation of the certificate of naturalization

Republic vs. Li Yao


(1992)
FACTS: Li Yao was a naturalized Filipino citizen, but the
Sol Gen filed a petition to cancel his certificate of
naturalization on the ground that he obtained such certificate

The Judge may cancel the naturalization certificate issued


and the registration in the Civil Registry, upon motion made
in proper proceedings by Sol Gen, on any of the following
grounds:

20

through fraudulent means. One of the grounds was tax


evasion.
HELD: A certification of naturalization may be cancelled if
it was subsequently discovered to have been obtained by
misleading the court upon any material fact. And a
naturalization proceeding is not a judicial adversary
proceeding, such that a decision therein is not res judicata as
to any matter that would support a judgment canceling a
certificate of naturalization on the ground of illegal or
fraudulent procurement thereof.

In determining rights of an individual who may claim


multiple nationality in a third state, the ICJ applied principle
of effective nationality.

2.

Statelessness

Understood in two senses:

Nottebohm Case
(1955)
FACTS: Liechtenstein brought a case against Guatemala in
the ICJ for breach of its obligations under international law
and asking for reparations in behalf of Nottebohm. It is the
position of Liechtenstein that Nottebohm acquired
Liechtenstein citizenship which would entitle him to its
diplomatic protection.

a)

HELD: Liechtenstein is not entitled to extend protection to


Nottebohm, because when N applied for naturalization,
there is nothing to indicate that such application was
motivated by any desire to dissociate himself from the
Government of his country, Germany. He had been settled
in Guatemala for 34 years, and it was the main seat of his
interests and business activities.

b)

De jure stateless person: refers to an individual


who has been stripped of his nationality by his
own former government w/out having opportunity
to acquire another.
Problem of statelessness began during WW II &
worsened under Nazi regime in Germany & in
USSR.

E. Problems in Applying the Nationality Principle

1.

Dual or Multiple Citizenship

Each state determines who its nationals are in accordance w/


the rule in the Hague Convention on Conflict of National
Laws.
Questions on WON a person possesses the nationality of a
certain state are to be determined in accordance w/ the
states internal law.
It is possible that a person can be claimed as national of 2 or
more states.
Situations w/c may result to dual nationality:
Application of jus soli & jus sanguinis

In contrast, his actual connections with Liechtenstein were


extremely tenuous. No settled abode and no prolonged
residence at the time of application; the application shows
that he was a mere visitor and his visit is of a transient
character. There is an absence of any bond of attachment
between N and L and, on the other hand, the existence of a
long-standing and close connection between him and G, a
link which his naturalization in no way weakened.

De facto stateless person: individual possessed of a


nationality but whose country does not give them
protection outside their own territory.
- commonly called refugees.

Vietnam War: Masses of people escaped from Vietnam,


Cambodia, and Laos without any travel documents, identity
papers or any form of identification normally granted by
government.

Conventions to Alleviate Problems of Stateless Persons:


1) 1951 Geneva Convention on Status Refugees
-provided some basic rights of stateless persons

1) Child born of
o parents who are nationals of country
applying jus sanguinis
o in a country applying jus soli
has dual nationality
2) Filipino citizen who marries an alien may
acquire citizenship of his or her spouse if the
spouses national law so allows.
But a Filipino citizen who marries an alien shall retain
Philippine citizenship, unless by his or her act or omission,
he is deemed under the law, to have renounced it by taking
an oath of allegiance to the spouses country or by express
renunciation.
3) Another instance of dual or multiple nationality
is the case of an individual who is naturalized
citizen of another state but has not effectively
renounced his former nationality.

Oh Hek How vs. Republic


(1969)
FACTS: Oh Hek How, a Chinese citizen, applied for
naturalization in the Philippines which was granted. A
certificate of naturalization was issue in his favor but the
Government appealed, claiming that it was issued before the
Minister of the Interior of Nationalist China issued the
permission for a valid renunciation of Chinese citizenship.
Oh Hek How argues that such permission is not among the
requirements under our law for the naturalization of an
alien.

2) 1954 UN Conference on the Elimination or


Reduction of Future Statelessness
3) Convention on the Reduction of Statelessness
- enumerates conditions under w/c an individual would
not lose his or her nationality upon the risk of becoming
stateless should a new nationality not be proved: i.e. divorce,
adoption, naturalization, expatriation.
Convention also prohibits states from depriving nationals of

identity:
HELD: The permission of the Minister of the Interior of
China is required before a certificate of naturalization can be
issued in favor of Oh Hek How. The question of how a
Chinese citizen may strip himself of that status is necessarily
governed by the laws of China, not that of the Philippines.
As a consequence, a Chinese national cannot be naturalized
as a citizen of the Philippines, unless he has complied with
the laws of China requiring previous permission of its
Minister of the Interior for renunciation of nationality.

21

1)
2)

as punishment or
as discriminatory instrument for political, religious
or ethnic reasons

Major objective: Remedy situation of children born w/out


acquiring any nationality, i.e. when a child is born in a
country following jus sanguinis principle of parents who are
citizens of a jus soli country.

Convention mandates that:


*jus sanguinis country grant its nationality to a person born
w/in its territory if he would otherwise be stateless.
*jus soli country to extend its nationality to a person who
would otherwise be considered stateless when one of his
parents is a citizen of the contracting state.
Kookooritchkin vs. Solicitor General
(1948)
FACTS; Kookooritchkin, a native-born Russian who claims
to be a stateless refugee, filed a petition for naturalization.
The petition was granted, for which the SolGen appealed,
saying that Kookooritchkin is not a stateless person.
HELD: K is a stateless person. His testimony, aside from
being uncontradicted, is supported by the well-known fact
that the ruthlessness of modern dictatorships has scattered
throughout the world a large number of stateless refugees or
displaced persons, without country and without flag.
Knowing the history, nature and character of the Soviet
dictatorship, it would be technically fastidious to require
further evidence of Ks claim that he is stateless than his
testimony that he owes no allegiance to the Russian
Communist government and, because he has been at war
with it, he fled from Russia to permanently reside in the
Philippines.

A person may live in a place where he is not domiciled. To


acquire a domicile, there must be concurrence of
1) intention to make it ones domicile and
2) physical presence.
Residence simply requires bodily presence. It is a
relatively more permanent abode of a person, while
residence applies to a temporary stay of a person in a given
place (Koh vs. CA).

Domicile is permanent in nature; it is not as transient and


temporary as residence.
2 Requisites for domicile:
1) physical presence
2) intent actual intent, not merely floating intent
In order to establish new domicile, it is not
necessary to prove intent to stay indefinitely, as
long as the intent to abandon the old domicile is
apparent.

In domicile of choice, intent is important

In constructive domicile, there is no intent


because the domicile is chosen by the law for the
person

The motive for leaving and the length of stay in


the new domicile is not relevant in the
determination of domicile of choice

X. Domicile
A.

Definition

Municipal law concept of domicile (Art. 50, CC):

natural persons: the place of habitual residence


juridical persons: determined by the law creating or
recognizing it; and in its absence shall be understood as the
place where their legal representation or place of business is.
Conflict-of-laws definition of domicile (Restatement): the
place with which a person has a settled connection for
certain legal purposes, either because his home is there or
because that place is assigned to him by law.
Justice Story: the place of true, fixed permanent home and
principal establishment, and to which, whenever he is
absent, he has the intention of returning.

Habitual residence: bridge between residence


and domicile
_______________
Caasi vs. CA
(1990)
FACTS: Miguel ran for mayor of Bolinao and won. His
opponent filed a petition for disqualification, alleging that
Miguel is a green card holder and hence, a permanent
resident of the US and not of Bolinao.
HELD: Miguels possession of a green card disqualified him
from running for mayor. His application for immigrant
status and his possession of a green card are conclusive
proof that he is a permanent resident of the US despite his
occasional visits to the Philippines.
A candidate who is a green card holder must have waived his
status as a permanent resident or immigrant of a foreign
country in order to be qualified to run for elective office in

22

the Philippines. In this case, there is no proof that he had


waived his status as a permanent resident or immigrant of
the US before he ran for election as mayor of Bolinao;
hence he was disqualified to run for that office.
Uytengsu vs. Republic
(1954)
FACTS: Uytengsu was born in the Philippines of Chinese
parents. He went to the US to study; but in one of his
vacations in the Philippines he applied for naturalization,
during the pendency of which he returned to the US to
finish his studies. Upon his return, his application was
granted; the Government appealed the grant because under
the law an applicant for naturalization is required to reside
continuously in the Phils. from the date of filing of the
petition up to the time of his admission to Philippine
citizenship. Uytengsus defense is that since he has been
domiciled in the Philippines during the period of his
application, he was also a resident for that period.
HELD: Residence and domicile each has, in strict legal
parlance, a meaning distinct and different from each other.
The essential distinction between resident and domicile is
this: the first involves the intent to leave when the purpose
for which he has taken up abode ceases, while the other has
no such intent, the abiding is animo manendi. They are not
to be held synonymous; residence is an act, while domicile is
an act coupled with intent. The question of domicile is not
involved in determining whether a person is a resident of a
state or country.
B.

Merits and Demerits of Domicile

Merits:
1)

preferred primary connection between a person


and a state because it satisfies the very purpose for
having a personal law (in common law countries)
it provides an adequate basis for him to exercise
rights therein and the state to impose duties on
him

2)

also suitable for countries with a federal system of


government the law of the domicile is the law of
the place where the individual lives

Demerits:
ones domicile is not ascertainable without first
resorting to the courts to establish whether or not
there is animo manendi

FACTS: Imelda Marcos filed her Certificate of Candidacy


for representative of 1 District of Leyte. A petition to
disqualify her was filed on the ground that she lacked the 1yr resident requirement as provided for in the Constitution.
In her COC, she placed 7 months as length of residence.

the notion of domicile differs widely in different


states (some distinguish between domicile and
residence; others attribute different meanings of
domicile for different purposes)

HELD: For purposes of election law, residence is


synonymous with domicile. Mere absence of an individual
from his permanent residence without the intention to
abandon it does not result in a loss or change of domicile.

if the law of domicile of origin is given overriding


significance, it may create the problem of
attenuated connection (similar to the use of
nationality as personal law)

While Marcos held various residences for different purposes


during the past four decades, none of these purposes
unequivocally point to an intention to abandon her domicile
of origin in Tacloban, Leyte. She did not lose her domicile
of origin upon her marriage to Pres. Marcos; what she
gained was actual residence.

D. Kinds of Domicile

st

1)

2)

3)

The Philippines follow the nationality law theory, but there


are instances when our courts refer to the domicile of an
individual in order to determine his rights or obligations.
Example is
1) when the litigant is an alien whose country of origin
follows the domiciliary principle; or
2) where the situation concerns stateless persons, or
those with dual or multiple nationalities; or
3) when an alien domiciled in the Philippines executes
a will abroad.
C.

General Rules on Domicile

1)

No person shall be without a domicile; his


domicile of origin prevails until the acquisition of a
new one.

2)

A person cannot have two simultaneous domiciles


(a person can have only one domicile for a given
purpose or a given time under the law of a
particular state, but it should not be assumed that
that determination will be binding on other states
or on the same state for other purposes).

3)

Domicile establishes a connection between a


person and a particular territorial unit.

4)

The burden of proving a change of domicile is


upon whoever alleges that a change has been
secured.
Romualdez-Marcos vs. COMELEC
(1995)

Ujano vs. Republic


(1966)
FACTS: Ujano was a naturalized US citizen who returned to
the Philippines as a visitor and petitioned to reacquire
Philippine citizenship. The petition was denied because he
did not have the required residence.

3 Kinds of Domicile:
1)

Domicile of origin: a persons domicile at birth. A


legitimate childs domicile is that of his father,
while an illegitimate childs is that of his mother.

2)

Domicile of choice: also called voluntary domicile,


is the place freely chosen by a person sui juris.
There must be concurrence of physical presence
in the new place and unqualified intention to
make that place ones home.

A problem deciding the issue of domicile of choice is the


degree of permanence of abode.
Difference between domicile of origin and domicile of
choice: lies in a) conditions necessary for abandonment and
b) capacity for revival.

Reverter or revival doctrine: presumption that domicile of


origin revived once the domicile of choice is given up,
before a new one is required.

HELD: Residence, for naturalization purposes, has been


interpreted to mean the actual or constructive permanent
home or domicile. He cannot be said to have established his
domicile here although he is actually present because his
allowed stay as a visitor is only temporary and he must leave
when the purpose of his coming is done.

Velilla vs. Posadas


(1935)
FACTS: Velilla, the administrator of the estate of Moody,
appealed the inheritance tax assessed against the estate on
the ground that the decedent was not domiciled in the
Philippines. Moody went to Calcutta and Paris before his
death, and he died in India.

In re Dorrances Estate
(1932)
FACTS: Dorrance was born in Pennsylvania. He worked
and resided in New Jersey, transferred to Philadelphia and
then returned to New Jersey. Later he was able to buy an
estate in Pennsylvania, where he stayed with his family until
his death. During his lifetime he expressed that he intends to
remain a domiciliary of New Jersey. Pennsylvania assessed
inheritance tax on his estate.

HELD: He was a domiciliary of Manila. Domicile in the


Civil Code is defined as the place of habitual residence,
which was Manila in the CAB. There was no statement from
Moody, oral or written that he adopted a new domicile while
he was absent from Manila. To establish abandonment, he
must show his deliberate and provable choice of new
domicile coupled with actual residence and declared or
proved intent that it should be his permanent abode. This
was not proven.

HELD: He was domiciled in Pennsylvania at the time of his


death. A man cannot retain a domicile in one place when he
has moved to another, and intends to reside there for the
rest of his life, by any wish, declaration or intent inconsistent
with the facts of where he actually lives and what he means
to do.

23

White vs. Tennant


(1888)
FACTS: White and his wife lived in West Virginia, but
agreed to sell their house there with the declaration, intent
and purpose of making Pennsylvania their home. Upon
reaching Penn., they had to go back to West Va. on account
of the wifes illness but White went to Penn. everyday to

look after his stock. Upon his death, the administrator paid
the whole of the estate to the widow according to West Va.
law. However, if Penn. law was applied, of the estate
would go to Whites siblings. The law of his domicile
governs the distribution of his estate.
HELD: Pennsylvania was his domicile at the time of his
death. Two things must concur to establish domicilethe
fact of residence, and the intention of remaining. These two
must exist in combination. When one domicile is definitely
abandoned, and a new one selected and entered upon,
length of time is not important; one day will be sufficient,
provided the animus exists.
3)

Constructive domicile: domicile assigned to


persons incapable of choosing their own domicile
by operation of law. Includes minors, mentally
disabled, married women.

ground that he was not qualified to adopt, him being a nonresident alien.
HELD: Actual or physical presence or stay of a person in a
place, not of his free and voluntary choice and without intent
to remain there indefinitely, does not make him a resident of
the place. Caraballo is disqualified to adopt because he is a
non-resident alien. His stay in the Philippines is only
temporary, and is merely the result of his assignment as staff
sergeant.
In recent decisions, courts have held that a person under
compulsion should not be barred from proving that he has
developed the required unqualified intention to establish his
permanent abode in such place. The fact of compulsion is
reduced to just one of the factors in determining whether
intent, in fact, exists.

Married Women: based on the concept of unity of identity


Minors or infants are indubitably incapable of choosing their
own domicile. Their domicile automatically changes when
their fathers domicile changes. Minors take the domicile of
their mother upon the death of their father.
A person who has a mental disability is also assigned a
constructive domicile. It is presumed that a person with a
mental disability cannot acquire a domicile of choice
because of his inherent inability to decide where to make his
home.

of spouses, the wife was presumed to take the domicile of


the husband.
Go Chen and Go Lek vs. Collector of Customs
(1932)
FACTS: Tan Bon, a Chinese citizen, entered the
Philippines as the wife of a Chinese merchant. She asked
her minor children from a previous marriage to join her
here, but they were not allowed entry.

HELD: CFI Iloilo has JD. Where the husband has given
cause for divorce, the wife may acquire another and separate
domicile from that of her husband.
*There are exceptions to the rule that the domicile of the
wife is determined by that of her husband, one of which is
that the wife may acquire another and separate domicile
from that of her husband where the theoretical unity of
husband and wife is dissolved, as it is by the institution of
divorce proceedings; or where the husband has given cause
for divorce; or where there is a separation of the parties by
agreement, or a permanent separation due to desertion of
the wife by the husband or attributable to cruel treatment on
the part of the husband; or where there is a forfeiture by the
wife of the benefit of the husbands domicile.
Modern view (married women): dispenses with the
presumption that the wifes domicile is the same as her
husbands. Each party establishes his or her own domicile
completely independent of each other. As a result, the wife
need not show that her husband has given cause for divorce
or legal separation to have a separate domicile.

XI. Principles on Personal Status and Capacity


A.

Special Problems in
Constructive Domicile

Domicile

of

Choice

vis--vis

1)

domicile of people kept under physical or legal


compulsion

2)

domicile of married women seeking to acquire


separate domicile from their husbands

People under Compulsion: traditional view is that he is in


that place not as a result of his volition. Examples are
military personnel, prisoners and people with disabilities
who are confined in institutions.
Caraballo vs. Republic
(1962)
FACTS: Caraballo, an American staff sergeant in the US Air
Force stationed in Clark Air Base, filed a petition for
adoption of a Filipino child. The petition was denied on the

HELD: The minor children cannot enter the Philippines. A


Chinamans Chinese wife and her minor children do not
enter the Philippine Islands through their own right, but by
virtue of the right of the husband and father. Since Tan Bon
did not enter the Philippines by her own right but by virtue
of her husband, she is not entitled to bring in her minor
children by another Chinaman who never had legal
residence in the Archipelago. The mere fact of their being
children of Tan Bon confers on them no right of entry,
inasmuch as she herself did not enter of her own right, and
they cannot base their right on hers.
De La Vina vs. Villareal and Geopano
(1920)
FACTS: Geopano filed a complaint in CFI Iloilo against de
la Vina, her husband, for divorce on the ground of infidelity.
De la Vina opposed, saying that CFI Iloilo has no JD over
the case considering that he resides in Negros, such that
Geopano must also be considered a Negros resident,
because the domicile of the wife follows that of the husband.

24

Definition

Personal capacity

Includes both condition and capacity


Embraces matters as the beginning and end of
personality, capacity to have rights, capacity to
engage in legal transactions, protection of personal
interests, family relations, also transactions of
family law such as marriage, divorce, separation,
adoption, legitimation and emancipation, and
succession.

Juridical capacity: fitness of a man to be the subject of legal


relations

Capacity to Act: power to do acts with legal effects


ART. 37, Civil Code:
Juridical capacity, which is the fitness to be the subject of
legal relations, is inherent in every natural person and is lost

only through death. Capacity to act, which is the power to do


acts with legal effect, is acquired and may be lost.

persons but of the public or political law of the nation. The


jurisdiction of courts and other matters of procedure are of
public nature and are submitted to the territorial principle.

1.

there is a rebuttable presumption that a person is dead


after he has been absent for a number of years

2.

a persons unexplained absence is judicially investigated


and established which results in legal effects similar to
those of death
a judicial decree shall have to be issued declaring a
person dead before legal effects of death can take place

In case of Filipinos, Art. 15 of the CC states that personal

status and capacity follows the nationality principle.


In case of aliens, courts may refer to their national law or
domiciliary law.
Recto vs. Harden
(1959)
FACTS: H engaged the services of R, as counsel in her suit
against her husband for support and for preservation of her
rights in the conjugal partnership in contemplation of a
divorce suit. However, the spouses entered into a
compromise agreement to defeat the claim of R in attorneys
fees. H moved to dismiss on the ground of invalidity of the
contract of service because divorce is contrary to Phil law.
HELD: R should be paid his fees. H spouses are US citizens
and their status and the dissolution thereof are governed by
the laws of the United States, which sanction divorce.
Therefore, contract is not contrary to public policy.
B.

Legislative Jurisdiction Distinguished from Judicial


Jurisdiction

Note: The doctrine is no longer controlling. Divorce is


considered a violation of public policy so that courts cannot
issue the same.
C.

Beginning and End of Personality

The determination of the exact moment personality begins is


referred to the individuals personal law.

Art. 40, CC
Birth determines personality; but the conceived child shall
be considered born for all purposes that are favorable to it,
provided it be born later with the conditions specified in the
following article.

Art. 41, CC
For civil purposes, the fetus is considered born if it is alive at
the time it is completely delivered from the mothers womb.
However, if the fetus had an intra-uterine life of less than 7
months, it is not deemed born if it dies within 24 hours after
its complete delivery from the maternal womb

Geluz vs. CA: SC did not allow for recovery of damages for
Status once established by the personal law of the party, is
given universal recognition.
Status, capacity, and rights and duties, brought into existence
by State A and conferred in a natural or juridical person
under its jurisdiction, should be recognized by State B,
without any exception or qualification imposed by the latter,
except by some definite or protected rule of municipal law.
-

Aliens can sue and be sued in our courts even on issues


relating to status and capacity. However, the applicable
law is their personal law.

