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COURSE OUTLINE IN CONFLICTS OF LAW

By: Atty. Enrique V. dela Cruz, Jr.

CONFLICTS OF LAW

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.

By: Atty. Enrique V. dela Cruz, Jr.

PART ONE: INTRODUCTION


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

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.

A. 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.

B.

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.

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.

Distinguished from Public


Law and other disciplines:

International

Public

Private
Internation
International
al Law
Law
Principally governs Principally governs
states
in
their individuals in their
relationships
private transactions
amongst
which involves
a
themselves
foreign element
As to sources of law:
Codified in Art. 38 Generally
derived
of the Statute of from the internal
International Court law of each state
of Justice
and
not
from
any
international
law
extraneous
to
As to persons involved:
Governs
only
Governs individuals
states and
or corporations

Atty. Dela Cruz is an MCLE lecturer and a Bar


Reviewer at the Jurist Bar Review Center and the
Cosmopolitan Review Center. He teaches law at UST,
FEU and the Bulacan State University. He obtained his
Master of Laws (with Distinction) from the London
Metropolitan University, and a Postgraduate Diploma
in International Trade Law from the University College
London (UCL), U.K., both as a Chevening scholar of
the British government. He completed a Postgraduate
Fellowship on Leadership and International Relations
from the John F. Kennedy School of Government,
Harvard University, USA. He also holds a Masters in
Public Management degree from the Ateneo School of
Government. He obtained his Bachelor of Laws
degree (with honors) and an AB Legal Management
degree (cum laude) from the University of Santo Tomas
rd
as a Rectors Scholar. He is on his 3 term as an
elected Councilor of Baliuag, Bulacan and the current
Vice-President (Luzon) of the Philippine Councilors
League. He is also a Partner at the Ponce Enrile
Reyes & Manalastas (PECABAR) Law Office in Makati
City.

internationallyAs to transactions:
Involves state-toRelates

to

private

II. or
governmentof
of Laws
to-Conflict
government
matters
As
to remedies:
In case of violation,
Roman
Law
a 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

C.

A Brief History and Development

transactions

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

Ius gentium

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.

Object, Function and Scope

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.

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

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

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
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:

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

th

century, France

Charles

Dumoulin advocated a
method to determine what law would
govern contracts between different
nationals

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

16

Bertrand DArgentre formulated the


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

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
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

th

19

Century

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.

Frederich Carl Von Savigny


- founder of modern private IL
-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

Pascuale Mancini

advanced nationality theory in


matters
concerning
status,
capacity and private interests of
the individual

B.

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
nd
-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.

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.
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.
basic source of law is the 1987
Constitution which contains principles on
nationality and comity.
One

Special statutes were also enacted to


govern cases with foreign elements, to
wit:
1. Corporation Code
2. General Banking Act
3. Foreign Currency System Act
4. Phil Foreign Law Guarantee Corp
5. Retail Business Regulation Act
6. Anti-Dummy Law
7. Nationalization of Rice and Corn Industry Act
8. Insurance Code
9. IP Code
10. Patent Law
11. Trademark Law
12. COGSA
13. Salvage Law
14. Public Service Act
15. Civil Aeronautics Act
16. Phil Overseas Shipping Act
17. Investment Incentives Act
18. Export Incentives Act
19. 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.
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
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.

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?

The American Law Institute published 2


studies on CL: Restatement of the Conflict
of Laws and a Second Restatement with
William Reese as Reporter.

A.

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.

IV.

of

Judicial

Bases of Judicial Jurisdiction (3 groups):


1) JD over the person (based
forum- defendant contacts)

D. Judicial decisions

PART
TWO:
JURISDICTION
CHOICE OF LAW

Basis of Exercise
Jurisdiction

AND

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?

on

2) JD over the res (based on forumproperty contacts)


3) JD over the subject matter

1. Jurisdiction
the Person

over

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.
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.
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.

Quasi

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.

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).

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

rule: in substituted service, the premise


is that the defendant
territorial JD of the court

is

within

the

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

basis of JD: presence of the property


within the territory
3) 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)

2. Jurisdiction
over
the Property

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)

Pennoyer vs.
Nef (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 the suit is merely in
personam, constructive service in this
form upon a non-resident is ineffectual
for any purpose.

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.

The important thing to prove is what


kind of action is involved (to determine
sufficiency of form of service to be used)

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
were not

and

nothing

more,

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
ofend 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.
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.