Barnuevo vs. Fuster


(1913)
FACTS: Fuster and Yanez separated. After 10 years, Y filed
for divorce on the ground of Fs adultery. Court granted
decree of divorce. Fuster contests jurisdiction of the court to
issue the said decree.

the injury and death of a conceived child which is still in the


mothers womb. Art. 40 cannot be invoked since it expressly
limits the provisional personality by imposing the condition
that the child should be subsequently born alive.
Civil personality is commenced at birth and is extinguished
by death. A declaration of death issued by a competent court
is considered valid for all purposes.

Limjoco vs. Intestate Estate of Fragante: HELD: SC ruled


that the estate of a deceased applicant can be granted a CPC
to avoid injustice or prejudice resulting from the
impossibility of exercising such legal rights & fulfilling such
legal obligations of the decedent as survived after his death
unless the legal fiction, that the estate is considered a person,
is indulged.
D. Absence
The domestic laws of states do not treat absentees alike.

HELD: Phil court has jurisdiction. The authority and


jurisdiction of courts are not a matter of private law of

Three ways of dealing with the problem:

25

3.

*Phil law follows the rebuttable presumption (1).

Art. 390, CC
After the absence of 7 years, it being unknown whether or
not the absentee still lives, he shall be presumed dead for all
purposes, except for those of succession.
The absentee shall not be presumed dead for the purpose of
opening his succession till after the absence of 10 years. If he
disappeared after the age of 75 years, an absence of 5 years
shall be sufficient in order that his succession may be
opened.

Art. 391, CC
The ff. shall be presumed dead for all purposes, including
the division of estate among the heirs:
(1) a person on board a vessel lost during sea voyage, or an
airplane which is missing, who has not been heard of
for 4 years since the loss of the vessel or airplane.
(2) A person in the armed forces who has taken part in war
and has been missing for 4 years
(3) A person who has been in the danger of death under
other circumstances and his existence has not been
known for 4 years
However, for specific purposes, our laws require that a
declaration of death be issued before certain legal effects of
death arise ex. Contracting a subsequent marriage but the
periods are reduced to 2 years.
The legal effects of absence and restrictions on his capacity
are determined by his personal law.
E.

Name

A persons name is determined by law and cannot be


changed without judicial intervention.(Art. 376, CC) Case
law shows that courts have allowed petitions on grounds that
the name

1.
2.
3.
4.

is ridiculous or tainted with dishonor or extremely


difficult to pronounce
when the change is necessary to avoid confusion
when the right to a new name is a consequence of
change in status
a sincere desire to adopt a Filipino name to erase signs
of a former alien nationality which unduly hamper
social and business life

Confusion as to ones paternity has been held to justify the


courts denial of a petition for change of name.
Whether an aliens change of name is valid depends solely
on his personal law.

F.

Age of Majority

The legal disability and rights attached to minority are


aspects of personal status. It is the individuals personal law
which determines whether he has reached the age of
majority.
RA 6809 lowered the age of majority from 21 18 years but
parental consent for contracting marriage is still required
until the age of 21.
G. Capacity
A persons ability to act is governed by his personal law.
Rules on capacity of an individual to bind himself by
contract with other persons or by unilateral acts are the very
core of the rules that identify his legal position. The
incapacities attached to his legal status go with him wherever
he is.
The general rule on capacity is subject to several exceptions.
These include liability in tort, which is subject to the law of
the place of the tort and the restrictions on the contracting
capacity of a married woman.
Insular Government vs. Frank
(1909)
FACTS: Insular Govt entered into an employment contract
with Frank in Illinois when he was still a minor under Phil
law but not under Illinois law. Frank breached the contract
so IG sued him.
HELD: Illinois law should apply. Matters bearing upon the
execution, interpretation and validity of a contract are

determined by the law of the place where the contract is


made.

5)
6)

This case should have been resolved as a capacity case


instead of as a contract case (characterization).

7)

PART FOUR: CHOICE OF LAW PROBLEMS

cannot be abrogated, amended or terminated by


one or both parties at will
nature & consequences as well as incidents are
governed by law & not subject to stipulation by
parties unlike ordinary contracts
violation of marital obligations may give rise to
penal or civil sanctions while breach of conditions
of ordinary contract can be ground for an action
for damages

1.
XII. Choice of Law in Family Relations
Man & woman may decide to marry in a country other than
that of their nationality & come home. Issue of validity of
marriage & legal consequences may be raised (Legal
consequences such as personal & property relations, status &
rights of children, use of surname & right to inherit).
Family law is an area of substantive law which reflects strong
policies of state often based on values highly held by society.
Family relations give rise to grave individual & societal
concerns.
A.

Marriage

Art 1. Marriage is a special contract of permanent union


b/w man & woman entered into in accordance w/ law for the
establishment of conjugal & family life.
It is the foundation of the family & an inviolable social
institution whose nature, consequences & incidents are
governed by law & not subject to stipulation except that
marriage settlements may fix property relations during the
marriage w/in limits provided by this Code.
Juxtaposed w/ Art15 CC, w/c states that questions on family
rights, duties, status, conditions & capacity are governed by
lex nationalii, the importance of such definition is realized.
Marriage is a special contract as distinguished from an
ordinary contract:

4)

Art XV. Sec. 2: Marriage as an inviolable social institution, is


the foundation of the family & shall be protected by the
state.
Presumption of validity: The Philippines establishes a
presumption of validity to give stability to marriage especially
in Conflicts of Law problems.
Art 220. CC. In case of doubt, all presumptions favor the
solidarity of the family. Thus every intendment of law or
facts lean toward the validity of marriage, the indissolubility
of marriage bonds, legitimacy of children, the community of
property during marriage

Goal: Guide courts, strengthen family, & emphasize state

Family Code Definition:

1)
2)
3)

Philippine Policy on Marriage and the


Family

entered into by a man & a woman


both at least 18 years of age
solemnized by a person specifically authorized by
law
a permanent union unless one party dies, or
marriage is annulled or declared void in special
circumstances

26

interest in its preservation

2. Extrinsic Validity of Marriage


This is governed by lex loci celebrationis.
Extrinsic validity covers questions on formalities or external
conduct required of parties for legally valid marriage.
Art 2. Hague Convention on Celebration & Recognition of
Validity of Marriages: Formal requirements governed by law
of state of celebration.
General rule: All states recognize as valid marriages
celebrated in foreign countries if the formalities prescribed
there were complied with.
PHILIPPINES, Formal Requirements of Marriage
Art 3. FC sets the ff requirements:
1)
2)

Authority of solemnizing officer


Valid marriage license except in cases provided in
Ch 2 of this title

3)

Mariage ceremony w/c takes place w/ the


appearance of contracting parties before the
solemnizing officer & their personal declaration
that they take each other as husband & wife in the
presence of not less than 2 witnesses of legal age

Lex Loci Celebrationis (expressed in Art 26 FC):


All marriages solemnized outside the Philippines in
accordance w/ the laws in force in the country where they
were solemnized, and valid there as such, shall also be valid
in this country
Adong vs. Cheong Seng Gee
(1922)
FACTS: The late Cheong Boos estate is being claimed by
Cheong Seng Gee, who says that he is the legitimate child of
the decedent with Tan Dit, whom the decedent allegedly
married in China.
HELD: The validity of the Chinese marriage cannot be
recognized. There is no competent testimony what the laws
of China in the Province of Amoy concerning marriage were
in 1895. There is lacking proof so clear, strong and
unequivocal to produce a moral conviction of the existence
of the alleged Chinese marriage.

People vs. Mora Dumpo


(1935)
FACTS: Dumpo married Hassan, and then married
Sabdapal without having her previous marriage annulled. As
a defense to an allegation of bigamy, Dumpo claimed that
her 2 marriage was void because her father did not consent
thereto.

Wong to be excluded from the country, on the ground that


her marriage to Blas was bereft of substantial proof.
4)
HELD: Wong should be excluded. Art.15 of our Civil Code
provides that the laws relating to family rights or to the status
of persons are binding upon Philippine citizens, though
living abroad. Even if the marriage of Wong to Blas before a
village leader is valid in China, the same is not one of those
authorized in our country. Under Sec. 4 of Gen. Orders 68
(now Art. 71 CC), a marriage contracted outside the
Philippines which is valid under the law of the country in
which it was celebrated is also valid here; but there was no
proof presented on the applicable law of China. Therefore it
may be presumed to be the same as our law.

Apt vs. Apt


(1947)
FACTS: The marriage of the Apts (both Germans) was
celebrated in Argentina by proxy. The wife, a domiciliary of
England, filed a petition for the nullification of their
marriage on the ground that proxy marriages are not valid in
England. It is, however, valid in Argentina.
HELD: The marriage is valid. The English law on marriage
is locus regis actum. If a marriage is good by the laws of the
country where it is effected, it is good all the world over, no
matter whether the proceeding or ceremony which
constituted marriage according to the law of the place would
or would not constitute marriage in the country of domicile
of one or other of the spouses. Since the marriage was
performed in Buenos Aires and in accordance with its laws,
and since proxy marriage is only a form of the ceremony and
not an essential requisite, the marriage should be upheld.

5)
6)
7)

o& distribution of the properties of the spouses &


the delivery of presumptive legitimes
there was a mistake as to identity of the contracting
party
one of the contracting parties was psychologically
incapacitated to comply with the essential marital
obligations
the marriage is incestuous
marriage is void by reason of public policy

Note that the exceptions put in issue the parties capacity to


enter into marrriage, thus, relating to a substantive
requirement.
Since the personal law of the parties governs questions of
intrinsic validity of marriages b/w Filipinos abroad, the above
enumerations are exceptions to the lex loci celebrationis
precisely because they are controlled by lex nationalii.

3. Intrinsic Validity of Marriage


Intrinsic requirements refer to capacity or general ability of a
person to marry, for instances defined by requirements of
age & parental consent, but it does not refer clearly to an
individuals being permitted to marry a specific person or
person of a determinate class.

What law controls intrinsic requirements?


The parties personal lawseither domicile or nationality.
Municipal laws of each
requirements of marriage.

state

provides

substantive

nd

HELD: Dumpo is not guilty of bigamy. The 2 marriage was


null and void because the consent of her father was not
obtained. It is an essential element of bigamy that the alleged
2 marriage, having all the essential requisites, would be valid
were it not for the existence of the first.
nd

nd

Exceptions to Lex Loci celebrationis: The Civil Code (Art


71) enumerates bigamous, polygamous or incestuous
marriages as exceptions to the lex loci celebrationis rule.

1)

Legal capacity: must be 18 years of age & not


barred by any impediment to marry each other

The Family Code (Art 26) widens these exceptions.


2)
A foreign marriage although valid in the foreign country
where it was entered into will be void in the Philippines if:

Wong Woo Yu vs. Vivo


(1935)
FACTS: Wong Woo Yu alleged before the Board of
Special Inquiry that she was allegedly married to a Filipino,
Blas, in a ceremony in China. The new Board ordered

Philippine Law sets the following substantive or essential


requisites:

1)
2)
3)

either or both parties are below 18


it is bigamous or polygamous
a subsequent marriage is performed w/out
recording in the Civil Registry & registry of
Properties the judgment of annulment or
declaration of nullity of first marriage, the partition

27

Consent freely given: in the presence of an


authorized solemnizing officer

Matrimonial consent: Parties are, at least, not ignorant that


the marriage is a permanent union.
Mixed marriages: the law that governs substantive validity is
national law of parties.

Art 38. FC.: Though valid in a foreign country certain


marriages may be void in the Philippines on grounds of
public policy, such as the ff:
1)

b/w collateral blood relatives, whether legitimate


or illegitimate up to the 4 civil degree
b/w step-parents & stepchildren
b/w parents-in-law & children-in-law
b/w adopting parent & adopted child
b/w surviving spouse of adopting parent & adopted
child
b/w surviving spouse of adopted child & adopter
b/w adopted child & legitimate child of adopter
b/w adopted children of same adopter
b/w parties where one, w/ intention to marry the
other, killed the persons spouse or his or her own
spouse
th

2)
3)
4)
5)
6)
7)
8)
9)

Marriages Between First Cousins:


Marriage of 1 cousins is no longer incestuous but still void
ab initio on the ground of public policy.
st

It is submitted that our prohibition against marriage of 1


cousins be limited only to Filipino nationals because many
countries allow such marriages.

5)

one of the spouses did not freely consent to the


marriage

Christianity prohibits polygamous & incestuous marriages


but care must be taken to confine doctrine to cases deemed
incestuous by general consent of all Christendom.

Sottomayor vs. de Barros


(1877)
FACTS: Sottomayor and de Barros are both Portuguese and
first cousins. Under Portuguese law they are incapable of
contracting marriage. They were married in London.
Sottomayor filed a petition to have the marriage declared
invalid.

The state may resort to ultimate escape devicecontravention of a public policy to w/hold recognition of
validity of a foreign marriage.

HELD: The marriage is invalid. The law of a country where


marriage is solemnized must decide all questions relating to
the validity of the ceremony by which the marriage is alleged
to have been constituted; but as regards questions on
personal capacity, it must depend on the law of the domicile,
and if the laws of any country prohibit its subjects within
certain degrees of consanguinity from contracting marriage
and treats such as incestuous, this imposes on the subjects a
personal incapacity which continues to affect them so long as
they are domiciled in said country and renders such
marriage invalid wherever it may have been solemnized.

However, commentators argue that when the non/existence


of marriage is merely a preliminary Q arising incidentally in
a case involving an issue not profaning mores of forum (such
as tax, property or succession law) the rule above should not
be applied.

st

Marriages b/w foreigners whose national laws allow marriage


of 1 cousins should be considered as valid in the Phil under
the principle that the lex nationalii controls capacity &
presumption in favor of validity of marriage, as expressed in
Art 220.
st

Hague Convention on validity of Marriages allows a


contracting state to refuse recognition of the marriage if:
1)

2)

3)

4)

one of spouses was already married (unless


marriage has subsequently become valid by virtue
of dissolution or annulment of previous marriage)
spouses were related to one another by blood or
by adoption, in the direct line or as brother or
sister
one of spouses had not attained the minimum age
required for marriage nor acquired the necessary
dispensation

Rule: Marriages manifestly incompatible with the ordre


public of the state of nationality of parties may be refused
recognition.

In ReDalip Singh: two women claimed that they were


lawfully wedded wives of Singh, a native of India who died
intestate in California. They claim to have been lawfully
married to him in India over 50 yrs ago while domiciled
there in accordance w/ law of the Jat community.
Under California laws, only 1 wife recognized as legal
widow. Wives argue that the polygamous marriages should
be held valid on strength of Art 63 CC: All marriages
contracted w//out the state, w/c would be valid by the laws of
the country in w/c the same were contracted are valid in this
state.
st

In re Mays Estate
(1920)
FACTS: Fannie is Sams niece by half blood; they are both
Jewish and NY residents. NY prohibits marriage between
uncle and niece, so they went to Rhode Island, where such
marriage is also prohibited except where the parties are
Jewish (the Jewish faith allow such marriages). After the
ceremony they went back to NY to live there.
HELD: The marriage is valid. The legality of a marriage
between persons sui juris is to be determined by the law of
the place where it is celebrated. The general principle is that
the rights dependent upon nuptial contracts are to be
determined by the lex loci, subject to 2 exceptions: 1) cases
within the prohibition of positive law, and 2) cases involving
polygamy or incest in a degree regarded generally as within
the prohibition of natural law. As to the first exception, there
is no positive law in New York which serves to interdict
the marriage in Rhode Island of Sam and Fannie, and as to
the second exception, their marriage was not offensive to the
public sense of morality, it being allowed by the Jewish faith.
Instances Where Recognition of Validity of Marriage May
be Withheld:

one of the spouses did not have the mental


capacity to consent

Court, citing English & American cases: Polygamous


marriages can be recognized in English law so as to confer
on the wives the status of a wife for the purposes of Sec. 10
of British Nationality & Status of Aliens Act or for purposes
of succession, & upon the children the status of legitimacy.

Marriages Celebrated by a Consular Official


Art. 9 of the relevant Hague convention: Marriage
celebrated by a diplomatic agent or consular official in
accordance with his state law shall be considered valid as
long as it is not prohibited by the state of celebration
Philippine law: Marriage of Filipino nationals shall be
officiated by Philippine consul general, consul or vice consul
(in w/c case the formal & extrinsic requirements of a valid
marriage license & due publication & registration under
Philippine law have to be complied with).
This is said to apply to marriage b/w Filipino national & an
alien provided the alien complies with marriage requisites
under his/her national law.

28

Additional requirements for:


1)

2)

aliens - submission of a certificate of legal capacity


to contract marriage issued by diplomatic/consular
office
stateless persons or refugees- submission of
affidavit stating circumstances showing legal
capacity to contract marriage

4. Effects of Marriage
Personal Relations between the Spouses

But, in Ch VIII on Domicile, some legal authorities


consider the assignment of constructive domicile to the wife
as invidious discrimination on basis of gender.

Property Relations of Spouses


Hague Conventions on law Applicable to Matrimonial
Property: The internal law designated by spouses before
marriage or in absence thereof the internal law of state in w/c
both spouses fix their habitual residence is the governing law
on matrimonial property regimes.
Art 80. Family Code: In the absence of a contrary stipulation
in a marriage settlement, property relations of spouses shall
be governed by Philippine laws, regardless of the place of
the celebration of the marriage & their residence.

These include mutual support, fidelity, respect, cohabitation


& right of wife to use husbands family name)

This rule shall not apply:

What is the governing law? National law of parties

1)

If both spouses are aliens

If spouses are of different nationalities, generally, the


husbands national law may prevail as long as it is not
contrary to law, customs, & good morals of the forum.

2)

With respect to the extrinsic validity of contracts


affecting property not situated in the Philippines &
executed in the country where the property is located

Art 69 Family Code: Husband & wife have the right to fix
family domicile.

Court, for compelling reasons, may exempt spouse


from living with the other.

3)

Djumantan vs. Domingo: Filipino marries Indonesian. They

Art 80 generally follows lex rei sitae.

go to Philippines w/ intention of staying here permanently.


Subject of petition: Effect of marriage on wifes right to stay
in the Philippines.

With respect to the extrinsic validity of contracts


entered into in the Phil but affecting property
situated in a foreign country whose laws require
different formalities for its extrinsic validity

What law will govern the property relations of spouses


where one is a Filipino citizen 7 the other a foreigner? It
would still be governed by Philippine law.

There is no law guaranteeing aliens married to Filipino


citizens the right to be admitted, much less to be given
permanent residency, in the Philippines.
The fact of marriage by an alien to a citizen does not
withdraw her from operation of immigration laws governing
admission & exclusion of aliens. Marriage of an alien woman
to Filipino citizen does not ipso facto make her a Filipino
citizen & does not excuse her from her failure to depart
from the country upon expiration of her extended stay here
as alien.
Restatement 2 The wife who lives w/ her husband has the
same domicile as his unless special circumstances of wife
make such result unreasonable.
nd:

In Adong and Wong Woo Yu, the Court did not


apply the Philippine policy of presumption of
validity of marriage.
Question: is a proxy marriage between Filipinos in
a state allowing such marriages valid? Pangalangan:
Yes, because it is merely a formal requisite (lex
loci celebrationis apply)
________________
B.

Divorce and Separation

Divorce: Absolute or Limited


Absolute: termination of legal relationship b/w spouses by an
act of law.
Limited: (Legal separation) separation form bed & board w/c
does not effect the dissolution of
marital ties. But it
modifies the incidents of marriage by relieving spouses of
duty of living w// each other.
This does not necessarily affect economic rights & duties
since the court may order one to provide for support. For
such purpose, it is essential that court has JD over
respondent spouse & the property sought to be affected by
decree.
Local law governs legal consequences of divorce of spouses,
nationals of same country, who marry, are domiciled &
divorce.
If any of above factors connected to another state conflicts
problem arises.

Change of nationality after Marriage


If one or both spouses change nationality subsequent to
marriage, property regime remains unchanged because of
principle of immutability.

Divorce jurisdiction:

Hague Convention on Matrimonial Property Regimes. Art


7: The applicable law continues notwithstanding any change
of their nationality or habitual residence.

Ratio: Divorce, being a matter of state concern, should be


controlled by law of place w/ w/c person is most intimately
concerned, place where he dwells.

extrinsic validity: refers to formal requisites, apply lex loci

Due process requires that forum court have a substantive


contact w/ the relationship w/c it will decide won to dissolve.

celebrationis

Basis of JD of some countries: Domicile of one of the


parties or matrimonial domicile

Hague Convention Relating to Divorce & Separation: The

intrinsic validity: refers to essential requisites, apply personal


law of the parties

29

granting of divorce or separation must comply w/ the


national law of spouses & the law of the place where the
application for divorce is made.

Some laws in PRiL have made


1)

the right to separation or divorce depend on the


national law of the spouses &

HELD: The divorce decree obtained in the US is not valid,


because at the time it was issued, Vicenta, like Pastor, was
still a Filipino citizen. She was then subject to Philippine law.
Philippine law cannot recognize a foreign decree of absolute
divorce between Filipino citizens, for this would violate
declared public policy.

2) grounds for divorce subject to law of forum


provided the parties were domiciled there.
Grounds for divorce are dictated by lex fori. Thus, many
states refuse to recognize foreign grounds for divorce unless
it corresponds w/ a ground justified by forum law. This is
followed whether the traditional or policy centered choice of
law approach is used.

1.

BUT a marriage b/w a Filipino & a foreigner is susceptible


to divorce if the divorce was validly obtained by the alien
spouse (Art 26 par 2).

Effects:
alien is capacitated to remarry
Filipino spouse shall likewise have the capacity to
remarry under Philippine law

Effect of Provision (Art 26): partial recognition in the Phil of


absolute divorce.
o note: Divorce should be obtained only by alien
spouse. Otherwise, Art 26 is inapplicable.
o

Tenchavez: 2 Filipinos, divorced abroad not


recognized in the Philippines (Art. 15 CC,
nationality principle)
Van Dorn: 1 Filipino, 1 foreigner, divorced
abroad recognized (Art. 15 CC, estoppel)
Pilapil: 1 Filipino, 1 foreigner recognized
(nationality principle)
________________

Divorce decrees obtained by Filipinos

Divorce decrees obtained abroad have no validity, not


recognized in Philippine jurisdiction.

1.
2.

Van Dorn vs. Romillo


(1985)
FACTS: Van Dorn, a Filipina, married American Upton.
Ten years later they were divorced in the US; subsequently,
van Dorn remarried. Upton filed an action against Van
Dorn in the Philippines, asking for an accounting of certain
alleged conjugal properties.

longer a Filipino citizen at the time of their divorce, the


divorce would be valid as to her and will be recognized in
the Philippines, and she would lose her right to inherit.

Provision is to remedy the uneven status of


Filipino nationals whose alien spouses obtained
divorce abroad & remarried while the Filipino
spouse remained married to them in eyes of
Philippine law.

Tenchavez vs. Escao


(1965)
FACTS: Vicenta and Pastor were married without the
knowledge of her parents. Vicenta went to the US to obtain
a divorce, which was granted by the Nevada Court; she
married an American and subsequently acquired American
citizenship. Pastor sued Vicenta for legal separation and
damages. Vicentas defense is that there was a valid divorce
issued by the Nevada court.

HELD: The divorce decree is valid and binding upon


Upton. Even if divorce is not valid in the Philippines for
being contrary to public policy, only Philippine nationals are
covered by the policy against absolute divorces. Aliens may
obtain divorces abroad, which may be recognized in the
Philippines provided valid according to their national law.
Pilapil vs. Ibay Somera
(1989)
FACTS: Pilapil and Geiling were married in Germany, but
were later divorced. A few months later, Geiling filed a
complaint for adultery which was dismissed; it was refiled by
the fiscal.
HELD: Geiling has no legal standing to commence the
adultery case because the person who initiates the adultery
case must be an offended spouse, meaning he must still be
married to the accused spouse at the time of the filing of the
complaint. Because of the divorce decree, Geiling is no
longer the husband of Pilapil; hence he had no more legal
standing to commence the adultery case (no longer an
offended spouse).

Quita vs. Court of Appeals


(1998)
FACTS: Quita and Padlan were married in the Philippines,
but Quita filed for divorce in California which was granted.
She remarried twice after the divorce. Upon Padlans death,
Quita made claims upon his estate as the surviving spouse
and heir of Padlan, alleging that since Padlan was a Filipino
citizen, he remained married to her in spite of the divorce
decree.
HELD: Quitas right to inherit from Padlan depends on her
citizenship at the time the divorce was decreed. If she was no

30

2.

Validity of Foreign Divorce between


Foreigners

Hague Convention on Recognition of Divorce & Legal


Separation:
A foreign divorce will be recognized in all contracting states
if at the date of institution of proceedings:
a)

Respondent or petitioner had his habitual


residence there, or

b)

Both spouses were nationals of this state, or

c)

If only the petitioner was a national, he should


have his habitual residence there

US Full Faith & Credit Clause of Constitution: A sister state


has the duty to recognize a divorce pronounced in a sister
state, when both spouses are domiciled there.
If only the plaintiff is domiciled there: Other conditions (i.e.
service of process to defendant) must be fulfilled
Effect of Divorce Rendered by a Foreign Country: not
covered by Full faith & credit clause
o but would be recognized under the same
circumstance that a sister states divorce decree is
given recognition.
paramount consideration: jurisdiction of foreign court based
on parties domicile.

Philippine Law on Recognition of Foreign Divorce Decree:


No provision on recognition of divorce decree b/w nonFilipinos;
o but such will be recognized under international
comity, provided it does not violate a strongly held
policy of the Philippines

Sample conflicts Annulment Case


o M&F, domiciliaries of STATE A, both 18
years old
o
o

C.

Annulment and Declaration of Nullity

marry in STATE B w/out knowledge of their


parents
suit for annulment was brought in STATE C
(place of Ms residence)

Personal law of the child is the national law of the


father if the child is legitimate or legitimated.

Personal law of the child is the national law of the


mother if the child is illegitimate.

Legitimacy of the child determined by the national


law of the father if both parents are not Filipino.

In the UNITED STATES:


Effect: Affects status & domestic relations of parties.

State C can exercise JD over the case but what is the

governing law?

as per Second Restatement On Legitimacy of the American


Law Institute

Distinction from Divorce


Divorce

Annulment and Nullity

The ground occurs after


marriage celebration

Based on defects present


at time of celebration

Grounds for Annulment & Nullity:


o
o

States w/ traditional choice-of-law approach:


follow the lex loci celebrationis
States w/ policy-centered approach: follow the law
of state of marital domicile (considered to have the
most significant interest in status of persons)

In both approaches, lex fori (which is crucial in divorce)


does not play substantial role because the action turns on the
validity of the marriage.

Traditional choice-of-Law rules: will find sufficient


ground for the challenge
If the lex loci celebrationis
(STATE B) requires parental consent for a
valid marriage

Most Significant Relationship Approach: will not


yield a ground for annulment.
State C can conclude that since law of
STATE A (state of marital domicile) gives
people their age full capacity to marry, no
ground for annulment

The Choice of Law rule of STATE C will be


irrelevant

D. Parental Relations
What law determines legitimacy of a child? Personal law of
parents - either domicile or nationality.

Both lex loci celebrationis and law of marital domicile can


provide jurisdictional basis, but only one can be a choice-oflaw in the determination of the annulment decree.

Most countries: fathers personal law


German law: law of head of family

Which states can claim adequate jurisdictional basis to hear


a conflicts annulment or nullity case?

Law on parental relations include:


o Paternity
o Filiation

state where marriage was celebrated


place of marital domicile

Wheaton vs. Wheaton: Even a court which acquires


personal JD over parties can grant an annulment case (US
case).

Child is legitimate if this is his status under the


local law where the parent is domiciled when the
childs legitimacy is claimed OR when the parent
acknowledged the child as his own.

Parental Authority over the Child


-from concept of patria potestas of Roman law
What law controls? Fathers personal law controls rights &
duties of parents & children.
o
o

Art. 211 FC: Reference to fathers personal law


may result in joint exercise of parental authority
Art. 176 FC: Personal law could grant parental
authority to mother of illegitimate children

Scope of Parental Authority:

Note that in either traditional or policy-centered approaches,


lex fori is not used; recall that lex fori can be used in divorce.

a)
b)

What law governs legitimacy of child in the Philippines?


National law of the parents.

1)

care & rearing

2)

action a parent may file against another for child


custody

3)

requirements for parental consent of childs


marriage

E.

Adoption

Definition: The act by which relations of paternity &


affiliation as legally existing b/w persons not so related by
nature.

If parents are of different nationality: national law of father is


controlling.

It is a judicial act w/c creates b/w 2 persons a relationship


similar to that w/c results from legitimate paternity &
affiliation.

In the PHILIPPINES:

Early societies considered it as a means of perpetuating a


house or cult threatened by extinction.

31

1)
Original purpose: solace for childless or people who lost
children

Aliens who have resided in the Philippines for 3


years prior to the date of filing the application for
adoption, and maintains residency until decree of
adoption is granted QUALIFIED TO ADOPT

Effects Of Adoption
What law governs rights of adopted child & other effects of
legal adption? (law that governed the creation of adoption)

Recent time: broader, more humane aim

2 different legal orders depending on which law governed


Social & moral purpose: extend protection of society (in the
person of adopter) to the orphan.
Thus, persons eligible to adopt expanded

2)

What law governs? lex domicilii


The adoption process affects status of parties, necessarily
governed by lex domicilii.

What if prospective adoptive parent is domiciled in one state


& the child is domiciled in another?
Twin problems of

Other requirements:
a) certification of legal capacity
b) certification that the State law would
allow entry of the adoptee as an adopted
child of the adopter.

These other requirements may be waived if the adoptee is


related by consanguinity or affinity to the
o adopter, or
o his/ her spouse as specified by law.

jurisdiction and choice-of-law.

RA 8043:
o

If the main object of adoption is the welfare of the


child, the personal law of the child is the best
choice-of-law to govern his rights

Before this, adoption of Filipino children by foreigners was


done pursuant to Rules & Regulations on Foreign Adoption
& bilateral agreements.

But the personal law of the child cannot be


successfully used to invoke jurisdiction if his
domicile is merely constructive or if he is a citizen
of a state but he doesnt reside there.

RA 8043 regulate the adoption of Filipino children by


o aliens, or
o Filipino citizens permanently residing
abroad.

Childs personal law as basis for exercise of jurisdiction


weakened in situations where childs domicile is:
o merely constructive, or
o if he is a citizen of a state but he doesnt reside
there (there is little basis for court to protect child
interest competently)

RA 8043 was passed in compliance with our treaty obligation


as a signatory to the Hague Convention on Protection of
Children & Cooperation In Respect of Intercountry
Adoption.

The continuous movement of people in & out of countries


should also be factored in.
Can an alien adopt a child in the Philippines?
General Rule: not allowed
Reason: Different family orientation, cultures, customs &
traditions could pose problems of adaptation for child.
Exceptions:
o Art 184. Aliens who have some relationship with
the child by consanguinity or affinity
o

RA 8552 (Domestic Adoption Act Of 1998)

These two introduced significant changes in adoption law.

Change Pertinent to Conflict Law

Convention pursues modern concept of adoption: After


possibilities of adoption for placement of child within state
of origin have been exhausted, intercountry adoptions may
be placed in the best interest of the child.

the creation of adoption:


1)

If Personal law of adopter appliedsame


governs effects of adoption.

law

2)

If personal law of child appliedsuch law will


cease to regulate the resulting parent-child
relations; it will yield to the personal law of
adopting parents.

Philippine courts:
o Adoption relates to a civil rights of adopted
child
o Does not effect changes in political rights,
including eligibility to acquire adopters
citizenship
In the Philippines, principles of enforcement & recognition
of a foreign judgment governs, because the decree granting
an adoption is in the form of a foreign judgment.
Uggi Lindamand Therkelsen vs. Republic
(1964)
FACTS: Therkelsen (a German) and his wife Erlinda (a
Filipino), filed a petition to adopt Erlindas natural child.
The application was denied on the ground that an alien
cannot adopt a Filipino unless the adoption would make the
Filipino minor a citizen of the aliens country.

Republic of the Philippines vs. CA


(1993)
FACTS: Hughes is married to Lenita, a Filipina who was
later naturalized as an American citizen. They filed a petition
to adopt the 3 nephews and niece of Lenita, which was
granted.

HELD: The application should be granted. Being a


permanent resident here, Therkelsen is not disqualified to
adopt under our laws; to deny the application on the above
stated ground would be to impose a further requisite on
adoptions by aliens beyond those required by law. The
citizenship of the adopter is a matter political, not civil in
nature, and the ways in which it should be conferred lay
outside the ambit of the Civil Code.

HELD: Hughes is not qualified to adopt since he does not


fall under the exceptions in Art. 184 of the Family Code.
While Lenita, as a former Filipino, is qualified to adopt
under that provision, the adoption decree still cannot be
granted because of the requirement in Art. 185 that spouses
must jointly adopt. They cannot do this in CAB because
Hughes is not qualified under the law.

Ng Hian vs. Collector of Customs


(1916)
FACTS: Marcosa married Ng Chion Te. She adopted his 2
children by a previous marriage and brought one of them to
the Philippines to study. The child, Ng Hian, was refused
entry into the Philippines.

32

HELD: Ng Hian may enter the Philippines by virtue of


being adopted by one who has a right to do so. In the case of
Ex Parte Fong Yim, it was held that a Chinese merchant
domiciled in the US has the right to bring into this country
with his wife minor children legally adopted by him in
China, where it is shown that the adoption was bona fide,
and that the children have lived as members of his family
and have been supported by him for several years.

XIII. Choice of Law in Property


A.

The Controlling Law

The first issue to resolve in conflicts cases involving property


is whether it is a movable or an immovable, because upon
this determination will depend the controlling legal system.

Immovables: regulated by lex situs; underlying this is the


characterization of immovable property as an isolated object
of rights so that the interests of various persons are
determined by the law of the place where the land is
situated.
The connecting factor is the immovable itself and not the
parties concerned.

Movables: not necessarily governed by the lex situs; its


transfer may be controlled by the a) lex domicilii, b) lex
situs, or c) lex loci actus (the proper law of transfer).
Lex domicilii: the rights over the movables are governed by
the law of the owners domicile.

Lex situs: the state where the property is situated has the sole
power to decide the validity and effects of the transfer of
property. Also, the parties legitimate expectations are
protected. The rationale for this is that being physically part
of the country, it should be subject to the laws thereof. The
situs is the place most closely and significantly related to the
issue in question.
Alternatives to lex domicilii and lex situs:
a)

Lex loci actus: law of the place where the


transaction was completed

b)

the proper law of the forum: law of the state which


has the most real connection with the transfer

In the Philippines, real and personal property are subject to


the law of the country where it is situated (Art. 16 CC). a
problem regarding classification will arise only when the
property is located in a foreign country which has a law that
distinguishes between real and personal property.

For real property, there is very little room for choice of law,
because of the emphasis on lex situs.
Why?
1)

Property physically a part of the particular state,


and that state can exercise JD over it (traditional
approach)
2) There is need for reliable records (to protect the
sanctity of records)
________________
B.

Capacity to Transfer or Acquire Property

This is governed by the law of the place where the property


is located.
Llantino vs. Co Liong Chong
(1990)
FACTS: The Llantinos leased real property to Chong, a
Chinese national (but subsequently naturalized as a Filipino),
for 60 years. The Llantinos filed an action to quiet title,
claiming that the lease contract was invalid for circumventing
the constitutional prohibition on the acquisition of land by
aliens.
HELD: The lease contract was valid, and Chong had the
right to hold by lease the property involved although at the
time of execution of the contract, he was still a Chinese
national. In CAB there was no option to buy the leased
property in favor of Chong. There is nothing in the record to
indicate any scheme to circumvent the constitutional
prohibition.
Aliens are not completely excluded by the Constitution from
use of lands for residential purposes. Since their residence in
the Philippines is temporary, they may be granted temporary
rights, such as a lease contract which is not forbidden in the
Constitution. The only instance where a lease contract may
be considered invalid is where there are circumstances
attendant to its execution which are used as a scheme to
circumvent the constitutional prohibition.

33

Cheesman vs. IAC


(1991)
FACTS: Thomas Cheesman (an American) was married to
a Filipina, Criselda. The spouses later separated; but
Thomas brought this action to annul the sale of real
property made by Criselda in favor of Padilla. He alleged
that the sale is void for lack of his consent. The property
sold was bought by Criselda using her personal funds, and
was registered in her name only.
HELD: The sale was valid. He has no capacity to question
the sale of the property by his wife on the theory that in
doing so he is merely exercising the prerogative of a husband
in respect of conjugal property. This would permit indirect
controversion of the constitutional prohibition. If the
property were to be declared conjugal, this would accord to
the alien husband an interest and right over the land, which
is not granted to him under the Constitution.
C.

Extrinsic and Intrinsic Validity of Conveyances

The lex situs law applies to the following:


1)

formalities of a contract to convey property

2)

the essential validity of the transfer (unless the lex


intentionis is clearly established)

3)

the effects of the conveyance or properties

D. Exceptions to the Lex Situs Rule


3 Exceptions to the Lex Situs rule:
1)

where the transaction does not affect transfer of


title to or ownership of the land (proper law: lex
intentionis or lex voluntatis)

Liljedahl vs. Glassgow


(1921)
FACTS: Bailey secured a debt payable in Iowa to Liljedahl;
as security, he mortgaged his land in Colorado. Bailey sold
this land to Glassgow, with the provision in the deed of sale
that the grantee agrees to pay the mortgagee. Glassgow sold
the land to a third party. Under Iowa law, Glassgow became
bound to pay the mortgage, but not under Colorado law.
HELD: Iowa law should apply, and Glassgow should pay
Liljedahl. Instruments of conveyance, as they relate primarily

to title, are to be construed according to the law of the situs.


But personal covenants or agreements in instruments of
conveyance will be given effect according to the law of the
place where the same is executed and to be performed.
2)

3)

in contracts where real property is offered by way


of a security for the performance of an obligation
such as loan, where the security is merely an
accessory contract (the principal contract is
governed by the rules on ordinary contract, while
the accessory contract on the land is governed by
the rule of lex situs)

testate or intestate succession and capacity to


succeed, which are governed by the national law of

2.

Situs of Money

Leon vs. Manufacturers Life Insurance: having been


endorsed in an annuity in Canada under a contract executed
in that country, Canada was the situs of the money, hence
the probate court of Manila has no JD over the funds.

3.

2 Kinds of Movable Property:


1)

choses in possession embraces all types of


tangible physical objects

2)

choses in action refers to intangible objects


a)
b)

mere rights of actions


rights represented by a document
(capable of delivery and susceptible to
negotiation as a separate legal entity)

or accidental.
Also, when the issue involves considerations other than the
validity and effect of the transfer itself, the courts may look
to the law of another state which has a real interest in
applying its law.

Rudow vs. Fogel: since the issue did not relate to land title
but to whether the conveyance would result in a constructive
trust among family members, the law applicable is the law of
the domicile of the trustor and trustee instead of the lex situs
of the property.
E.

Situs of Certain Properties

1.

Situs of Personal Property for Tax


Purposes

The maxim mobilia sequuntur personam cannot be applied


to limit the right of the state to tax property within its JD. It
yields to established facts of legal ownership, actual
presence, and control elsewhere, and cannot be applied if it
would result in inescapable and patent injustice.

Situs of Corporate Shares of Stocks

Under the Corporation Code (Sec. 63), shares of stock are


personal property and may be transferred by delivery of the
certificate or certificates indorsed by the owner or his
attorney in fact. But such transfer shall not be valid until
recorded in the books of the corporation in the manner
provided.

Situs of Debts

the decedent
Under a policy-centered approach, the forum court is not
bound to look to the law of the situs when the situs of the
movable property at the time of the transfer was insignificant

4.

Harris vs. Balk


(1905)
FACTS: Harris and Balk are both North Carolina
domiciliaries. Harris owed Balk a sum of money. When he
was in Baltimore he was served a writ of garnishment, it
appearing that Balk has a debtor there. He paid pursuant to
the writ, but when he returned to N. Carolina, Balk sued
him for recovery of his indebtedness. Harris pleaded the
recovery of the Maryland judgment.
HELD: The attachment of Harris debt is valid, and the
North Carolina court should give credit to the Maryland
judgment. The obligation of the debtor to pay his debt clings
to and accompanies him wherever he goes. He is as much
bound to pay his debt in a foreign state when therein sued
upon his obligation by his creditor, as he was in the state
where the debt was contracted.

Prof. Beale: this decision did injustice to the creditor, as he


has no power to fix the personal presence of his debtor at
one place or another. It is unjust to submit the creditors
claim to the accident of the debtors presence in one state or
another.

CIR vs. Anglo California National Bank


(1960)
FACTS: The Collector of Internal Revenue assessed
deficiency income taxes against Calamba Sugar Estates for
the capital gains on the sale of Pampanga Sugar Mills shares
of stock. The sales were conducted in SF, California, and
payments were made there.
HELD: CSE not liable for income tax on the capital gains.
The government cannot impose income taxes on capital
gains where the sale took place outside its territorial JD.
Foreign corporations may be levied income taxes only on
income derived from sources within the Philippines. With
respect to capital gains, the place of the sale (which in CAB
is California) is also the place or source of the capital gain.

F.

Patents, Trademarks, Trade Name, and Copyright

The Philippines is a party to the Union Convention for the


Protection of Industrial Property; said convention states in
Art. 8 that a trade name shall be protected in all the
countries of the Union without the obligation of filing of
registration, whether or not it forms part of the trade name.

Western Equipment and Supply Co. vs. Reyes; although


Western equipment has not done business in the
Philippines, it has the right to protect its reputation. The
right to the use of the companys corporate and trade name
is a property right which may be asserted against the whole
world.
RA 8293 (Intellectual Property Code): applicant cannot
register marks well known internationally and in the
Philippines, whether or not it is registered here, xxx and is
used for identical or similar goods or services.
Under Sec. 3 of the IPC, any foreign corporation which is a
national or domiciliary of a country which is a party to a
convention, treaty or agreement relating to intellectual

34

property rights to which the Philippines is also a party or


extends reciprocal rights to our nationals by law shall be
entitled to benefits to the extent necessary to give effect to
any provision of such convention
Philips Export vs. CA
(1992)
HELD: A corporations right to use its corporate and trade
name is a property right, a right in rem, which it may assert
and protect against the world in the same manner as it may
protect its tangible property, real or personal, against trespass
or conversion. It is regarded, to a certain extent, as a
property right and one which cannot be impaired or
defeated by subsequent appropriation by another
corporation in the same field.
Emerald Garment Mfg. vs. CA
(1995)
FACTS: H. D. Lee Co., a foreign corporation, filed a
petition for cancellation of registration of the trademark
Stylistic Mr. Lee used on items of clothing by Emerald
Garments, alleging that it so closely resembled H. D. Lees
trademark as to cause confusion, mistake and deception on
the public as to the origin of the goods.
HELD: A foreign corporation may have the capacity to sue
for infringement irrespective of lack of business activity in
the Philippines on account of Section 21-A of the
Trademark Law but the question of whether they have an
exclusive right over their symbol as to justify issuance of the
xxx writ will depend on actual use of their trademarks in the
Philippines.
XIV. Choice of Law in Contracts

2.

secure stability in commercial transactions


A.