Shafer 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.
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.
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 nonresident status.
Distinction, Shaffer and International
Shoe: while International Shoe requires
minimum contacts between the defendant
and the forum, Shaffer demands that
minimum contacts exist among the forum,
defendant and the cause of action.
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.

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. 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
cross-complaint 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 power to enter upon the inquiry,


not whether its conclusion in the
course of it is right or wrong.

Jurisdiction and choice of law do


not mean the same thing.

B.
Presence/Jurisdiction:
1) Traditional Views
a) Pennoyer

physical presence
2) Modern Views
a)

b)

c)

actual

Intl. Shoe contact


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

disregards
strict distinction between
in rem and in personam
Shaffer

minimum
contacts
between
the
properties
and forum;
fundamental fairness test

Long-arm statutes: already identify what


are the bases of JD.

Ways
of
Dealing
Conflicts Problem

with

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
nonresident plaintiff from choosing
the forum because of larger jury
verdicts, etc.)
2) burdensome on the court
taxpayers
(severe backlog
cases)

or
of

3) local machinery is inadequate to


effectuate a right (no way for
court to secure evidence
and
attendance of witnesses)
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 in
NY in behalf of the victims. Union
carbide moved to dismiss on the
ground of forum non conveniens.
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.).
Wing On Company vs.
Syyap (1967)
FACTS: Syyap failed pay Wing On, a NYbased 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) prevent abuse of court processes
2) burdensome on the court/taxpayers
3) 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.
Under the Rules of Court, the
foreign law may be proved by:
a) official publication
b) 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.

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.
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.
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 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
accordanc with Nevada law must be
e
affirmed.
3) The case falls under any of the
exceptions to the application
of foreign law
a) The foreign law is contrary
an important public policy
the forum
b) The foreign law is penal in
nature
c) The foreign law is procedural
nature
d) The foreign law purely fiscal
administrative in nature

to
of

in
or

e) The application of the foreign


law will work undeniable injustice
to the citizens of the forum

f)

The case involves real or


personal property situated in
the forum
g) The application of the foreign
law might endanger the vital
interest of the state
h) The foreign law is contrary to
good morals
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
simplicity,
uniformity

that
emphasize
convenience
and

a. vested rights theory


-

st

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.

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.

c.
-

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)
Criticisms to the Approach: failure to
resolve conflicts cases with considerations
of policy and fairness.

b. 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.

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
-identifies a plurality of factors:
i.
needs of the interstate and
intl system
ii.
relevant policies of
the concerned states
iii.
relevant policies of
other interested states
iv.
protection
of
justified expectations of
the parties
v.
basic policies underlying
the particular field of law
vi.
certainty, predictability
and uniformity of result
vii.
ease in the determination
and application of law to be
applied
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

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.
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
agreement bars suit.

defense:

Illinois

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. 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:

1st: determine whether the case


involves
a
true,
false
or
apparent conflict (false conflict:
only one state has an actual
interest in having the law applied

and the failure to apply the other


state law will not impair its policy)

2nd: 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 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
defendantsinsurance 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?

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

d. Trautmans
Analysis
-

Functional

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
HOW?
Court
should
consider
whether the law of a state reflects
an emerging or regressing
policy.

e. Leflars
ChoiceInfluencing Considerations
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.

one element of a situation to connect


case to particular legal community.
Goal: simplicity, convenience, uniformity

Multi-aspect method: modern approach by


which all 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 &


Traditional approaches do not consider
policy; all modern approaches look at
policy.

duties, or to the status, condition and


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

Art 16: Real property as well as personal


VI.

property is subject to the


country where it is situated.

The Problem of Characterization


A. Characterization
and
Single- Aspect Method

Single-aspect
theories

the

method: choice of law

traditionally

concentrated

on

law of the

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.

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
property
husband.

to
husband,
community
belongs
absolutely
to

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

2. Tortious: law of the place where


tortuous conduct or injury occurred

2.

tortfeasor must be abated. But under


California law, an action for tort survives
the death of tortfeasor.

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


Why apply
procedure?

forum

law

to

matters

of

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.

Grant vs.
Mcaulife
(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

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 wrong resulting to a
physical
injury
shall
not
abate
because of the death of the wrongdoer.
Plaintiffs cause of action survives
Pullens death.
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.
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
(as
procedural or substantive) is debatable:

1) Statute of Frauds
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
classified as
only barred
impairing the

limitations are traditionally


procedural because they
the legal remedy w/out
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


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.
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.
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.
The presence of an incidental Q is one
instance which calls for the employment of
depecage.

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
employs depecage by choice.