Interpretations of contracts are applied only when the lex


loci intentionis cannot be ascertained.
Unlike family law, contract law does not reflect strong state
policies or values.
Extrinsic Validity of Contracts

Lex loci celebrationis governs the formal or extrinsic validity


of contracts. A contract is valid as to form if in accordance
with any form recognized as valid by the law of the country
where made, and that no contract is valid which is not made
in accordance with the local form.

Art 17, CC
The forms and solemnities of contracts, wills, and other
public instruments shall be governed by the laws of the
country in which they are executed.
As to Contracts entered into by cablegram, telex or fax: Art.
1319, CC states that acceptance made by letter or telegram
does not bind the offeror except from the time it came to his
knowledge. The contract is presumed to have been entered
into the place where the offer was made.

Contract: meeting of the minds between 2 persons whereby


one binds himself, with respect to the other, to give
something or render some service. Parties are bound not
only to those expressly stipulated but also to all the
consequences which according to their nature, may be in
keeping with good faith, usage and law.
As a gen. rule, unless provided by law or in the
agreement, a contract is obligatory in whatever form it may
have been entered into provided that all the essential
requisites for validity are present.
Principal purposes of contract:
1. protect the reasonable expectations of the parties to the
contract

C.

Intrinsic Validity of Contracts

Intrinsic validity refers to nature, contents and effects of the


agreement.

Art. 1318, CC: requisites of a contract


a.
b.
c.

law of the place of the making


law of the place of performance
law intended by the parties

Contracts Involving a Foreign Element

States, in their municipal laws, have different rules on the


formalities of a contract, the capacity of parties, and the
essential requisites for the intrinsic validity of contracts,
interpretation and the law governing execution. Forum court
should be aware if there is a law that parties have in mind
when they entered into a contract.

B.

1.
2.
3.

consent of the contracting parties


object certain
cause of the obligation

There are 3 possible laws that will govern intrinsic validity of


contracts:

35

1.

Lex Loci Contractus

This refers to the law of the place where the contract is


made. This is the place where the last act is done which is
necessary to bring the binding agreement into being so far as
the acts of the parties are concerned.
Advantages:
a)

relative ease in establishing place of


contracting

b)

in applying it consistently, certainty and


stability are achieved.

Disadvantage: it will lead to unjust results when the place of


making is entirely incidental or casual and has no significant
relationship with the contract or its performance.

2.

Lex Loci Solutionis

This refers to the law of the place of the performance. All


matters relating to time, place, manner of performance,
sufficiency of performance and valid excuses for nonperformance are determined by lex loci solutionis because it
is undoubtedly related to the contract in a significant way.
Macmillan & Bloedel vs. Valderama & Sons
(1964)
FACTS: Valderama & Sons, thru an n agent, entered into a
contract for purchase of railroad equipment with Macmillan
in Canada. Valderama failed to get an import license
because the Import Control Comm failed to act on his
application. Macmillan suffered damages because it had to
cancel the freight engagement.
HELD: Lex loci solutionis applies. The general rule
governing the validity & construction of a contract & the
rights and liabilities thereunder is that the law of the place of
performance applies.
In case of conflict in determining validity, nature and
obligation and effect of contract, lex loci solutionis prevails
over lex loci contractus.

The laws of Canada, which is the place of performance,


should apply. The failure of the Import Control Comm. to
act on the application of import license cannot constitute a
legal excuse for his failure to perform his obligations under
the contract.

3.

Lex Loci Intentionis

This refers to the law intended by the parties. When the


parties stipulate that the contract be governed by a specific
law, such will be recognized unless there are cogent reasons
for not doing so e.g. the choice-of-law provision is contrary
to a fundamental policy of the forum.
Also construction and interpretation of contracts may be
agreed upon by parties.

Art 1306, CC
The contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient,
provided that they are not contrary to law, morals, good
customs, public order or public policy.

Art, 1370, CC
If the terms of the contract are clear and leave no doubt
upon the intention of the contracting parties, the literal
meaning of the stipulations shall control.
The law looks at the acts of the parties and the surrounding
circumstances which may possibly have exerted some
influence upon their actions and then assumes that their
intentions are in harmony with such acts and circumstances.
Parties are presumed to contemplate to enter into a valid
contract. The court should apply the law that will sustain the
contract.
D. Capacity to Enter into Contracts
The capacity to enter into contracts is governed by the rule
on status and capacity (personal law). In countries that follow
the nationality principle, the national law prevails (art. 15,
CC). In countries that follow the domiciliary principle, law of
their domicile governs.
E.

Choice of law Issues in Conflicts Contracts Cases

1.

The parties may stipulate on the venue of the suit in case of


litigation concerning the contract.
It is a general rule that plaintiff has the option to choose the
venue where the suit is to be filed in action in personam.
However, a case arising from the contract will be litigated
only in the forum chosen by the parties if the choice of
forum clause specifically identifies it as the only venue.

Sec. 80, Sec. 3, Restatement Second. If the parties have


agreed in writing that an action shall on a controversy be
brought only in another state and it is brought in a court of
this state, the court will dismiss or stay the action, unless:
1.

the court is required by statute to entertain


the action
2. plaintiff cannot secure effective relief in other
state for reasons other than delay
3. the other state would substantially be a less
convenient place of trial
4. the agreement as to place of action was
obtained by misrepresentation, duress, abuse
of economic power or other unconscionable
means
5. it would be unfair or unreasonable to enforce
the agreement
Compagnie de Commerce vs. Hamburg Amerika
(1917)
FACTS: Compagnie (french) and Hamburg (Germany)
entered into a charter party to transport Cs goods from
Saigon- Europe. Because of the impending war between
France & Germany, the ship went to Manila because Saigon
is a French port. C filed for breach of contract. H contested
the jurisdiction of Phil courts to try the case because the
contract had a clause directing the settlement of disputes first
to a Board of Arbitration in England.
HELD: Phil. courts have jurisdiction. The parties are free
to waive the stipulation if they so desired.
Phil courts cannot be ousted of their jurisdiction by the
contractual stipulation in the absence of averment and proof
that under the law of England (place of contracting),
compliance with, or an offer to comply with such a
stipulation constitutes a condition precedent to the
institution of judicial proceeding for the enforcement of the
contract.
Besides, Hamburg appeared and answered without objecting
to the courts jurisdiction; it also sought affirmative relief.

Choice of Forum Clause

36

King Mau vs. Sycip


(1954)
FACTS: King Mau entered into an agency agreement with
the Sycip in New York. King mau was able to sell 1,000 tons
of coconut oil. KM brought an action to collect commission
from the sale. Sycip claimed that the Phil court has no
jurisdiction as the contract was entered in New York.
HELD: Phil court has jurisdiction. A non-resident may sue a
resident in the courts of this country where the defendant
may be summoned and his property leviable upon execution
in case of a favorable, if final and executory judgment.
It is a personal action for the collection of a sum of money
which the CFIs have jurisdiction to try and decide.

HSBC vs. Sherman


(1980)
FACTS: HSBC granted Eastern Book Supply an overdraft
secured by the directors of the latter. Eastern failed to pay.
HSBC filed suit in RTC. The defense of the directors is that
Phil courts have no jurisdiction because in the Guarantee
Agreement, it was provided that Singapore shall have
jurisdiction over all disputes arising therein.
HELD: Phil courts have jurisdiction. The parties did not
stipulate that only the courts of Singapore, to the exclusion
of all the rest, has jurisdiction. Neither did the clause in
question operate to divest Phil. courts of jurisdiction.
Jurisdiction is defined as the right of a State to exercise
authority over persons and things within its boundaries
subject to certain exceptions. This authority is exclusive
within and throughout the domain of the State.

Pangalangan: HSBC case is disappointingwhy did the


courts not recognize the choice of forum clause? Courts are
turf-conscious; for PRIL to progress, there is a need for
each country to give up some of its exercise of sovereignty.
_______________

2.

Contracts with Arbitration Clause

Puromines vs CA
((1993)
FACTS: Puromines and Philip Bros. entered into a contract
of sale with an arbitration clause. Puromines filed for
complaint in RTC, Manila. Philip Bros. filed a MTD on the
basis of an arbitration clause.
HELD: Arbitration clause is valid. Puromines derives its
right from the bill of lading together with the sales contract &
it is bound by the provisions and terms of the bill of lading
and of the arbitration clause incorporated in the sales
contract.
The courts will look with favor upon such amicable
settlements (arbitration) and will only interfere with great
reluctance to anticipate or nullify the action of the arbitrator.
The Bremen vs. Zapata
(1972)
FACTS: Zapata, a Houston company, entered into a
contract of towage with Unterweser, a German corp.
Contract contained a forum selection clause which provides
that any dispute arising must be treated before London
courts.
Zapata filed a suit in admiralty against Unterweser for breach
of contract and damages in Florida District Court.
Unterweser filed motion to dismiss for lack of jurisdiction
citing the forum-selection clause.
HELD: Florida court has no jurisdiction. As a rule, a forum
clause should control absent a strong showing that it should
be set aside. Court should enforce the forum clause
specifically unless Zapata could clearly show that
a.
b.
c.
d.

enforcement would be unreasonable and unjust or


that the clause was invalid for such reasons as fraud or
overreaching or
if enforcement would contravene a strong public policy
of the forum in which suit is brought, whether declared
by a statute or by judicial decision or
if the chosen forum is seriously inconvenient for the
trial of the action. But if the parties contemplated the
claimed inconvenience, it should not be heard to
render the forum clause unenforceable.

The CAB involves a freely negotiated international


commercial contract between the parties. As noted, selection
of a London forum was clearly a reasonable effort to bring
vital certainty to this intl transaction and to provide a neutral

forum experienced and capable in the resolution of


admiralty litigation.

3.

demand and the unexplained delay in acting on her claim,


amounted to bad faith and renders unquestionable its
liability for damages.

Adhesion Contracts

Adhesion contract is one that is not negotiated by the parties


having been drafted by the dominant party and usually
embodied in a standardized form. It is called a contract of
adhesion because the participation of 1 party is limited to
affixing her signature.
Pan Am World Airways vs. Rapadas
(1992)
FACTS: Rapadas samsonite was lost and Pan Am offered to
settle the claim for $160. Rapadas refused and filed an
action in court. The defense of Pan Am is that the claim is
subject to the Notice of baggage Liability Limitations
contained in the passenger ticket.
HELD: The liability is limited by the Notice of Baggage
liability. Although the ticket is a contract of adhesion, it does
not offend against the policy of the law forbidding one from
contracting against his own negligence. The one who adheres
to the contract is in reality free to reject it entirely. Court
finds the provisions in the plane ticket sufficient to govern
the limitations of liabilities of the airline for loss of luggage.
The passenger, upon receiving his plane ticket, was expected
to be vigilant insofar as his luggage is concerned.
PAL vs. CA
(1996)
FACTS: Mejia shipped through PAL 1 microwave oven
from San Francisco to Manila. Upon arrival, she discovered
that the front glass door was broken and the oven could not
be used. Mejia filed action against PAL. PAL denied liability
and alleged that it acted in conformity with the Warsaw
Convention.
HELD: Although the airway bill is binding between the
parties, the liability of Pal is not limited on the provisions of
the airway bill. While the Warsaw Convention is law in the
Philippines, the Philippines being a signatory thereto, it does
not operate as an exclusive enumeration of the instances
when a carrier shall be liable for breach of contract or as an
absolute limit of the extent of liability nor does it preclude
the operation of the Civil Code or other pertinent laws.
Also, the willful misconduct and insensitivity of the officers
of PAL in not attempting to explain the damage despite due

37

Specific Instances where court disregarded the adhesion


contract:
1)

when the party is not literate in the language of


the contract with knowledge of what was intended

2)

when there is undue advantage made by a


dominant party usually a huge corporation or a
business monopoly

3)

when there is ambiguity in the adhesion contract,


it must be resolved contra preferentum and in
favor of the party impugning it

4)

when it is subversive of public policy when the


weaker party is imposed upon in dealing with the
dominant bargaining party and is reduced to the
alternative of taking it or leaving it, completely
deprived of the opportunity to bargain on equal
footing

Sweet Lines vs. Teves: Petitioners assail the validity of the


tickets issued by Sweet Lines.
HELD: The adhesion contract is void. It is not just and
proper to expect that the passengers examined their tickets
from the crowded counters esp. if there are a number of
conditions in fine print. Also, shipping companies, esp.
inter-island vessels, possess a virtual monopoly over the
business of transporting the passengers between ports
covered by their franchise. Lastly, the court took judicial
notice of the fact that these passengers come from lowincome groups and are less literate and who have little or no
choice but to avail of petitioners vessels.

Parties may include any stipulation as long as such


stipulations do not violate public policy or morals of the
forum.
Lessons:
PanAm: not all contracts of adhesion are against
public policy; balancing of interests (airline vs.
passenger)
PAL vs. CA: when there is ambiguity in adhesion
contract, construe against the drafter.
________________

Liabilities of the Carrier:

4.

Special Contracts
a.

In sales or barter of goods, the law of the place where the


property is located will govern (lex situs).

b.

A simple loan granted by financial institutions is governed by


the law of the permanent place of business. But if granted by
a private individual, it is governed by the law of the place
where the loan was obtained.
c.
In contracts of pledge, chattel mortgage and antichresis, the
extrinsic and intrinsic validity of the contracts are governed
by lex situs.
d.

Carriage of Goods by Sea


e.
American President Lines vs. Klepper
(1960)
FACTS: K shipped on board APLs vessel personal effects.
Because of damage to the effects, K sued APL. CA affirmed
CFIs finding of liability but awarded damages on the basis of
the COGSA.
HELD: COGSA does not apply but the Civil Code. Article
1753 of the Civil Code provides that the law of the country
to which the goods are to be transported shall govern the
liability of the common carrier in case of loss, destruction or
deterioration. Under Article 1766, "In all matters not
regulated by this Code, the rights and obligations of
common carriers shall be governed by the Code of
Commerce and by special laws," and in the Civil Code there
are provisions that govern said rights and obligations.
Although Section 4 (5) of the Carriage of Goods by Sea Act
states that the carrier shall not be liable in an amount
exceeding $500.00 per package unless the value of the goods
had been declared by the shipper and inserted in the bill of
lading, this is merely suppletory to the provisions of the Civil
Code.

Contracts for International Air Transportation


The Warsaw Convention and amendments to the same
regulate and establish uniform rules and regulations on the
liability of international airline carriers in cases of death,
injuries of passengers or loss or damage of cargo. The Phils.
became a member thereof in 1951.

in case of death or wounding- carriers liability is not


more than $75,000.
The limits do not apply when the damage is caused by
the act or omission of the carrier, his servants or agents,
done with the intent to cause damage or recklessly and
with knowledge that damage would probably result,
provided that the agent was acting within the scope of
his employment.
In case of loss or damage to baggage - $20/kilo for
checked baggage and $400/passenger for unchecked
luggage unless a higher valuation is agreed upon by the
parties
Prescription. Action must be brought within 2 years
from date of arrival at the destination, or from date
which the aircraft ought to have arrived or from the
date on which the transportation stopped.
Venue. Any action for damages may be brought either
in the court of the
1. domicile of the carrier
2. principal place of business
3. place of business where the contract was made
4. place of destination
5. Successive Carriers. Each of the successive carriers
is bound by the rules on the Convention and shall
be deemed to be one of the contracting parties
insofar as the part of the transportation which is
performed under his supervision. But for goods or
baggage, the passenger or consignor has a right of
action against the first carrier and the consignee
who is entitled to receive the same, against the last
carrier. They must take action against the carrier
who performed the transportation during which
the loss, damage or delay took place.

Lopez vs. Pan Am


(1965)
FACTS: Despite several confirmations, Sen. Lopez and his
family failed to get 1 class seats and were constrained to
board as tourist passengers of PanAm. CFI, Rizal awarded
damages in their favor. Pan Am admitted the breach of
contract but not the finding of bad faith
st

HELD: Pan Am acted in bad faith. Pan Am misled the


Lopezes into believing the reservations were valid and was
prompted by self-interests in dong the same (precluding the
Lopezes to secure other tickets). Also, there was negligence
by its employees that were so gross and reckless as to
amount to malice and bad faith, e.g. erroneous cancellation
of reservation, not confirming reinstatement of reservation,

38

confirming reservation even if EE had knowledge that they


were merely waitlisted and not notifying Lopezes of the
cancellation.
KLM Royal Dutch vs. CA
(1975)
FACTS: Mendozas went on a world tour. KLM issued the
tickets for the whole trip. Their coupon for Aer Lingus was
marked RQ. Thru KLMs help, reservations were made in
the Aer Lingus flight. Upon arrival, only the minors were
allowed to board. Mendoza sued for breach of contract and
for damages bec. of the humiliation they suffered. KLM
denied liability on the basis of Art. 30 of the Warsaw
Convention (successive carriers liability)
HELD: Art. 30 does not apply and KLM should be
accountable for the tortious act of Aer Lingus.Art. 30
presupposes either an accident or delay and not the situation
in CAB. Although the tickets provide that KLMs liability for
damages is limited to occurrences in its own airlines, this
provision was printed in very small letters such that a
magnifying glass is needed to read it. It would be unfair to
charge Mendozas of automatic knowledge and it is the duty
of KLM to inform them of the conditions prescribed in the
tickets or at least make sure that they read them before they
accepted the tickets. This it failed to do.

American Airlines vs. CA


(2003)
FACTS: Mendoza bought conjunction tickets from
Singapore Airlines. Although it was not a participating
airline, AA exchanged the unused portion of the ticket for a
one-way ticket to New York. However, Mendoza was
prevented by AAs security officers from boarding until all
the other passengers have boarded. He sued action for
damages against AA in RTC. AA claimed that the issuance
of a new ticket created a separate contract of carriage from
the one with SA and therefore, under Art. 28, RTC had no
jurisdiction over the case against AA.
HELD: RTC had jurisdiction; the new ticket is not
considered as separate from the one issued by SA but the
contract of carriage constitutes a single operation. SA & AA
are members of the IATA and under the general pool
partnership agreement they act as agents of each other in the
issuance of tickets to contracted passengers. When AA
exchanged the ticket, it entered it in the IATA clearing
house and undertook to transport M. It thereby assumed the
obligation to take the place of the principal carrier originally

designated and constituted itself as an agent of SA. The


number of tickets issued does not detract from the oneness
of the contract of carriage as long as the parties regard the
contract as a single operation.
Chiok vs. China Airlines
FACTS: Chiok purchased ticket from CAL exclusively
endorsable to PAL. While in Hkong, his flight was
confirmed by both CAL and PAL attaching their respective
stickers. On the day of his flight to Manila, he was informed
by a PAL employee that he was not in the computer list so
he was not allowed to board. Using another CAL ticket, he
was able to return to Manila. C sued CAL. CAL denied
liability as the carriage was performed by PAL.
HELD: Cal is liable. The ruling in KLM is applicable. The
contract was between CAL and C, with the former endorsing
to PAL the HK-Mla segment. This can be treated as a single
operation under Art. 15, IATA Rules and Art. 1 of the
Warsaw Convention
Art. 1, Sec. 3 WC: transportation to be performed by several
successive carriers shall be deemed to be one undivided
transportation, if it has been regarded by the parties as a
single operation, whether it has been agreed upon under the
form of a single contract or of a series of contracts.
Art. 15 IATA: carriage to be performed by several
successive carriers under one ticket, or under a ticket and
any conjunction ticket issued therewith, is regarded as a
single operation.
Pal acted as carrying agent of CAL, thus, CAL cannot evade
liability.
Santos III vs. Northwest Airlines
(1992)
FACTS: Santos bought a roundtrip (SF-Manila-SF) ticket
from NW airlines office in SF. Despite previous
confirmations, he was informed that he had no reservation
on his trip. He sued NW for damages in RTC Makati. NW
filed MTD for lack of jurisdiction.
HELD: Phil court has no jurisdiction to hear the case under
Art. 28 of the Warsaw Convention. This article enumerates
the places where action must be filed, to wit:
1. Domicile Minnesota, USA (domicile must be
understood in the English sense place of
incorporation)
2. principal place of business Minnesota

3.

place of business where contract is made San


Francisco
place of destination San Francisco (not Manila
because it was merely an agreed stopping place, SF is
still the ultimate place of destination

2)

if it ousts the jurisdiction which the court has


already acquired over the parties and the subject
matter

3)

if it affects a public policy or the matter is heavily


impressed with public interest

Distinction between KLM and China Air: in KLM, KLM


was the only company the passenger dealt with; in Chiok, it
was alleged that Chiok himself (passenger) requested for the
PAL booking. It can then be argued that CAL should not be
held liable.
________________

4)

in case of confession-of-judgment clauses (waives


the debtors right to receive notice or authorizes
entry of judgment)

4.

F.

The Applicable law in the absence of an Effective


Choice

According to the 2 Restatement, in the absence of an


effective choice of law, these factors will be considered in
determining the state with which contract has its most
significant relationship
nd

1.
2.
3.
4.
5.
6.

place of contracting
place of negotiating of the contract
place of performance
situs of the subject matter of the contract
domicile, residence, nationality, place of incorporation
and place of business
place under whose local law the contract will be most
effective

Courts should localize the contract by examining the


contacts it has with a state relative to the cogency to the issue.
Example: For contracts involving liability for destruction of
goods in transit, the state of the most significant relationship
is the state of destination.
In the absence of an effective choice of law, courts applying
a policy-centered approach will apply its own law when there
are significant contacts with the transaction. Once these exist,
the forum has a real interest in applying its own law and such
would not be fundamentally unfair to the parties. The court
should also consider the legitimate expectations of the
parties.
G. Limitations to Choice of Law
1)

if the law selected has no connection at all with the


transaction or the parties

39

XV. Choice of Law in Wills, Succession and Administration


of Estates

Will or testament: act whereby a person is permitted, w/


formalities prescribed by law, to determine to a certain
extent the distribution of his estate to take effect after his
death.
It is a disposition made by a competent testator in the form
prescribed by law of property over which he has legal power
of disposition
Conflicts of Law Perspective:
Will: an involuntary transfer of property, because it comes
into effect only upon death of owner. Death is involuntary,
thus making a will is an involuntary transfer of property.
Wills are governed by the proper law
o common law- law of domicile of testator
o civil law- national law of testator
A. Extrinsic Validity of Wills
Filipino national making a will abroad may comply with:
o lex nationalii (no express provision) or
o lex loci celebrationis (Art 17, 815)
Pertinent Conflict-of-law rules:
(referring to law of place where will was executed as law
governing forms & solemnities of will)
Art 17: The forms and solemnities of contracts, wills, and
other public instruments shall be governed by the laws of the
country in which they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of the

Philippines in a foreign country, the solemnities established


by Philippine laws shall be observed in their execution.
Prohibitive laws concerning persons, their acts or property,
and those which have for their object public order, public
policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.

Art 815: When a Filipino is in a foreign country, he is


authorized to make a will in any of the forms established by
the law of the country in which he may be. Such will may be
probated in the Philippines. (n)

What is the proper law for wills written abroad by Filipinos?


(There is no express provision that it is lex nationalii)
Tolentino:
Art 815 follows general rule of lex loci celebrationis.
The Civil Code did not mean to invalidate the will of a
Filipino made in conformity w/ Phil law.
Aliens making wills outside the Philippines are, under Art
816 & 817, permitted to follow:
o lex nationalii
o lex domicilii
o lex loci celebrationis

Article 816. The will of an alien who is abroad produces


effect in the Philippines if made with the formalities
prescribed by the law of the place in which he resides, or
according to the formalities observed in his country, or in
conformity with those which this Code prescribes. (n)

Article 817. A will made in the Philippines by a citizen or


subject of another country, which is executed in accordance
with the law of the country of which he is a citizen or subject,
and which might be proved and allowed by the law of his
own country, shall have the same effect as if executed
according to the laws of the Philippines. (n)
It cannot be assumed that the Code places a Filipino citizen
in a worse position than an alien in relation to our law.
The Code should have expressly stated this considering
general provision in Art 17.

In re Estate of Johnson
(1918)
FACTS: Ebba Ingeborg sought to annul the probate of the
will of his father Emil Johnson, because the resulting
intestacy would be favorable to her as a sole heir. She
stresses that Section 636 of the Code Of Civil Procedure
should not govern the will executed by her father in the US,
because the word state in the body of the section is not
capitalized (thus not referring to a State in the US).
HELD: This interpretation is erroneous because the full
phrase another state or country, means that the section
refers to either a State in the US or another country. The
admission of the will to probate by the CFI of Manila under
Section 636 was therefore correct. Although the CFI Of
Manila most likely erred in taking judicial notice of Illinois
law when it promulgated that the will was executed in
conformity with the laws of Illinois, Ebba is now precluded
to raise this issue because the petition to annul the probate
did not allege the difference between Philippine Law and
Illinois law.

Joint wills executed in the Philippines by aliens (whose laws


do not prohibit it): the law is silent
It is suggested that such will should not be probated if it
affects heirs in the Philippines (in accordance with the
expressed policy in Art 819).

Extrinsic Validity of Holographic Wills


Art 810: a holographic will is one entirely written, dated and
signed by the hand of the testator himself. It is not subject to
any other form, need not be witnessed and may be made in
or out of the Philippines.

Art 816 & 817 are also applicable to holographic wills


Merits:

Extrinsic Validity of Joint Wills


Art 818. Two or more persons cannot make a will jointly or
in the same instrument, either for their reciprocal benefit or
for the benefit of a third person.
Joint wills are prohibited on grounds of public policy,
because:
1)

a will is a purely personal & unilateral act & this is


defeated if 2 or more persons make their will in
the same instrument

2)

the revocable character of a will is defeated,


because if one of testators revoke the will, the
other testators will have no instrument left

3)

it exposes a testator to undue influence & may


even tempt one of testators to kill the other

4)

when a will is made jointly or in same instrument,


the more aggressive spouse is liable to dictate the
terms of the will for his/her own benefit
- where will is also reciprocal, either of the
spouses who may be wicked may be tempted to
kill the other.

Joint wills executed by Filipinos in a foreign country allowing


joint wills are expressly invalidated by law.

40

o
o
o
o

simple
convenient
does not require notarization
guarantees absolute secrecy

o
o
o

peculiarly dangerous
an invitation to forgery
short
statements
can
handwriting experts

Demerits:
confuse

Babcock Templeton vs. Rider Babcock


(1928)
FACTS: The will of Jennie Rider Babcock was executed in
California. Babcock Templeton, being the mother of the
three beneficiaries of the will, stressed that the laws of
California should govern the probate since Jennie Rider
Babcock acquired domicile in California. William Rider
Babcock opposes this by stressing that her sister never
acquired domicile in California as her latest domicile was
New York.
HELD: Her domicile was California, because even though
she later left California for New York, she never intended to
be a New York domiciliary. The trial court was also correct
in admitting the will for probate under Section 636 of the
Code Of Civil Procedure, because the length of time of her
residence in and eventual death in the Philippines did not
result into a loss of her US citizenship. She never intended
to become a Philippine domiciliary, thus making Section
618 inapplicable to the will she executed abroad.

B. Intrinsic Validity of Wills

one of property and not of succession, thus making


Philippine law the governing law as the lex rei sitae.

- governed by lex nationalii

Art 16: Real property as well as personal property is subject


to the law of the country where it is stipulated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national
law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of
the country wherein said property may be found. (10a)

Miciano vs. Brimo: Miciano, as the administrator of the


estate of Joseph Brimo, filed a petition for the partition of
the estate. Andre Brimo opposed the partition because the
will itself was not executed in accordance with the laws of
Turkey, in violation of Article 10 of the Civil Code.
The Court decided that although Andre Brimo opposed his
brothers intention to have Philippine laws apply he was not
deemed to have contested the legacy, because the choice of
law clause in the will was contrary to law. Our laws apply the
lex nationalii of decedent to determine intrinsic validity of a
will and this law was purposefully disregarded by decedent.
The Court considered this clause as not imposed and shall
I no manner prejudice the heir even if the testator should
otherwise provide.

Cayetano vs. Leonidas


(1984)
FACTS: Upon the death of Adoracion Campos, her father
Hermogenes sought to be declared as owner of the entire
estate as the only compulsory heir. On the other hand,
Nenita Paguia (one of Adoracions sisters) sought the
reprobate of the will executed by Adoracion in the US.
When the trial court allowed probate of the will in the
Philippines, Hermogenes raised in issue that the allowance
of the will to probate divested him of his legitime, because
the will preterited him.
HELD: Since the governing law with respect to the amount
of successional rights is the national law of the decedent, the
governing law of Adoracions will is Pennsylvania law. And
since Pennsylvania law does not have a system of legitimes,
Hermogenes is therefore not preterited. Although the
Philippines adopt a system of legitimes as a matter of public
policy, such policy does not extend to the successional rights
of foreigners.

General Rule: the probate court can only rule on:


1) extrinsic validity
2) due execution
3) testamentary capacity
4) compliance with requisites/solemnities prescribed
by law
__________________

Presence of ambiguous provisions


Presumptions to help interpretation:
1) The interpretations of such should be determined in
accordance w/ laws & customs of that state most probably in
mind of testator
2) In case a will admits of different dispositions, the
interpretation by which the disposition is to be operative
shall be preferred

Article 788. If a testamentary disposition admits of different


interpretations, in case of doubt, that interpretation by which
the disposition is to be operative shall be preferred. (n)
D. Revocation

Article 829. A revocation done outside the Philippines, by a


person who does not have his domicile in this country, is
valid when it is done according to the law of the place where
the will was made, or according to the law of the place in
which the testator had his domicile at the time; and if the
revocation takes place in this country, when it is in
accordance with the provisions of this Code. (n)
Revocation:
1. lex loci celebrationis
2. lex domicilii
3. according to our Code

Article 830. No will shall be revoked except in the following


cases:
1)
2)

By some will, codicil, or other writing executed as


provided in case of wills; or

3)

By burning, tearing, canceling, or obliterating the


will with the intention of revoking it, by the testator
himself, or by some other person in his presence,
and by his express direction. If burned, torn,
cancelled, or obliterated by some other person,
without the express direction of the testator, the
will may still be established, and the estate
distributed in accordance therewith, if its contents,
and due execution, and the fact of its unauthorized
destruction, cancellation, or obliteration are
established according to the Rules of Court. (n)

Criticisms on the Miciano vs. Brimo decision:


Considering the primacy of giving primacy to the last will
and testament of the decedent, the court should have
respected the wishes of the decedent (i.e. the clause in the
will should not have been annulled) by applying a policycentered approach.
Using the most significant relationship approach, Philippine
law would govern because Joseph Brimo is a Philippine
resident, the properties are in here, and he made the will
here the only contact with Turkey is the fact of his
nationality.
Under the escape device of disingenuous characterization,
the same result could have resulted without flouting testators
will. The court could have characterized the main issue as

C.

Interpretation of Wills

Interpretation of wills is to be governed by lex nationalii.


If terms are clear & unambiguous: lex intentionis
When there are ambiguous provisions: intention of party
may be inferred by referring to context of the will & the
testators acts.

Article 1371. In order to judge the intention of the


contracting parties, their contemporaneous and subsequent
acts shall be principally considered. (1282)

Article 1375. Words which may have different significations


shall be understood in that which is most in keeping with the
nature and object of the contract. (1286)

41

By implication of law; or

Problem: Testator revokes his will in then domicile State A


and dies in his new domicile State B. If his revocation under
the laws of State A is invalid under State B laws, what law will
apply?

Common law practice: law of the domicile at the time of


death.
Philippine law: law of the place of revocation.

Section 1. Will proved outside Philippines may be allowed


here. Wills proved and allowed in a foreign country,
according to the laws of such country, may be allowed, filed,
and recorded by the proper Court of First Instance in the
Philippines.

Testamentary capacity is the capacity to comprehend the


Notice that there is a difference in the applicable law
governing revocation of wills by a person domiciled in the
Philippines and a non-domiciliary:
For domiciliary: the governing law is the law of the
place where the revocation was made (lex actus)
For non-domiciliary: the governing law is the law
where the will was executed (lex loci celebrationis)
__________________
E.

Probate

Probate: an adjudication that the last will and testament of a


person was executed with all the formalities required by law
As part of procedural law, probate is governed by the law of
the forum.
But the forum will still have to look at the foreign law
concerning compliance with extrinsic validity.

Rule 76 Section 9 Grounds for disallowing will.: The will

nature of the transaction in which the testator is engaged at


the time, to recollect the property to be disposed of and the
persons who would naturally be supposed to have claims
upon the testator, and to comprehend the manner in which
the instrument will distribute his property among the objects
of his bounty. (Bugnao vs. Ubag, 014 SCRA 163)
Rule 77 Section 1 + testamentary capacity - will made in a
foreign country allowed here in the Philippines !!! (see
Article 816)
A will allowed in a foreign country in accordance with the
law of that country may be allowed in the Philippines no
need to prove testamentary capacity and due execution (see
Article 817).
Common Law conflicts rules
1) If the will is valid under the laws of the last
domicile, the will is valid everywhere with respect
to movable property

2)

but the probate in the last domicile does not affect


real property, as these will be governed by lex rei

sitae

shall be disallowed in any of the following cases;


(a) If not executed and attested as required by law;
(b) If the testator was insane, or otherwise mentally incapable
to make a will, at the time of its execution;
(c) If it was executed under duress, or the influence of fear,
or threats;
(d) If it was procured by undue and improper pressure and
influence, on the part of the beneficiary, or of some other
person for his benefit;
(e) If the signature of the testator was procured by fraud or
trick, and he did not intend that the instrument should be
his will at the time of fixing his signature thereto.

Rule 77

Suntay vs. Suntay


(1954)
FACTS: Natividad Billian sought to have the will (executed
in the Philippines) of his husband Jose Suntay probated.
The trial court denied probate because during the course of
the proceedings, the will was lost. Later, her son Silvino filed
a petition for the probate of a will allegedly executed by
Suntay in China. The trial court again denied probate, and
was correct in deciding that way, because there was no proof
that:
1. the municipal district court of Amoy, China, is a
probate court
2. there was a law of China on procedure in the
probate or allowance of wills
3. the legal requirements for the execution of a valid
will in China in 1931 were satisfied
4. the order of the municipal district court of Amoy
purports to probate the will

42

HELD: In the absence of proof that the municipal district


court of Amoy is a probate court and on the Chinese law of
procedure in probate matters, it may be presumed that the
proceedings in the matter of probating or allowing a will in
the Chinese courts are the same as those provided for in our
laws on the subject. Because of this, rules on notice must be
followed. Since Silvino did not cause the notification of the
other heirs, this petition must fall.
Vda. De Perez vs. Tolete
(1994)
FACTS: Each of the Cunanan spouses (Jose and Evelyn)
executed a will in New York containing similar provisions on
the presumption of survivorship. When the entire family
perished in a fire that gutted their home in New York, Rafael
as the named trustee in the will of Jose filed separate
proceedings in New York for the probate of the wills of his
brother and sister-in-law. Later, Salud Perez (mother of
Evelyn) filed a petition for reprobate in Bulacan. Rafael
opposed by arguing that Salud was not an heir as per New
York law which must be the law that should govern the wills
as they were executed in New York. In deciding the matter,
the necessary evidence that should be submitted are:
(1) the due execution of the will in accordance with
the foreign laws
(2) the testator has his domicile in the foreign country
and not in the Philippines
(3) the will has been admitted to probate in such
country
(4) the fact that the foreign tribunal is a probate court
(5) the laws of a foreign country on procedure and
allowance of wills.
Except for the first and last requirements, the petitioner
submitted all the needed evidence. Salud failed to submit
the 1 and 5 requirement. While the probate of a will is a
special proceeding wherein courts should relax the rules on
evidence, the goal is to receive the best evidence of which
the matter is susceptible before a purported will is probated
or denied probate. Not only that, Salud also failed to notify
the heirs of Jose of the proceedings.
st

th

HELD: The rule that the court having jurisdiction over the
reprobate of a will shall "cause notice thereof to be given as
in case of an original will presented for allowance" means
that with regard to notices, the will probated abroad should
be treated as if it were an "original will" or a will that is
presented for probate for the first time. Accordingly,
compliance with Sections 3 and 4 of Rule 76, which require
publication and notice by mail or personally to the "known

heirs, legatees, and devisees of the testator resident in the


Philippines" and to the executor are required.
F.

succession national law


administration situs of property (territorial/JDal)
______________

In determining the applicable law, consider the policies of:


a) upholding the justified expectation of parties, and b)
minimizing the adverse consequences that might follow from
subjecting a party to the law of more than one state.

Administration of Estates
Conflicts torts cases arise:

G. Trusts
Duties of the administrator:

Trust: a right of property, real or personal, held by one party


1)

to manage and settle the debts of the decedent


(primary purpose)

2)

to distribute the residuum of the estate to the heirs


(secondary purpose)

When the will has been proved or allowed, it is the duty of


the probate court to issue letters testamentary thereon to the
person so named in the will upon the latters application.
When there is no will, the court may appoint an
administrator.

Two kinds of administrators:


a)

domiciliary -power over assets located in state

b)

ancillary- appointed by a foreign court to look


after the properties located in such foreign state

HELD: The appeal must fail. BCI is a Philippine


corporation owing full allegiance and subject to the
unrestricted jurisdiction of local courts. Its shares of stock
cannot therefore be considered in any wise as immune from
lawful court orders. The situs of shares of stock is the place
of domicile of the corporation. And since the power of the
ancillary administrator over shares located here is beyond
question, it follows that the stocks should be in the
possession of Tayag.

Succession and administration of estates are governed by


different laws:

when the tortious conduct and place of resulting


injury are different and one state imposes higher
standards than the other state

2)

when there are different product liability laws and


varying judicial interpretations of the extent of
liability

The trust contains an express choice-of-law provision.


The courts usually apply that law in keeping with the policy
of carrying out the intent of the creator of the trust.
When the trust does not contain an express choice-of-law
provision, the Court will deem controlling the law that will
sustain the validity of the trust.

Choices-of-law for testamentary trusts:


a)

rules governing the intrinsic and extrinsic validity


of wills

b)

lex rei sitae with respect to the property

XVI. Choice of Law in Torts and Crimes


Tayag vs. Benguet Consolidated Inc.
(1968)
FACTS: BCI stocks owned by the decedent Idonah Slade
Perkins were in the possession of the domiciliary
administrator County Trust Company Of New York. Later,
the CFI Of Manila named Renato Tayag as the ancillary
administrator. When Tayag obtained a court order for the
County Trust Company to deposit the stocks to him, BCI
appealed.

1)

for the benefit of the other.

Tort: derived from the French word torquere or to twist. It


is an act or omission producing an injury to another without
any previous existing lawful relation of which the act or
omission may be said to be a natural outgrowth or incident.
A.

Policies behind Conflicts Tort Law

2 Important Policies underlying substantive tort law:


1)

to deter socially undesirable or wrongful conduct

2)

to rectify the consequences of the tortuous act by


distributing the losses that result from accident and
products liability

In view of these, the policy behind tort law will most likely
be a strongly held policy of the state and as result, that state
will not easily displace its own law with the law of another
state.

43

Policies:
1) deter undesirable or wrongful conduct
2) rectify consequences by distributing the losses
similarity between family conflicts cases and torts
conflicts cases: strongly held policies of the state
3 concerns in torts:
1) achieving just and reasonable results (consider the
interest of both parties
2) societal interest
3) shielding defendant from unnecessary surprise
Distinguish: upholding the legitimate expectations of
parties vs. shielding defendant from unnecessary surprise
the first is used in contracts cases, the second is used in
torts cases.
Why is the place of the tort (locus delicti) difficult to
determine? Different concepts of locus delicti:
1) civil law: place of tortious conduct
2) common law: place of injury/vested rights theory
to determine lex loci delicti: determine whether
you are dealing with a civil law or common law
country
________________
B.

Lex loci delicti commissi

Lex loci delicti commissi: the law of the place where the
alleged tort was committed. It determines the tort liability in
matters affecting conduct and safety.

Difficulty has been encountered in determining the locus


delicti where the liability producing conduct happens in one
state but the injuries are sustained in another.

C.

Modern Theories on Foreign Tort Liability

False conflict: only one state has an interest in having its law
1.

Common law concept of place of wrong: place where the last


event necessary to make an actor liable for an alleged tort
occurs. It adheres to the vested rights theory, so that if harm
does not take place then the tort is not completed.
Negligence or omission is not in itself actionable unless it
results in injury to another.
Civil law concept of place of wrong: place where the tortious
conduct was committed. This is premised on the principle
that the legality or illegality of a persons act should be
determined by the law of the state where he is at the time he
does such act.
The traditional view (whether the situs of the tort is the place
of conduct or injury) is that an actor liable by the lex loci
delicti is liable everywhere. Damages arising from torts
committed in one state are actionable in another state.

Alabama Railroad vs. Carrol: the negligent infliction of an


injury in one state creates a right of action there, which may
be enforced in any other state or country the comity of
which admits of it.
Loucks vs. Standard Oil Co.
(1913)
FACTS: Loucks, a NY resident, was run down and killed by
Standard Oil employees in an accident while engaged in its
business. Under Massachusetts law, the corporation is liable
for the death of a person where the death was caused by the
negligence of the corporations employees while engaged in
its business. However, under NY law, the corporation is
liable for such death where the death occurred in NY. The
action to recover damages was filed in NY.
HELD: Massachusetts law may be applied. A tort
committed in one state creates a right of action that may be
sued upon in another unless public policy forbids. A foreign
statute is not law in the state, but it gives rise to an obligation,
which, if transitory, follows the person and may be enforced
wherever the person may be found.