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.
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.

g.

ease in determination &


application of law to be applied

The consideration of any elements &


acceptance by courts of depecage help
ease restrictions of single aspect method.
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 choiceof-law analysis, the express reference to
depecage in case law, both in US & the
Phil still uncommon.

VII.

The Problem of Renvoi


A.

Definition

Renvoi a procedure whereby a jural


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
applicable law:

in

choosing

the

a.

needs of interstate & international


system

b.

relevant policies of the forum

c.

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

e.

the basic policies underlying


the particular field of law

f.

certainty, predictability,
uniformity of results, and

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


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)
Art.
16
CC

State B

Internal
law
Conflictof- laws
rule

B. Various ways of dealing with


the Problem of Renvoi

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

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.
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 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 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
perpetually-enclosed 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.

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 passengerguest 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 reference back (renvoi)
to Philippine law, but would still refer to
Texas law.

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.

1.
2.

2) before such person or officer as


may be appointed by commission
or under letters rogatory.

Proof of Foreign Law

Foreign law may be


presenting either of the ff:

proved

general, consul, vice- consul, or


consular agent of the Phils.

by

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

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
establish cause of action

inability

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.

to

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.

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:

conclude that
application.

apply forum law,


parties acquiesce to its

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 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.
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: 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 crossexamine 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.
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.

Only self-serving testimonies


were
allegedly presented. Also, marriages are
claimed to be void according to Chinese
law.
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.
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
2) The foreign law is procedural in
nature
3) Issues are related to property (lex
situs)
4) The issue involved in the
enforcement of foreign claim is
fiscal or administrative
5) Foreign law or judgment is
contrary to Good Morals
6) The application of Foreign law will
work Undeniable Injustice to the
Citizens of the Forum
7) The Foreign law is Penal in
Character
8) The application of the Foreign law
might endanger the Vital Interests
of the State
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

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.

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:

Pakistan Intl Airlines v.


Ople (1990)
FACTS:
2
Filipino
stewardessemployees 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

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.

2. The
foreign
law
procedural in nature

is

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.
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

3. Issues
are related
property (lex situs)

to

The universally-accepted rule is that as


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

4. 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.
Opposition to exception: person should
not be permitted to escape his obligations
in maintaining the government by crossing
state lines.

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.
ex. Hiring for killing, bribery of
public
officials,
marriage
between
ascendants and descendants

6. The
application
of
Foreign law will work
Undeniable Injustice to
the Citizens of the Forum

This exception is partly remedied under


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

8. The application of the


Foreign
law
might
endanger
the
Vital
Interests of the State

PART THREE: PERSONAL LAW

7. The Foreign law is Penal


in Character
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.
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.

IX. Nationality
A. Importance of a Personal Law
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.
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:


1) used to establish link b/w
individual & state, because
laws of each state presumed
to be made for an
ascertained population .
-since laws considered physical,
moral qualities of citizens, laws
should apply to citizens wherever
they are
2) an individuals nationality is
easily verifiable from
documents.

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.

Who

are

Filipino

citizens?

(Philippine

Constitution, Art IV)

Demerits:
1) 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.

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
accordance w/ law

naturalized

in

1. Natural-born Citizens
Importance of Nationality in the Philippines
Most civil law countries
national law theory.

follow

the

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.

Two principles w/c may be followed:

jus soli: looks to the law of the place of

ones birth to determine ones nationality


(followed in many common law countries).

jus sanguinis: rule of descent or blood.


Followed in the Philippines, articulated in
the Constitution.

Natural born citizens: citizens of the


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

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.

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.
Co vs. Electoral Tribunal of the
House of Representatives
(1991)
FACTS: Ong Jr. ran as representative of
the 2nd district of Samar and was
proclaimed the winner. The losing
candidates
filed
election
protests,
claiming that Ong Jr. was not a naturalborn citizen.
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.

2. Citizens by
Naturalization
Naturalization confers to an alien a
nationality after birth by any means
provided by the law.
In the Philippines, naturalization is by
judicial
method, under CA 473, as
amended RA 530.
The naturalization process was relaxed
under Marcos regime. Liberal method,
summary inquiry. This, however, is no
longer in force.

Qualifications
Naturalization

for

Applicants

for

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

Why the 10 yr
residence requirement?

So
government
can
observe
applicants
conduct
&
ensure
he
imbibes principles & spirit
of our Constitution.
o

When may period be


reduced to 5 years?

a)

applicant honorably held office


under the Phil govt. or under
any of its political subdivisions
b) applicant has established a
new industry or introduced a
useful invention in the Phil
c) Married to a Filipino woman
d) 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
e) 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
community in w/c he is living

w/

the

Proper & irreproachable


imposes
a
higher
standard of morality than
good moral character

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
natural-born 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, excluding from
the ban the alien vendee who
later
becomes
a
naturalized
Filipino

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 lawabiding citizen is inadequate.