The Most Significant Relationship

applied, and failure to apply the other states law would not
impair the policy reflected in that law.

This theory considers the states contacts with the


occurrence and the parties.

Apparent conflict: more than one state has an apparent

Two-fold purpose:
1) identify the interested state
2) evaluate the relevance of these contacts to the
issue in question

Prof. Currie: if only one state has a real interest in the case
and the other states interest is insubstantial then there is a
false conflict. However, if both states have a real interest in
applying their law then the apparent conflict becomes a true
conflict.

The significant-relationship approach does not call for a


mechanical counting of factual contacts where strength is
drawn in numbers; instead the court localizes the state of the
most significant relation and assesses the event or transaction
in the light of the relevant policy considerations of the
interested states and these underlying policies.
Saudi Arabian Airlines vs. CA
(1998)
FACTS: Morada was a flight stewardess of Saudi Airlines.
She was involved in an attempted rape case, which led to her
conviction of violation of Islamic laws in Saudi. The Prince
of Makkah ruled that she was wrongfully convicted.
However, she was terminated from her employment by
Saudia.
HELD: The RTC of Manila has JD to try the case, applying
the state of most significant relationship rule. The
following contacts should be considered in using this rule:
place where the injury occurred, place where the conduct
causing injury occurred, domicile/residence/nationality/place
of business of the corporation, and place where the
relationship between the parties is centered.
In CAB, the Philippines had the most significant contacts.
The overall injury occurred in the Philippines, Morada is a
resident and a Filipina national, Saudia is a foreign
corporation engaged in business here, and the relationship
of the parties is centered here.

2.

Interest Analysis

This approach considers the relevant concerns the state may


have in the case and its interest in having its law applied on
that issue.
The court should first determine whether there is a true or
false conflict.

44

interest in applying its law to the case.

Problem with Interest Analysis approach: are the policies of


the law always discernible? Sometimes we merely guess the
policies of the state (because unarticulated in the law).
________________

3.

Cavers Principle of Preference

This principle deals with rules that sanction some kinds of


conduct engaged in by a defendant in one state and extends
the benefit of this higher standard of conduct and financial
protection to the plaintiff even if the state of injury does not
create analogous liabilities.
Pangalangan: Since both states consider that a tort has been
committed, the law of the state which places a higher
standard of conduct should apply. This is true even if this is
the place of tortious conduct and not the place of injury.
Schmidt vs. Driscoll Hotel
(1957)
FACTS: Schmidt sued Driscoll Hotel for illegally selling
liquor to Sorensen, who was the driver of a vehicle which
turned over in Wisconsin. Schmidt was a passenger of that
vehicle and sustained injuries as a result of the accident. The
suit was filed in Minnesota, where the illegal sale was
conducted.
HELD: Minnesota court has jurisdiction, even if the injury
which followed the illegal sale occurred outside Minnesota.
The Restatement should not be applied where the plaintiff
would have no remedy against the offending liquor dealer.
Under the principles of equity and justice, the Minnesota law
granting him a remedy should be applied, considering that
all the parties are residents of Minnesota, Driscoll Hotel was

licensed under Minnesota law, the violation of Minnesota


law occurred there, and the wrongful conduct was completed
by Sorensen in Minnesota.

Schmidt illustrates the imposition of liability under a


substantive rule of tort law that has a strong underlying
admonitory policy.

American Contributions to Conflicts Tort Law

The defendant in a transnational tort is often sued in a


foreign court against his will; his consent to be sued is not
necessary for the acquisition of jurisdiction by the court.
Hence, questions as to the legitimacy of the JD and validity
of the decision may arise.

ii. Products liability


manufacturer

of

the

Conflicts torts cases arise due to significant differences in the


laws of states on the basis and extent of liability for
defectively manufactured products.

Law of the tort: deemed as the proper law in questions

Asahi Metal Industry vs. Superior Court of California


(1987)
FACTS: Asahi Metal manufactures tire valve assemblies in
Japan and exports them, including to a Taiwanese company
which, in turn, incorporates them into finished tires sold in
the US. The driver of a motorcycle, who had an accident
resulting in injuries to him and death to his passenger, sued
the Taiwanese company. The Taiwanese company filed a
cross-complaint against Asahi.

Law of the domicile of the parties: governs in matters that


relate to loss-distribution or financial protection.

In modern approaches, there is a distinction between true or


false conflict.

True conflict: both states have an interest in having


their law applied
maybe true conflict
false conflict: no choice necessary the court
should apply the law of the only interested state
_______________
D. Foreign Tort Claims

HELD: The California court has no JD over Asahi Metal.


The constitutional touchstone/test of due process is whether
the defendant purposefully established minimum contacts
in the forum state. And minimum contacts must have a
basis in some act by which the defendant purposefully avails
itself of the privilege of conducting activities within the forum
state, thus invoking the benefits and protections of its laws.

Tortious liability is transitory the liability resulting from the


tort is deemed personal to the perpetrator of the wrong,
which follows him wherever he goes. Compensations may be
exacted from him in any proper tribunal; the right to sue is
not confined to the place where the cause of action arises.

In the CAB, no purposeful availment of the California


market on the part of Asahi. It does not do business in
California; has no office, agents, employees, or property in
Cal.; does not advertise or otherwise solicit business there;
and did not create, control, or employ the distribution
system that brought its valves to California.

i. Conditions for the enforcement of tort


claims

Societe Nationale Industrille Aerospatiale vs. Lee Kui Jak:

a)

the foreign tort is based on a civil action and not


on a crime

b)

the foreign tort is not contrary to the public policy


of the forum

c)

the judicial machinery of the forum is adequate to


satisfy the claim

An Aerospatiale helicopter crashed in Brunei, killing a


passenger who was a Brunei resident. The administrator of
the estate brought the action in Texas, where Aerospatiale
does business. Held: Brunei (where the deceased lived and
the helicopter crashed) was the natural forum for the trial for
an action for damages against the manufacturer of the
helicopter, and it would be oppressive for the plaintiffs to
continue with the Texas proceedings as Aerospatiale would

45

Bier vs. Mines de Potasse: A Dutch market gardener filed an


action for damages in a Dutch court against a French mining
company. The Dutch court held that it had no JD, but the
French court held that the plaintiff could elect where to sue
(place of damage or place of injurious conduct).

foreign

The determination of whether the law where the tort was


committed or the law of the domicile of the parties is the
controlling law is considered one of the major contributions
of American jurisprudence to international conflicts thought.
involving regulation of conduct.

not be able to pursue legal proceedings against the Malaysian


company which operates and services the helicopter.

Sovereignty as Basis of Jurisdiction


The sovereignty model has been accepted both to:
a) justify any exercise of jurisdiction over a defendant
present within the territory, however short (tag
jurisdiction)
b)

deny enforcement of a foreign court judgment


over a defendant who was not present within that
courts jurisdiction

Worldwide Volkswagen Corp. vs. Woodson


(1980)
FACTS: The spouses Robinson purchased a car from
Seaway Volkswagen in New York. They met an accident in
Oklahoma and pinned the blame on the defective design of
the car. They brought a suit against the retailer and
distributor in Oklahoma.
HELD: Oklahoma court has no JD. A state court may
exercise personal JD over a nonresident defendant only so
long as there exist minimum contacts between the
defendant and the forum state. The 2 functions of the
concept of minimum contacts is to protect the defendant
against the burdens of litigating in a distant or inconvenient
forum, and to ensure that the states, through their courts, do
not reach out beyond the limits imposed on them by their
status as coequal sovereigns in a federal system.
In CAB, there us a total absence of those affiliating
circumstances that are a necessary predicate to any exercise
of state-court JD (no activity whatsoever on Oklahoma; no
sales closed nor services performed there; no availment of
the privileges and benefits of Oklahoma law; no solicitation
of business there).

In Asahi, even if there were minimum contacts, it failed the


reasonableness test.

Criticism of Asahi: additional acts requirement is a


reinvention of the stream of commerce law. The fear is that
the court might go back to pre-International Shoe standards
n JD (requirement of actual presence).
In Worldwide Volkswagen, the only requirements for the
exercise of JD were minimum contacts and the
reasonableness test; Asahi did not follow this, and include an
additional requirement (purposeful availment).
________________

iii. The Alien Tort Act


The Alien Tort Statute granted US district courts original JD
over any civil action by an alien for a tort committed in
violation of the law of nations or a treaty of the US.
Hilao vs. Estate of Ferdinand Marcos
(1996)
FACTS: A class suit was brought against Marcos by parties
seeking damages for human-rights abuses committed against
them or their decedents. The Hawaii district court found for
Hilao and ordered a verdict of almost $2 billion in damages.
The Estate in its appeal, argues that the Alien Tort Claims
Act does not apply to conduct that occurs abroad, and since
the acts complained of all occurred in the Phils., the court
has no JD
HELD: The court has JD. In a prior appeal it has been held
that subject-matter JD was not inappropriately exercised
even though the actions xxx occurred outside the US.

in Trajano vs Marcos), would be a significant setback to the


advancement of international law.
Guinto vs. Marcos
(1986)
FACTS: Guinto and Suarez filed an action for damages
against Marcos in California under the Alien Tort Claims
Act. According to Guinto, Marcos act of seizing their film
100 Days in September violated their freedom of speech.
HELD: Test to determine when a violation of the law of
nations has occurred there has been a violation by one or
more individuals of those standards, rules or customs a)
affecting the relationship between states or between an
individual and a foreign state, and b) used by those states for
their common good and/or dealings inter se. A violation of
the First Amendment right of free speech does not rise to
the level of such universally recognized rights as to constitute
a violation of the law of nations.
The Alien Tort Statute justifies exercise of court JD over
completely foreign tort cases because of the universal evil
exemplified by human rights violations. This is so even
though there are no significant contacts between the courts
and the parties and events nor substantial state interest in the
case other than a general desire for compliance with
customary international law. That is why in order for the
Alien Tort Act to apply, there is a need to establish that the
tortious conduct violated an internationally protected human
right.

iv. Philippine Rule on Foreign Torts


Filartiga vs. Pena-Irala
(1980)
FACTS: Plaintiffs brought an action in the US against PenaIrala for wrongfully causing the death of Dr. Filartigas son in
Paraguay.
HELD: The US federal court has JD, on the basis of the
Alien Tort Statute. This action is undeniably an action by an
alien, for a tort only, committed in violation of the law of
nations. A wrong is recognized as a violation of the law of
nations where the nations of the world have demonstrated
that the wrong is of mutual, and not merely several, concern.
*The concept of accountability, if considered the core of the
Alien Torts Act (as espoused by the US Justice Department

There is no specific statutory law governing the enforcement


of claims for damages arising form foreign torts. But on the
theory of vested rights the victim of a foreign tort may decide
to file the case in the Philippines.
It has been suggested that the English Rule may be followed,
such that the tort committed abroad is actionable in the
country where it was committed and also under Philippine
law.
Two conditions for a case based on a foreign tort to be filed
in the Philippines (English Rule):
1)

the wrong must be of such a character that it


would have been actionable if committed in the
Philippines

46

2)

the act must not have been justifiable by the law of


the place where it was done

Time, Inc. vs. Reyes


(1971)
FACTS: Villegas and Enrile filed a complaint for damages
against Time, Inc. upon an alleged libel arising from a
publication of Time Magazine. Plaintiffs filed their action in
CFI Rizal. But according to the applicable law, they may file
the action only in the place of first publication or in the City
of Manila (since they are public officers).
HELD: The case should be dismissed for improper venue.
The only alternative allowed to the public official is to
prosecute in the place where the offending article was
printed and first published; but in the CAB the alternative
was not open to plaintiffs since the offending publication was
not printed in the Philippines.
In Time, Inc., if the court had not characterized the issue as
jurisdictional, and decided the case from a conflicts tort
perspective, it could have taken cognizance of the case
following the most significant relations approach because of
the significant links between the forum and the parties.

In ordinary foreign tort, the court acquiring JD must be


either the place of tortious conduct or place of injury. In
Alien tort Statute, US courts may acquire JD even if it is
neither the place of tortious conduct nor place of injury.
law of nations (Filartiga): mutual concern nations
consider the act to be detrimental to all nations; it is a
violation of a law of all countries.

Guinto: violation of law of nations test


1)

the violation affects relationship between states, or


an individual and a foreign state
2) used by the states for their common good and/or
dealings inter se
_______________

E.

Distinguishing between Torts and Crimes

Tort

Crime

Transitory in character;
hence liability is deemed
personal to the tortfeasor
and make him amenable
to suit in whatever JD he
is found

Local in character; the


perpetrator of the wrong
can be sued only in the
state wherein he commits
the crime

An injury to an individual
who may be situated in
any place

An injury to the state


where it is committed

Liability is attached to the


perpetrator to indemnify
the victim for injuries he
sustained

Promulgated to punish
and
reform
the
perpetrators and deter
them and others from
violating the law

F.

This immunity for sovereign acts is impliedly waived when


the foreign state and its officials perform private, commercial
or proprietary acts.

In Rarang, although the publication was part of the duty of


Wylie and Williams, the goal of the publication of the
complaint would have been achieved without identifying
Rarang by name.

Lex loci delicti

Under the territorial principle, crimes committed within the


Philippines by all persons, whether Filipino citizens or
aliens, are prosecuted and penalized under Philippine law.
As a rule, criminal laws of a state are effective only upon
persons who actually commit the crime within the states
territory.
The lex loci delicti or the law of the place where the crime
was committed is the controlling law since it determines the
specific law by which the criminal is to be penalized, and
designates the state that has the JD to punish him.
3 Exceptions to the Territorial rule:
1)

HELD: Wylie and Williams are not immune from the suit.
They are sought to be held answerable for personal torts in
which the US is not involved; if found liable, they alone must
satisfy the judgment. The Bases Treaty provision on
immunity could not possibly apply in this case, as it is
presumed that the laws of the US do not allow the
commission of crimes in the name of official duty. The
general rule is that public officials can be held personally
accountable for acts claimed to have been performed in
connection with official duties where they have acted ultra
vires or where there is showing of bad faith.

Liang (Huefeng) vs. People


(2000)
FACTS: Liang, a Chinese working at the ADB, was charged
by a fellow worker with grave oral defamation. The lower
court dismissed the complaint on the ground that Liang is
covered by the immunity provision under the Agreement
between ADB and the Phil. Government.
HELD: Liang is not immune from suit. The immunity
under the Agreement is not absolute, and it only extends to
acts done in official capacity. Slandering a person could not
possibly be covered by the immunity agreement because our
laws do not allow the commission of a crime, such as
defamation, in the name of official duty.

First Exception: crimes committed by state


officials, diplomatic representatives and officials of
recognized international organizations (based on
doctrine of state immunity)

Wylie vs. Rarang


(1992)
FACTS: Wylie and Williams are officers of the US Navy
stationed in the Subic Naval base, and are in charge of the
publication Plan of the Day. Rarang filed an action for
damages against them for libelous statements published in
the POD.

2)

Second Exception: crimes committed on board a


foreign vessel even if it is within the territorial
waters of the coastal state

In the Philippines, our courts will not acquire JD over


offenders nor can Phil. laws apply as long as the effect of
such crime does not disturb our peace and order.
US vs. Fowler
FACTS: Fowler et al were accused of theft on board the US
vessel Lawton while it was traveling on the high seas.

47

HELD: Philippine courts have no jurisdiction over Fowler.


Act 400 granting JD to RP courts for crimes and offenses
committed on the high seas, apply to ship or water craft
registered or licensed in the Philippines only. In the CAB,
the Lawton was not registered in the Philippines; it was a US
vessel.
People vs. Wong Cheng
(1922)
FACTS: Wong was charged for having illegally smoked
opium on board an English vessel Changsa while anchored
in Manila Bay.
HELD: Under the English rule which is applicable here (it is
the prevailing theory in the US), to smoke opium within our
territorial limits, even though aboard a foreign merchant
ship, is certainly a breach of the public order here
established. It causes such drug to produce its pernicious
effects within our territory. It seriously contravenes the
purpose that our Legislature had in mind in enacting the
repressive statute, and is therefore triable in our courts.
US vs. Look Chaw
(1910)
FACTS: Two sacks of opium were found to be in the
control of Look Chaw aboard the Erroll, an English
steamship. A complaint for possession and sale of opium
was filed against him.
HELD: Philippine courts have jurisdiction. Although the
mere possession of an article of prohibited use in the
Philippines, aboard a foreign vessel in transit, in any local
port, does not as a general rule constitute a crime triable by
the courts of the Islands, such vessel being considered as an
extension of its own nationality, the same rule does not apply
when the article, the use of which is prohibited in the
Islands, is landed from the vessel upon Philippine soil.
3)

Third

Exception: crimes which, although


committed by Philippine nationals abroad, are
punishable under Philippine law (ex. Art. 2 RPC)

the right to stockholders owning 3% of the capital stock of


the company. Gray does not own the required shares.

FLAG
LOCATION

CRIME

RESULT

Fowler

Cheng

Look Chaw

US

English

English

High seas

Within RP
territorial
waters

Within RP
territorial
waters

theft

Smoking
opium

Possession
and selling
of opium

No JD

Acquired
JD

Acquired
JD

In RP, we follow the French Rule.


XVII. Choice of Law Affecting Corporations and Other
Juridical Entities
A.

Corporations

A corporation is an artificial being created by operation of


law, having the right of succession and the powers, attributes
and properties expressly authorized by law or incident to its
existence.
Foreign corporation formed under the laws of a state other
than the Phils; such laws allowing Filipino citizens and
corporations to do business there. It shall have a right to do
business here only after obtaining a license and a certificate
of authority from the appropriate government agency.

1.

Personal Law of a Corporation

The personal law of the corporation is the law of the state


where it is incorporated. If the law creating it does not
authorize it to enter into certain contracts, such contracts
which can be made in other states shall be void despite the
express permission given by the other state.
ME Gray vs. Insular Lumber Co.
(1939)
FACTS: Gray, a stockholder of Insular (incorporated in
NY) filed an action in CFI to compel Insular to allow him to
examine its books. Sec. 77 of NY Stock Corp Law only gives

HELD: Gray is not entitled to the right to examine the


books of Insular. Gray is bound by the NY law which only
gives him the right to receive from the treasurer of the
corporation a statement of affairs covering a particular
account of all its assets and liabilities. Neither can his rights
be granted under common law absent a showing that:
a. he seeks information for an honest purpose or to
protect his interest as stockholder
b. he exercises right in good faith and for a specific and
honest purpose not merely to satisfy curiosity or for
speculative or vexatious purposes.

Anglo American Theory on Corporations


Bank of Augusta vs. Earle
(1839)
FACTS: Bank of A (incorporated in Georgia), thru MGran
bought bills from Earle in Alabama. Bills were unpaid so
Bank sued Earle. TC ruled that the Georgian Bank could
not exercise power in Alabama thereby making the contracts
void.
HELD: Bank can exercise its powers in Alabama and the
contracts are therefore valid. It is well-settled that by the law
of the comity of nations, a corp. created by 1 sovereignty is
permitted to make contracts in another and sue in its courts
and that the same law of comity prevails in several States of
US including Alabama. Alabama courts have held that a
foreign corp may sue in its courts based on the comity of
nations.

The power of a foreign corporation depends upon the laws


of the state recognizing it. It may impose conditions or
limitations subject to a few exceptions as decided by US
courts, to wit:
a)

commerce clause prohibits a state from


imposing conditions on corporations engaged in
interstate commercial activities and provides the
basis of federal power to regulate interstate
commerce.

b)

Since it is considered a person, once allowed to


enter a state and acquire property, it cannot be
discriminated against by domestic corps

c)

Unconstitutional conditions forbids a state from


requiring the foreign corporation to give up its
constitutional rights either as a prerequisite to
allowing it to do business or to avoid being
removed from that state

A foreign corporation, although a person, is not a citizen


entitled to the privileges given by the state to its individual
citizens.

If according to the personal laws of the corporation,


stockholders are given certain rights, such rights cannot be
diminished nor added upon by the law of the place where
the corporation does business. This is because such rights
are already fixed by the corporation.
________________

2.

Four Basic (Important) Theories from the case:


1)

a corporation, being a creature of law, has no legal


status beyond the bounds of the sovereignty within
which it was created

2)

a corporation cannot exercise powers not granted


by its corporate charter or by the laws of the state
of incorporation

3)

no state is under any obligation to adhere to the


doctrine of comity (every state has the power to
refuse recognition)

4)

a state is not obliged to grant to a foreign


corporation the privileges and immunities
common to its citizens

48

Exceptions to the Rule of Incorporation


Test
a.
Constitutional
Restrictions

and

Statutory

A state may, by legislation, exclude a foreign corp altogether,


subject to the constitutional limitations, or prescribe any
conditions it may see fit as a prerequisite to the corporations
right to do business within its territory.
1987 Phil Constitution:
a.

regulates exploration, development and utilization


of natural resources such that only 60% Filipinoowned corps may be allowed to engage in these
activities

b.

the nations marine wealth and the exclusive


economic zone is reserved exclusively to Filipinos
Congress is empowered to reserve certain areas of
investments to 60 % Filipino owned corps or
provide for a higher percentage (e.g. mass media
100%)

time the insurable risk occurred. But C is entitled to a return


of the premiums paid.