4) 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.
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
or
the obtaining
receipts

lucrative

employment
of tangible

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.
o

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.

Exceptions to prohibition
on ownership of land:

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.

5) Must be able to speak & write


English or Spanish & any one of
the principal Philippine languages
6) 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.
o

Children must learn & imbibe


customs, traditions & ideals of
Filipinos so theyll become lawabiding citizenship.

Compliance
&
affirmative
showingotherwise, denied.

Non-compliance
because
insufficient finances: denied.

Disqualification for Naturalization


General Rule: Burden of proving
disqualification is upon the state.

of

But SC held that petitioner must prove


he has none of disqualifications.
The law must be strictly construed against
applicant because naturalization is
a

privilege, not a right.

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)
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
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)
4) if it is not fully established that
applicants nation grants reciprocal
rights to Filipino citizens
C. Procedure for Naturalization
The
following
naturalization:

are

the

steps

for

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


Gazette or newspaper of
publication the petition
heard (Sec. 9, Com. Act
as amended)

Official
general
will be
No. 473

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


the laws of the

Constitution

and

Philippines (Sec. 11, Com. Act No.


473, amended)

Declaration of Intention
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
Exemptions
Intention:

to

Filing

of

Declaration

of

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.

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.

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 nonimmigrants 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.

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)

Commissioner ordered her to leave and


sought her deportation. Spouses filed
appeal in SC.

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.

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.

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.

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
Citizenship

Declaration

of

Philippine

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
declaration of the citizenship
individual.

judicial
of an

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. direct act of Congress
2. naturalization
3. 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.

is not since the Australian Govt said


that he is still a naturalized Australian
citizen.

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: 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.

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.

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.

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

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
accepting commission
armed forces of a
country, subject to
exceptions

to, or
in, the
foreign
certain

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
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
7) cancellation of the certificate
of naturalization
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:

a) if
it
shown
that
said
naturalization
certificate
was
obtained fraudulently or illegally;

Certified copy of decree canceling


certificate forwarded to the Office of
the President & the Solicitor General.

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;

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.

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.

Only a Grant of Political Privilege:


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.
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.

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

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.
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

1) Child born of
o parents who are nationals
of country applying jus

sanguinis

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.

In determining rights of an individual


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

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.
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.
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.
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.
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.
2. Statelessness
Understood in two senses:
a) 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.
b) De
facto
stateless
person:
individual
possessed
of
a
nationality but whose country does
not give them protection outside
their own territory.

1) as punishment or
2) 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
nationality to a person born w/in
territory if he would otherwise
stateless.

its
its
be

*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.

- 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
Stateless Persons:

Problems

of

1) 1951 Geneva Convention on


Status Refugees
-provided some basic rights of stateless
persons
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.

prohibits states
depriving nationals of identity:
Convention

also

from

HELD: K is a stateless person. His


testimony,
aside
from
being
uncontradicted, is supported by the wellknown 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.

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.
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

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

2) the notion of domicile differs


widely in different states (some
distinguish between domicile and
residence;
others
attribute
different meanings of domicile for
different purposes)
3) 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)
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)
FACTS:
Imelda
Marcos
filed
her
Certificate
of
Candidacy
for
representative of 1st District of Leyte. A
petition to disqualify her was filed on the
ground that she lacked the 1-yr
resident requirement as provided for in
the Constitution. In her COC, she
placed 7 months as length of
residence.
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.
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.
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.
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.
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
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.
D. Kinds of Domicile
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.

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.
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.
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.
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.

Special Problems in Domicile of Choice


vis--vis Constructive Domicile
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 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 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: 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.
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


separation of the

there

is

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

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.

A. 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

Legislative
Distinguished
Jurisdiction

Jurisdiction
from
Judicial

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.

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.
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.

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.
HELD: Phil court has jurisdiction. The
authority and jurisdiction of courts are
not a matter of private law of 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.
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 intrauterine 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 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.

Three ways of dealing with the problem:


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

3.

*Phil
law
follows
presumption (1).

the

rebuttable

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.

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
4. 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.

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.

This case should have been resolved as


a capacity case instead of as a contract
case (characterization).
PART FOUR: CHOICE OF LAW PROBLEMS
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

Family Code Definition:


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.