Pedro Palting vs. San Jose Petroleum


(1966)
FACTS: Palting opposes the tie-up between San Jose
Petroleum (a Panamanian corp.) and San Jose Oil (domestic
corp.) as being violative of the Constitution and the
Petroleum Act. SJP claimed that it is entitled to the Parity
Amendment which grants to US citizens the right to use &
exploit natural resources in the Phils because its
stockholders are US citizens.

Daimler Co. Continental Tire and Rubber Co.: HELD: An

c.

HELD: SJP is not covered by the Parity Agreement. It is not


owned or controlled directly by US citizens. It is owned by
another Panamanian corp., Oil Investments. Oil
Investments on the other hand is owned by 2 Venezuelan
corps. Even assuming that the stocks of the 2 Venezuelan
corps are owned by US citizens, to hold that the set-up in
CAB falls within the Parity Amendment is to unduly stretch
and strain the language and intent of the law. There would
be practical impossibility to determine at any given time the
citizenship of the controlling stock.

b.

Control Test During the War

During wars, courts may pierce the corporate identity and


look into the nationality of stockholders to determine the
citizenship of the corp.
Filipinas Compania de Seguros vs. Christern, Huenfeld, Co.,
Inc.
(1951)
FACTS: Christern (German Co.) filed a claim against
Filipinas (US Co.) for recovery on fire insurance policies
issued by the latter. F refused to pay claiming that the
policies ceased to be in effect on the date the US declared
was against Germany. Dir. Of Bureau of Financing directed
F to pay C.
HELD: The policy ceased to be valid and binding because
of the fact that majority of the stockholders of C are
Germans and it became an enemy corporation when war
was declared. Under Phil Insurance Code, anyone except a
public enemy may be insured. C is a public enemy at the

Filipinas Compania case was decided that way because of the


government interest involved.
_______________
English corporation with an English secretary but whose
shares of stock are controlled by German nationals was
considered an enemy corporation and prohibited from
trading in England. It ruled that the company itself was
incapable of loyalty or enmity. These qualities are
attributable only to human beings. The company therefore
had the predominant character of its shareholders being
Germans.
3.

Domicile or Residence of Foreign


Corporations

Art. 51, CC
When the law creating or recognizing them, or any other
provision, does not fix the domicile of juridical persons, it is
understood to be
a. the place where legal representation is established
b. where they exercise their principal functions
A foreign corp. granted license to do business here acquires
a domicile in the Phils.
State Investment House vs. Citibank
(1991)
FACTS: CMI obtained loans from Citibank. CMI defaulted.
Citibank filed petition for involuntary insolvency against
CMI with CFI, Rizal. State Investment, a creditor of CMI,
opposed claiming that Citibank had no jurisdiction because
the banks are not resident creditors of CMI.
HELD: The Phil branches of the bank are residents of the
Phils being resident foreign corporations as defined in the
Tax Code and other Banking Laws. What effectively makes
a foreign corp a resident corp in the Phils is its actually being
in the Phils and licitly doing business here (locality of
existence) The grant of license merely gives legitimacy to its
doing business here but it does not make the corp a resident.
Also, the failure of the bank to aver categorically that they
are residents are not fatal to the cause of action where it
alleged that it is a foreign bank licensed to do business here.

49

4.

Jurisdiction Over Foreign Corporations

The dictum that a corporation has force only in the


incorporating state and no existence outside that state has
been abandoned. The prevailing rule is, with the consent of
a state, a foreign corp. shall be recognized and will be
allowed to transact business in any state, which gives its
consent.
Requirements for License: Secs. 125-128, Corpo Code)
a. sworn application
b. copy of articles of incorporation
c. designation of an agent
d. sworn certification of an official of the incorporating
state that a similar right is given to Filipinos in that state
and that the foreign corp. is in good standing
e. statement under oath by the official of the corp.
attesting that the corp is solvent and in sound financial
condition

Foreign Corporations doing Business are Bound by


Philippine Law
Art. 129, Corp Code
All foreign corporations lawfully doing business in the
Philippines shall be bound by all laws, rules and regulations
applicable to domestic corporations.
Exceptions:
1. laws on creation, formation, organization or dissolution
of corporations
2. laws which fix the relations, liabilities, responsibilities or
duties of stockholders, members or officers of the corp
to each other

Rule 14, Sec. 14 ROC


Service upon foreign corporations doing business in the
Phils. may be made on the:
1.
2.
3.

resident agent
in the absence thereof, to the government official
designated by law or any of its officers or agents within
the Phils
on any officer or agent of the corp in the Phils

*a fourth method is established by case law: service thru


diplomatic channels

5.

Right of Foreign Corporation to bring


Suit

Acquisition of a license by a foreign corporation is an


essential prerequisite for filing of suit before our courts.

Art. 133, Corp Code states that these corporations may be


sued or proceeded against before Phil courts or
administrative tribunals on any valid cause of action
recognized under Phil law.
Home Insurance Co. vs. Eastern Shipping Lines
(1983)
FACTS: Home Insurance was subrogated to the rights of
shippers against eastern Shipping for damages on cargo.
Eastern refused to pay. HI filed action to recover sum of
money. TC dismissed because HI failed to prove capacity to
sue.
HELD: HI has capacity to sue because at the time the
complaints were filed, it already had a license to conduct
insurance business in the Phils. Insurance contracts are not
null and void for lack of license at the time it was entered
into. The Corp. Code is silent on the status of the said
contracts. Also, the object of the law in requiring registration
is to subject the foreign corp. to the JD of our courts.
Atlantic Mutual Insurance vs. Cebu Stevedoring
(1966)
FACTS: Cebu Stevedoring carried copra for Procter &
Gamble. Copra were insured with AMI. Bec. of damages,
AMI sued Cebu Stevedoring. CS filed a MTD bec. AMI
had no capacity to sue. TC ruled that it must allege that it
has a license to be able to sue.
HELD: Such allegation is unnecessary. However, AMIs
mere allegation that it is a foreign corp is not sufficient. It
must state WON it is doing business in the Phils bec
different rules attach to the same. If it is engaged in business,
it must be licensed to be able to sue. If not so engaged, the
license is not required and it may sue esp. if it is a
single/isolated transaction.

6.

Exceptions to License Requirement


a.

in business. It does not constitute doing business under


the law.

1.
a.

Eastboard Navigation vs. Ysmael & Co.


(1957)
FACTS: Eastboard was able to secure a favorable decision
from NY arbiters against J.Y. & Co. It brought an action for
enforcement of a money claim against JY & Co. in the Phils.
JY opposed alleging that E had no capacity to sue.
HELD: E has capacity to sue. The license is not necessary
because it is not engaged in business in the Phils. The 2
isolated transactions do not constitute engaging in business
within the purview of the Corpo Law.

b.

Action to Protect Trademark,


Trade Name, Goodwill, Patent or
for Unfair Competition

Even without a license, a foreign corporation may file


complaint for unfair competition since it is a suit enjoining
the unfair trader from pursuing the unlawful competition &
for the aggrieved party to recover damages. This is based on
equity considerations.
Converse Rubber vs. Jacinto Rubber:
FACTS: Converse owns the trademark of Converse Chuck
Taylor All Star. Jacinto manufactures shoes of identical
appearance. Hence, this suit.
HELD: Sec 69 of the Corp Law does not disqualify
Converse from filing the suit although it is unlicensed to do
business and is not doing business in the Phils. This is in
compliance with the Convention of Paris for the Protection
of Industrial Property from which the Phils adheres to and
which US is a signatory.

Leviton Industries vs. Salvador


(1982)
FACTS: Leviton Manufacturing (US) sued Leviton
Industries (Phil) for unfair competition bec. the latter uses
the trademark Leviton. Defendant filed MTD for failure to
allege capacity to sue.

Isolated Transactions
HELD: Plaintiff failed to allege capacity to sue.

This has been defined as one which is occasional, incidental


and casual, not of a character to indicate a purpose to engage

50

b.
2.

All that Leviton Manufacturing alleged is that it is a


foreign corporation. It should have, in addition, alleged
the ff pursuant to Sec. 21-a:
it registered its trademark with the Phil. Patent Office
or that it is an assignee of the trademark, and
that the country of which it is a citizen or domiciliary
grants to Filipino corps the same reciprocal treatment,
either in a treaty, convention or law.
It also violates Sec. 4, Rule 8 of the Rules of Court,
which states that:
Facts showing the capacity of a party to sue or be sued
or the authority of a party to sue or be sued in a
representative capacity or the legal existence of an
organized association of persons that is made a party,
must be averred.

c.

Agreements Fully Transacted


Outside the Philippines

A foreign corporation is allowed to maintain an action on a


transaction wholly celebrated and consummated abroad so
as not to impair the policy of stabilizing commercial
transactions.
Universal Shipping Lines vs IAC
HELD: The private respondent may sue in the Phils upon
the marine insurance policies to cover international-bound
cargoes shipped by the carrier. It is not the lack of the
license but doing business without such license which bars a
foreign corporation from access to our courts.
Hang Lung Bank vs. Saulog
(1991)
FACTS: Hang Lung Bank, not doing business in the Phils,
entered into continuing guarantee agreements with Cordova
Chin San in HongKong for the debts of Wolder Enterprises.
Wolder defaulted so Hang Lung sued Wolder and Chin
San. No payment was made so it sued Chin San in RTC,
Makati for enforcement of its money claim. Chin San
moved to dismiss for incapacity to sue.
HELD: A foreign bank not doing business in the Phils, such
as Hang Lung, may sue a resident for contracts entered and
consummated outside the Phils.
Reasons for rule: if not adopted,
a. it will hamper the growth of business between
Filipinos and foreigners
b. it will be used as protection by unscrupulous
Filipinos who have businesses abroad

d.

Petition Filed is Merely a Corollary


Defense in a Suit against it

Time Inc. vs. Reyes


HELD: The court allowed a foreign corp is not maintaining
a suit in our courts but is merely defending itself when it files
a complaint for the sole purpose of preventing the lower
court from exercising jurisdiction over the case. As such, it is
not required to allege its capacity to sue.
Phil. Columbia Enterprises vs. Lantin
(1971)
FACTS: Katoh & Co. filed a complaint against Phil
Columbian. Phil Columbian challenged its capacity to sue.
TC deferred the determination of this issue until trial on the
merits. PC opposed claiming that if it files a counterclaim, it
will be waiving its right to assail the capacity to sue of Katoh.
HELD: A counterclaim is a complaint against the plaintiff. It
would not be the foreign corp who will be maintaining a suit.
Therefore, Sec. 69 of the Corp Law will not apply.

7.

Definition
and
Scope
Transacting Business

of

A foreign corporation may do business, state consent being


presumed, except:
1. where it is prohibited by express statutory authority or
constitutional enactment
2. where it is seeking to perform acts which are contrary to
public policy
3. where it is seeking to exercise extraordinary and special
franchises
4. where it is seeking to perform acts which are not
authorized by the law of the state of its incorporation

Doing Business (Foreign Investments Act)


-

soliciting orders,
service contracts,
opening offices whether called liaison offices,
appointing representatives if the latter stays for at least
180 days,
participating in the management, supervision or control
of any domestic business
and any other act that imply a continuity of commercial
dealings
and contemplate in the performance of acts or works

the progressive prosecution of commercial gain or of


the purpose/object of the business organization

or casual but is of such nature as to indicate a purpose to do


other business in the State.

What is not doing business:


1.
2.
3.
4.

mere investment as a shareholder


exercising of rights as investor
having a nominee director or officer to represent
interests
appointing a representative or distributor in the Phils
which transacts business in its own name and for its
own accounts

Doing business serves as the basis for jurisdiction over corps


on the theory that they are present in the state or have
consented to suit by making that state a major place of
business.
Avon Insurance vs. CA
(1997)
HELD: A reinsurance company is not doing business in a
certain state merely because the property or lives which are
insured by the original insurer company are located in that
state since the reinsurance contract is usually a separate and
distinct arrangement from the original contract of insurance,
whose contracted risk is insured in the reinsurance
agreement.
The term doing business in the Phils implies a continuity
of commercial dealings and arrangements and contemplates,
to that extent, the performance of acts or works or the
exercise of functions normally incident to and in the
progressive prosecution of the purpose and object of its
organization.
Wang Laboratories vs. Mendoza
(1987)
FACTS: Wang Lab (US corp) sells its products in the Phils
thru its exclusive distributor, Exxbite. ACCRS sued WL for
breach of contract for failure to develop the software
program contracted. WL filed MTD on the basis of lack of
jurisdiction over its person bec. the service was invalid it
being a foreign corp not engaged in business in the Phils.
HELD: WL is doing business in the Phils. It has installed
26 products in the Phils and has registered its tradename
with PPO. It allowed E to use such trademark and to
advertise the same.
Thus, it cannot be said that the case involved an isolated or
single transaction. The transaction is not merely incidental

51

CIR vs. JAL


(1991)
FACTS: JAL was assessed deficiency income tax by CIR for
the sales of its ticketing agent (PAL) in the Phils. JAL
opposed and claimed that as a non-resident foreign corp. it
can only be taxed on income from Phil sources.
HELD: JAL is a resident foreign corporation under the Tax
Code. For a foreign corporation to be regarded as doing
business, there must be a continuity of conduct and
intention to establish a continuous business (i.e.
appointment of a local agent) and not a temporary one. JAL
constituted PAL as a local agent to sell tickets which is the
lifeblood of airline tickets, the generation of sales being its
paramount objective.
Merrill Lynch Futures vs CA
(1992)
FACTS: Lara spouses entered into a Futures Customer
Agreement with Merrill Lynch Futures Inc. They become
indebted to it after a loss in the business. Laras refused to
pay and claimed that the transactions were void because
MLFI had no license to operate as a commodity or financial
futures broker.
HELD: MLFI had the capacity to sue and Laras are
estopped from denying the same after having done business
with it over many years. The purpose of applying the
doctrine of estoppel is to prevent persons from taking undue
advantage of a corps non-compliance with the statutes where
such person received benefits under their contract.
Granger vs. Microwave Systems
(1990)
FACTS: Granger (US) sued MSI (Phil) for recovery of a
sum of money. MSI did not pay and claimed that G had no
capacity to sue bec. it was unlicensed.
HELD: G had no capacity to sue because of its being an
unlicensed foreign corp doing business in the Phils. Neither
does it fall under the established exceptions. Granger had
the burden of showing that the finding fell under an
exception. The purpose of requiring license is to enable Phil
courts to exercise jurisdiction over them. If the foreign corp
operates here without submitting to our laws by securing a

license, they may not be allowed to invoke our laws for their
protection.

2.

whether the activities of the subsidiary in a state will give


that state jurisdiction over he parent corporation

Restatement 2 :
Jurisdiction over the parent will exist if the parent controls
and dominates the subsidiary. In determining whether the
separate corporate existence of the subsidiary has been
adequately preserved, the courts will consider whether the
subsidiary has its own records, assets, advertising, employees,
payroll and accounting and whether its directors and
headquarters are different form those of the parent.

Domestic Corp.:
a) Can sue
b) Can be sued

1)

Foreign Corps.
Doing Business
a. With license can sue and be sued
b. Without license cannot sue, can be
sued

nd

B.

Special Corporations

1.

Religious Societies and the Corporation


Sole

A religious society, if controlled by aliens, is not permitted to


acquire lands.
A corporation sole is an incorporated office composed of
only one person as in the cases of the chief archbishop,
bishop, priest, minister or an elder of a religious sect which
may form a corporation sole for the purpose of managing its
affairs, property and temporalities.

In the converse situation, jurisdiction over the parent may


give jurisdiction over the subsidiary if the separate corporate
existence of each has not been adequately maintained or if
the parent has acted within the state as the subsidiarys agent.

2)

Not Doing Business (isolated transaction) can


sue and be sued
________________
PART FIVE: FOREIGN JUDGMENTS

Roman Catholic Administrator vs. LRC


HELD: The 60% Filipino capital requirement to own lands
was not intended to apply to corporations sole because it is
composed of one person usually a head or bishop of a
diocese but he is only the administrator and not the owner
of the temporalities. Such are administered for and in behalf
of the faithful who are Filipino citizens.

2.

Transnational Corporations

Transnational corporations are clusters of several


corporations, each with a separate entity, existing and spread
out in several countries, but controlled by the headquarters
in a developed state where it was originally organized.
But the transnational corporations are established under and
governed by each host countrys national laws.

C.

Phil internal law provides that if the domicile of the


partnership is not identified by the law creating it, it is
deemed domiciled in the place where it has its legal
representation or where it exercises its principal functions.

What matters are governed by the personal law of the


partnership?
1.
2.
3.

Derivative Jurisdiction over Foreign Corporations (parentsubsidiary)


2 Important Issues
1. whether ownership by the parent over the subsidiarys
stock is enough to give jurisdiction over the subsidiary

XVIII: Recognition and Enforcement of Foreign Judgments

Partnership is formed by 2 or more persons who bind


themselves to contribute money, property or industry to a
common fund with the intention of dividing the profits
among themselves.

However, all locally incorporated branches are joined


together by the common control and management of higher
officials in the home state.
As to liability, the single unit comprising the cluster is held
liable according to the laws of the host country but the
transnational corporation, in its entirety, is not answerable to
any legal order.

Partnerships

4.
5.

nature, attributes and capacity to contract of the


partnership
whether or not a partnership has been constituted (esp.
the conditions and formalities required)
determination of WON it requires a separate juridical
personality (Common law does not consider a
partnership a legal person but civil law endows
partnerships with a separate legal personality)
grounds for dissolution and termination of partnerships
liability of partners esp. if limited partnership is allowed

What are governed or subject to the law of the place of


business?
1.
2.
3.
4.

entitlements and limitations, in general


creation of establishments in the state
mercantile operations
jurisdiction of nations

52

A.

Distinction
Enforcement

between

Recognition

and

Foreign judgments- all decisions rendered outside the


forum and encompasses judgments, decrees & orders of
courts of foreign countries as well as of sister states in a
federal system of govt.

Conceptual & Procedural Differences between Recognition


& Enforcement:
Rules on recognition & enforcement are analogous but there
are differences in conceptual & procedural aspects.
ENFORCEMENT: This happens when a successful plaintiff
fails to enforce judgment in the forum court so he seeks to
carry out the execution of the judgment in another state.
This requires the filing of an action and a new judgment
before the properties of the defendant can be attached.
RECOGNITION: This may arise when a successful
defendant wins and asserts that decision to preclude the
plaintiff from filing a suit on the same claim in another
forum. It is basically a passive act because it does not require
the filing of an action in another forum. EX. Decree of
divorce.

B. Bases of Recognition and Enforcement of Foreign


Judgments
C. Policies Underlying Recognition and Enforcement

RES JUDICATA- seeks to end litigation by disallowing suit


on the same claim

1) Comity
1. Res judicata
According to Cheshire, the theory on comity mean that in
order to maintain reciprocal treatment from the courts of
other countries, we are compelled to take foreign judgments
as they stand & to give them Full faith & Credit.
Comity calls for reciprocity between the concerned
jurisdictions. Thus, forum A will withhold recognition &
enforcement of prior judgment if it comes from Forum B,
w/c does not give same concession to forum A judgment.

2) Obligation of foreign judgments

Many courts recognize & enforce foreign judgments on


ground of res judicata, under which principle:
a. those who contested an issue shall be bound
by the result &
b. matters once tried & decided w/ finality in
one jurisdiction shall be considered as settled
b/w the parties
Thus, parties are prevented from litigating issues already
determined by a local judgment.

This doctrine of obligation is derived from the rigid &


unyielding vested rights theory.
Judgment of a foreign court of competent jurisdiction is
considered as imposing a duty or obligation on the losing
litigant.
i.e.:
Forum 1- adjudicates debt owing to plaintiff
Forum 2- treats F1 judgment as evidence of debt
w/c may be enforced in F2 by an action of debt

In Anglo-American jurisprudence, foreign judgments are not


open to reexamination on merits when placed in issue
before local courts subject to a few exceptions.

Goddard vs. Godard


(1870)
FACTS: Godard (French) obtained a favorable ruling by a
French court arising on a charter party obligation against
Gray (English). The French court interpreted the clause
penalty for non-performance of this agreement, estimated
amount of freight as a clause that sets the limits to liability
to one voyage between the parties to the charter party
contrary to the English interpretation. When this French
judgment was sought to be enforced in England, Gray
interposed in defense that the erroneous French judgement
is a bar to the action for enforcement in England.

Rule 39 Sec 40:

The principle seeks to accomplish the policy of giving


finality to litigation. Public policy dictates diminishing the
judicial energy invested in deciding suits, encouraging
confidence in court decrees and securing the legitimate
expectations of successful plaintiff or defendant that he will
no longer be harassed into protecting his interests.
A foreign judgment of a tribunal of a foreign country, having
jurisdiction to pronounce judgment renders it conclusive
upon the title to the thing while a judgment against a person

is presumptive evidence of a right as between the parties &


their successors in interest
2.

It considers the plaintiffs cause of action as merged in the


judgment. Thus, he may not relitigate that exact same claim.
3.

HELD: it is not a bar. In England, foreign judgement are


enforced based on the principle that where a court of
competent jurisdiction has adjudicated a sum of money to be
due from one person to another, a legal obligation arises to
pay the sum, on which an action of debt to enforce the
judgement may be maintained and not merely out of
politeness and courtesy to other tribunals of other countries.
Anything that negates the existence of a legal obligation or
excuses the defendant from performance is a good defense
to the action (ex. Evidence that court exceeded its
jurisdiction or the judgement was obtained thru fraud)

Merger

Bar

This is where a successful defendant interposes the


judgment in his favor to avert a second action by plaintiff on
the same claim. By direct estoppel, the relitigation of all
matters decided are precluded
In addition, DOCTRINE OF COLLATERAL ESTOPPEL
renders conclusive all essential issues of fact actually
litigated in the suit decided on by the foreign court.
Distinction between Res Judicata & Collateral Estoppel

53

COLLATERAL ESTOPPEL- concerned with preclusion


by barring relitigation of an issue already litigated on in a
prior proceeding
D. Requisites for Recognition or Enforcement
1)

The foreign judgment was rendered by a judicial


or a quasi-judicial tribunal which had jurisdiction
over the parties & the case in the proper judicial
proceeding.

2)

The judgment must be valid under the laws of the


court that rendered it

3)

The judgment must be final & executory to


constitute res judicata in another action

4)

The state where the foreign judgment was


obtained allows recognition or enforcement of
Philippine judgment

5)

The judgment must be for a fixed sum of money

6)

The foreign judgment must not be contrary to the


public policy or the good morals of the country
where it is to be enforced

7)

The judgment must not have been obtained by


fraud, collusion, mistake of fact or mistake

1. The foreign judgment was rendered by a judicial or a


quasi-judicial tribunal having jurisdiction over the parties &
the case in the proper case
A court validly asserts jurisdiction over actions in personam
based on consent of parties or relation of the parties or
events to the forum, thus satisfying minimum standards of
fair play & substantial justice.
In in rem proceeding, jurisdiction is based on the power of
the state over the property found within the territory
Northwest Orient Airlines vs. CA and C.F. Sharp
(1995)
FACTS: Under contract of agency, NOA authorized Sharp
to sell airline tickets. Sharp failed to remit the proceeds of

the ticket sales to NOA. The court in Tokyo failed to serve


the writ of summons against the Sharp branches in Tokyo.
NOA had these writs served in the Manila main office of
Sharp. Despite the notice, Sharp did not appear at the
hearing. NOA obtained a judgment in its favor. NOA sought
enforce the judgment in the Philippines. Sharp opposed
claiming that the service of process was void so the Tokyo
Court did not acquire jurisdiction over it.
HELD: Service of summons by Tokyo court was valid. A
foreign judgment is presumed to be valid and binding in the
country where it comes, until the contrary is shown. The
regularity of the proceedings and the giving of due notice is
also presumed. The party attacking has the burden of
overcoming this presumption. In CAB, SHARP alleged that
the extraterritorial service of summons is void. However,
Sharp failed to prove the applicable Japanese procedural law
to base its claim since in matters of procedure, lex fori
applies. Also, Sec. 14 of ROC applies, it allows service to be
made to:
a. resident agent designated (if it has one,
the designation is exclusive)
b. if none, on the government official
designated by law ( Insurance
Commissioner foreign insurance co.;
Superintendent of Banks foreign
banking corps. & SEC other foreign
corps licensed to do business in Phils)
The government official shall transmit
the summons by mail to the principal
office.
c. any of its officers/agents within the Phils.
Sharp did not designate an agent so service on govt official
or any of its officers in Japan is allowed. The Court finds that
the service made by Tokyo court sufficient to fall under
service to the proper govt official.
(Tokyo DC- SC Japan Ministry of Foreign Affairs of Japan
Japanese Embassy DFA, Phils RTC sheriff delivered
summons to principal office)
Boudard vs. Tait
(1939)
FACTS: Boudards husband, employee of Tait, was killed
by co-employees. Boudard obtained a favorable judgment
against Tait who was declared to be in default in CFI of
Hanoi. She filed action for execution of Hanoi judgment in
CFI Manila. Court dismissed for lack of jurisdiction of
Hanoi court over Tait who was not a resident of French
Indo-China.

HELD: Hanoi court has no jurisdiction over Tait.


Jurisdiction in personam, over non-residents, in money suits,
must be based upon personal service within the state that
renders the judgment. At the time of the complaint, Tait was
not in Hanoi nor were his agents or representatives. Also,
the French law on service of summons was not applied.
Instead of serving a copy to the Atty Gen of the Republic
who shall visae the original, the summons were served in
Manila to J.M. Shotwell, a representative of Churchill & Tait
Inc, which is an entity entirely different from Tait.
Ramirez vs. Gmur
(1918)
FACTS: The will of Bischoff contained a statement to the
effect that he had no living forced heirs. Leona Castro,
Bischoffs recognized natural daughter, had 2 sets of
children from 2 marriages, who claim to be heirs of
Bischoff.
first married to Von Kaufmann and had 3 children but
Von Kaufmann obtained divorce on France
Castro was remarried to Dr. Mory and they had 2
children
HELD: as to the Mory children NO, the second marriage
is void. The right to inherit pertains only to legitimate,
legitimated and acknowledged natural children. The French
decree of divorce is not valid in the Philippines. French
court had no jurisdiction to entertain actions for dissolution
of marriages of performed in the Phils over persons
domiciled here. The RULE is that when a court, where
neither of the spouses are domiciled, and to which one or
both, may resort merely to obtain decree of divorce, issues
such decree, the divorce is not entitled to recognition
elsewhere.
As long as the foreign court acquired jurisdiction, its
decisions will not be disturbed whether it was reached
through an adversary proceeding or by default.

Somportex vs. Philadelphia Chewing Gum Corp.. Court


rejected Philadelphias contention that a default judgment by
the English courts should not be extended hospitality by
American courts.
In the absence of fraud or collusion, a default judgment is
as conclusive as adjudication between the parties as when
rendered after answer & complete contest in open court.

54

The polestar is whether a reasonable method for notification


is employed & reasonable opportunity to be heard is given
to the person concerned.
Borthwick vs. Castro
(1987)
FACTS: Borthwick (US) owned real properties in Hawaii.
He issued promissory notes to Scallon but failed to pay the
same. Scallon sued him in Hawaii. B was issued summons
while in California which process was valid under Hawaiian
law. For failure to enforce the judgement, S filed action in
Phils. Bs defense is that the Hawaii court has no jurisdiction
over the cause of action and over his person.
HELD: Foreign judgements are presumptive evidence of the
rights between parties and rejection may be justified, among
others, by want of jurisdiction of the issuing authority, among
others. But in CAB, such rejection was not justified. What
Borthwick seeks in this appeal is a 3 chance to contest the
jurisdiction of the foreign court. In order to do that, he must
show that the declaration of default was incorrect. But
Borthwick did not do this. Borthwick was given an
opportunity to file his answer in the Hawaii court, he was
also given a chance in the CFI, Makati, but he failed to do
the same.
rd

2. The judgment must be valid under the laws of the court


that rendered it
In Pemberto vs. Hughes although there was error in
procedure, since the Florida court was competent & no
substantial injustice was committed, the English court did
not consider the error as to significantly alter an otherwise
valid decree.

3. The judgment must be final & executory to constitute res


judicata in another action
If judgment is interlocutory or provisional in character w/c
contemplates that a fuller investigation leading to final
decision may later be held, it creates no obligation on the
forum court to recognize it.
Nouvion vs. Freeman
(1889)
FACTS: Nouvion filed an action for administration of the
estate of Henderson. In order to show that he was
Hendersons creditor, Nouvion alleged that he obtained a
foreign judgment establishing Hendersons indebtedness to
him.

HELD: The Spanish judgment cannot be sustained because


it was not yet final and conclusive. Where a court of
competent jurisdiction has adjudicated a certain sum as due
from one to another, a legal obligation arises, on which an
action of debt to enforce judgment may be maintained. But
to come within the terms of law properly laid down,
judgment must result from an adjudication of a court of
competent jurisdiction, such judgement being final and
conclusive. It is not sufficient that the judgement puts an end
to and finally settles controversy. It must e shown that in the
court by which it was pronounced it conclusively and finally
settles forever the existence of debt of which it is sought to
be made conclusive.
Querubin vs. Querubin
(1950)
FACTS: Following their divorce because of Margarets
infidelity, rendered in New Mexico, their daughter
Querubina was kept in a neutral home. Silvestre then
obtained an interlocutory decree granting him custody.
Margaret had the decree modified since the she was
remarried and had a stable home for Querubina. When
Silvestre fled to the Philippines with Querubina, Margaret
filed for habeas corpus. She asserts that the interlocutory
order should be complied with pursuant to Article 48 Rule
39.
HELD: Her contention is erroneous. A foreign
interlocutory order in favor of Margaret did not establish a
vested right with respect to rightful custody over Queribina.
The decree is not yet final but subject to change with the
circumstances. Generally, divorce decree awarding custody
of child to one spouse is respected by other states but such
decree has no effect in another state as to facts and
conditions occurring subsequently to date of decree. Court
of another state may award custody otherwise upon proof of
subsequent matters justifying such decree to the childs
interest.

4. The state where the foreign judgment was obtained allows


recognition or enforcement of Philippine judgment
In Hilton vs. Guyot, a French judgment was not recognized
by a US court because it found out that French laws allowed
review of American judgments on the merits. This ruling is
widely criticized because:
Instead of being a mutual exchange of privileges,
comity was used as a means of retaliation.

The court in Hilton discriminated against the litigants


on account of the policies of their governments which
they were in no position to shape and alter.
It can be argued that the task of formulating policies
through reciprocity is a power misplaced in the
judiciary and should be appropriately wielded by the
other branches of government.

Trautman and Von Mehren point out the difficulties with


the reciprocity requirement.
a. its normal tendency is to lower rather
than raise the standards of practice
b. the private litigants burdened may not
be closely attached to the legal order
sought to be changed
c. the administration of reciprocity clauses
can be complicated esp. where case law
systems are affected since finding the
exact foreign law that grants reciprocity
is still nebulous. It is unclear whether
reciprocity is proved by general
recognition of such or requires a specific
recognition for a case identical or
analogous to the one before the court.
Cowans, et al. vs. Teconderoga Pulp and Paper Co.
(1927)
FACTS: Cowans obtained a Quebec judgment in their favor
for a sum of money. TPP asserts in defense that this
judgment is not conclusive upon, but merely a prima facie
evidence before the US courts, pursuant to Quebec law.
TPP alleges that since Quebec law does not reciprocate as to
judgements of NY courts, NY should also not recognize the
Quebec judgment as adjudications of the issues.
HELD: This claim of TPP pursuant to the Hilton vs. Guyot
doctrine should not be followed. Persuasiveness of a foreign
judgment is not dependent upon comity nor reciprocity.
Even without these principles, a judgment has its own
strength. Following the Hilton vs. Guyot ruling would
deprive a party of the private rights he has acquired by
reason of a foreign judgement because the country in whose
courts the judgement was rendered has a different rule of
evidence than what the recognizing court has and does not
give the same effect as the latter gives to a foreign judgment.

5. The judgment must be for a fixed sum of money


Unless the foreign judgment specifies performance or
delivery, there is nothing for the forum court to enforce. In
Sadler vs. Roberis, the English court held that until taxation,

55

the plaintiff could not enforce his claim because the


Jamaican court decided that from the sum due him should
first be subtracted the costs incurred by the defendant which
was to be taxed. Hence, the amount decreed was not fixed.

6. The foreign judgment must not be contrary to the public


policy or the good morals of the country where it is to be
enforced
Querubin vs. Querubin
(1950)
HELD: It goes against the law, public policy, and good
customs that a mother who violated her marital vows should
have custody (referring to the fact that Margaret was having
an illicit affair with another man).

7. The judgment must not have been obtained by fraud,


collusion, mistake of fact or mistake of law
Whether or not there is fraud is decided by the court where
enforcement of judgment is sought on the basis of its own
internal law. A problem may arise when the internal law is
not in agreement with the notions of equity of the foreign
state.

Rule 39, Sec. 50


Effect of Foreign Judgment. The effect of a judgment of a
court of a foreign country, having jurisdiction to pronounce
the judgment is as follows:
a.
in case of a judgment upon a specific
thing, the judgment is conclusive upon the title to
the thing
b.
in case of judgment upon a person, the
judgment is a presumptive evidence of a right as
between the parties and their successors in interest
by a subsequent title; but the judgment may be
repelled by evidence of want of jurisdiction, want
of notice to the party, collusion, fraud, or clear
mistake of law or fact.
This rule does not refer to intrinsic fraud which goes to the
merits of the case. To impeach a foreign judgment, fraud
must be extrinsic, collateral act which vitiates the most
solemn proceedings of the courts of justice such as
collusion by the parties, suppression of an important
document or the presentation in evidence of a forged will or
falsified affidavit. Extrinsic fraud signifies that a party is
deprived of his day in court.

Philippine Aluminum vs. FASGI


(1950)
FACTS: FASGI (US) entered into a distributorship
agreement with PAWI (Phil). PAWI shipped defective
goods to FASGI. FASGI sued PAWI for breach of contract
in US court. They entered into a settlement but PAWI still
failed to pay. US court issued a certificate of final judgment
upon application by FASGI of entry of judgment. FASGI
was not able to satisfy the claim in US so it filed a complaint
for enforcement in RTC. RTC dismissed but CA reversed.
HELD: California court judgment may be enforced. A
judgment for a sum of money ordered in a foreign court is
presumptive evidence of a right between the parties and their
successors-in-interest, but when suit for enforcement is filed
in Phil court, the judgment may be repelled by evidence of
want of jurisdiction, want of notice, fraud, collusion or a
clear mistake of law or fact.
In CAB, PAWI failed to prove that there was collusion
between its counsel, Mr. Ready, and FASGI in entering into
the settlement and in agreeing to an entry of judgment
against PAWI. PAWI should have raised the issue before
the forum court in line with the principle of comity of
nations that a court should refrain from assuming the power
to pass upon the correctness of the application of laws and
evaluation of facts of judgments issued by foreign courts.
Puyat vs. Zabarte
(2001)
FACTS: Z filed an action to enforce money judgment
rendered by the Superior Court of California against P. RTC
by summary judgment ordered Puyat to pay Z pursuant to
Judgment of Stipulation for Entry of Judgment contained in
the Compromise Agreement between them in the Calif.
court. CA held that P is estopped from assailing the
judgment that had become final.
HELD: The summary judgment is allowed. Since the
present action lodged in the RTC was for the enforcement
of a foreign judgment, there was no need to ascertain the
rights and obligations of the parties based on foreign laws or
contracts; the parties needed only to perform their
obligations under the Compromise Agreement they had
entered into. None of the reasons for invoking forum non
conveniens barred the RTC from exercising its jurisdiction
(forum shopping, overcrowded dockets, harassment of
defendants, etc.) In CAB, there was no more need for
material witnesses, no forum shopping or harassment of
Puyat, no inadequacy in the local machinery to enforce the
foreign judgment and no question raised as to the
application of any foreign law.

E. Grounds for Non-Recognition


Uniform Money-Judgment Recognition Act of the US,
Section 4:
(a) A foreign judgment is not conclusive if1. The judgment was rendered under a system which
does not provide impartial tribunals or procedures
compatible with the requirements of due process of law
2. The foreign court did not have personal jurisdiction
over the defendant
3. The foreign court did not have jurisdiction over the
subject matter
(b) A foreign judgment need not be recognized if1) The defendant in the proceedings in foreign court
did not receive notice of the proceedings in
sufficient time to enable him to defend
2) The judgment was obtained by fraud
3) The cause of action or claim for relief on which
judgment is based is repugnant to public policy of
the state.
4) The foreign judgment conflicts with another final
& conclusive judgment.
5) The proceeding in the foreign country was
contrary to an agreement between the parties
under which the dispute in question settled
otherwise than the proceeding in that court
6) In the case of jurisdiction based only on personal
service, the foreign court was a seriously
inconvenient forum for the trial of the action
Grounds 1-3 under letter b are mandatory & the last 3 are
discretionary.
The ground on non-recognition for lack of jurisdiction in
personam is most debatable. Most courts consider
jurisdiction of foreign court as appropriate when there are
significant contacts between forum states & individuals.
The service of summons as the traditional basis for exercise
of jurisdiction has been eroded.
The ground that foreign court was seriously inconvenient
employs doctrine of forum non conveniens to restrain use of
presence as cornerstone of jurisdiction.
Art 23 Hague Convention on Jurisdiction, Applicable Law,
Recognition, Enforcement & Cooperation in re of Parental
Responsibility & Measures for Protection of Children:
Considering the best interests of child, recognition of
measures directed for protection of the child or his property

56

may be refused if such were taken without giving the child


opportunity to be heard or if contrary to public policy.
Violation of ordre public & nonobservance of due process
are included as grounds for non-recognition in many Hague
Conventions.
F. Modern Developments in Enforcement of Foreign
Judgment
1. The Hague Conference on Private IL Convention on

Recognition & Enforcement of Foreign Judgments in Civil &


Commercial Matters established conditions & requisites for
contracting states to recognize & enforce each others
judgment.
Contributions:
a) provisions on applicability of Convention
irrespective of nationality
b) non-refusal for sole reason that court of state of
origin has applied a law other than that which
would have been applicable according to the rules
of Private IL of the state addressed
c) it addresses the question of whether a default
judgment is subject to enforcement
d) establishes recognition & enforcement procedures
The seventh session looked into possibility of a general
convention on recognition & enforcement of judgments
whose chief benefit will be the relatively uniform procedure
among contracting states.
2. The EEC Convention of 1968
Six countries comprising the European Economic
Community are signatories to Convention on Jurisdiction of
Courts & Enforcement of Decisions
The Convention extends to Common Market area the reach
of jurisdictionally improper for a now available against nonresidents under procedural systems of 4 member states.

3. The Uniform Money-Judgments Recognition Act


This seeks to inspire more confidence in stability of
American law & bring together into one statute all common
law rules of recognition from jurisprudence.

What does the act cover?


It is applicable to any foreign country judgment that is final
& conclusive & enforceable when rendered even though an
appeal is pending or it is subject to appeal.

judgment is unquestionably valid and is binding between the


parties. When the judge who is the final exponent of that
law, authoritatively declares that the assignment by the
Custodian of the assets of the Manila firm cannot and will
not be allowed to affect the rights of the party concerned in
Hong Kong, the court ruled that it is not possible for a
foreign court to pronounce his decision wrong.

G. Procedure for Enforcement


Procedure in other civil law countries
The Philippines has adopted the common law practice of
not instantaneously executing foreign judgment.

MODES OF ENFORCEMENT
A. First Mode: Need for New Judicial Action
Procedure in Philippines
(Compared to simple procedure of exequaure, Philippine
mode is protracted & expensive).
Our laws require that a petition should be filed in proper
court attaching authenticated copy of foreign judgment to be
enforced.
Philippine consul must certify that it had been rendered by a
court of competent jurisdiction. The petition must comply
w/ all the requisites of an enforceable judgment.

Requirement to file an action anew


Attempt to reconcile the principle of territorial jurisdiction
of courts w/c demands that the enforcement of a judgment
outside the territory of rendering court must be placed upon
some other basis than the authority of the rendering court
w/c ceased at its jurisdictional limits- & the principle of res
judicata.
Ingenohl vs. Olsen and Co.
FACTS: Ingenohl obtained a HK judgment declaring it to
be the owner of the trademark against Olsen. Ingenohl then
recovered the sums awarded by the HK judgment in an
action for collection in Manila. Olsen appealed. The appeal
was granted because the trial court erred in not taking into
account the fact that Olsen had bought the Ingenohl
trademark in a sale of the same conducted by the Alien
Property Custodian. Hence this petition by Ingenohl.
HELD: There is no error on the part of the HK court. In
authoritatively passing upon the issue of not giving effect to
the sale by the Alien Property Custodian, it cannot be said
that the HK tribunal committed a wrong decision. The

B. Second Mode: Exequatur - -Summary proceeding also


known as exequatur procedure.
Authenticated copy of foreign judgment need only be
accompanied by a certification from Clerk of Court. Once
validated the foreign judgment has same effect as local
judgment. Example: French formule executoire, used in
France, Italy, Austria

C. Third Mode: Judgment Registration


It may or may not involve judicial supervision. Authenticated
copy of foreign judgment filed w/ registrars office w/ other
proofs required by domestic laws & foreign judgment is
converted into a local one that is immediately executory.
It is used in Australia, England.

Distinctions between a foreign country & a sister-state


judgment in United States
These differences are premised on possible absence of
principles underlying res judicata practices within foreign
country.
Von Mehren & Trautman: There are significant differences
between the 2 to justify refusal of a foreign country judgment
even though it could be recognized if rendered by a sister
state:
1) US Constitution clause of full faith and credit.
This substitutes a federal policy in place of
individual state policies, thus demanding that
sister-state judgments be given more than minimal
preclusive effects.
2) Judgments of sister-state may be brought to US
Supreme Court for review
3) Judgments rendered by sister states are based on
legal procedures & standards similar to those
whose recognition is sought.
On the other hand, a foreign country judgment may have
been decided under rules that disregard private rights &

57

duties or fundamental policies that the recognizing court


deem important.
In practice, courts are inclined to give recognition because of
1) overriding public interest
2) dictates of public policy that there be an end to litigation.