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:
1) entered into by a man & a woman
2) both at least 18 years of age
3) solemnized by a person
specifically authorized by law

4) a permanent union unless one


party dies, or marriage is annulled
or
declared
void
in
special
circumstances
5) cannot be abrogated, amended or
terminated by one or both parties
at will
6) nature & consequences as well
as incidents are governed by law &
not subject to stipulation by
parties unlike ordinary contracts
7) 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. Philippine
Policy
on Marriage and the
Family
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 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) Authority of solemnizing officer

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

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 Wong to be excluded from the
country, on the ground that her
marriage to Blas was bereft of
substantial proof.
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.
Exceptions to Lex Loci celebrationis: The
Civil Code (Art 71) enumerates bigamous,

polygamous or incestuous marriages as


exceptions to the lex loci celebrationis rule.

The Family Code (Art 26) widens these


exceptions.
A foreign marriage although valid in the
foreign country where it was entered into
will be void in the Philippines if:
1) either or both parties are below 18
2) it is bigamous or polygamous
3) 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 o& distribution of the
properties of the spouses & the
delivery of presumptive legitimes
4) there was a mistake as to identity
of the contracting party
5) one of the contracting parties
was psychologically incapacitated
to comply with the essential
marital obligations
6) the marriage is incestuous
7) 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 state provides
substantive requirements of marriage.
Philippine
Law
sets
the
following
substantive or essential requisites:

1) Legal capacity: must be 18 years of


age
& not barred by any
impediment to marry each other
2) 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
th
up to the 4 civil degree
2) b/w step-parents & stepchildren
3) b/w parents-in-law & children-in-law
4) b/w adopting parent & adopted
child
5) b/w surviving spouse of adopting
parent
& adopted child
6) b/w surviving spouse of adopted
child
& adopter
7) b/w adopted child & legitimate
child of adopter
8) b/w adopted children of same
adopter
9) b/w
parties
where
one,
w/
intention to marry the other,
killed the persons spouse or his or
her own spouse
Marriages Between First Cousins:
st

Marriage of 1 cousins is no longer


incestuous but still void ab initio on the
ground of public policy.
It is submitted that our prohibition
st
against marriage of 1 cousins be limited
only to Filipino nationals because many
countries allow such marriages.
Marriages b/w foreigners whose national
st
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.

Hague Convention on validity of Marriages


allows a contracting state to refuse
recognition of the marriage if:
1) one of spouses was already
married (unless
marriage has
subsequently

become valid by virtue of


dissolution or annulment of
previous marriage)
2) spouses were related to one
another by blood or by adoption,
in the direct line or as brother or
sister
3) one of spouses had not attained
the minimum age required for
marriage
nor
acquired
the
necessary dispensation
4) one of the spouses did not
have the mental capacity to
consent
5) one of the spouses did not
freely consent to the marriage
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.
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.

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:
Christianity
prohibits
polygamous
&
incestuous marriages but care must be
taken to confine doctrine to cases deemed
incestuous by general consent of all
Christendom.
The state may resort to ultimate escape
device- contravention of a public policy
to w/hold recognition of validity of a
foreign marriage.
Rule: Marriages manifestly incompatible
with the ordre public of the state of
nationality of parties may be refused
recognition.
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.

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.
st

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.
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.
Additional requirements for:
1) aliens
submission
of
a
certificate of legal capacity to
contract marriage
issued by
diplomatic/consular office
2) stateless persons or refugeessubmission of affidavit stating

circumstances
showing
legal
capacity to contract marriage

4. Effects of Marriage
Personal Relations between the Spouses
These include mutual support, fidelity,
respect, cohabitation & right of wife to use
husbands family name)
What is the governing law? National law
of parties
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.
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.

Djumantan vs. Domingo: Filipino marries

Indonesian. They go to Philippines w/


intention of staying here permanently.
Subject of petition: Effect of marriage on
wifes right to stay in the Philippines.

There is
married to
admitted,
permanent

no law guaranteeing aliens


Filipino citizens the right to be
much
less to be given
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.

other

a foreigner? It would
governed by Philippine law.

still

be

Change of nationality after Marriage


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

Hague Convention on Matrimonial Property


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

of

nd:

Restatement 2
The wife who lives w/
her husband has the same domicile as
his unless special circumstances of wife
make such result unreasonable.
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.

extrinsic validity:
refers
to
formal
requisites, apply lex loci celebrationis
intrinsic validity: refers to essential
requisites, apply personal law of the
parties

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.
This rule shall not apply:
1) If both spouses are aliens
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

3) 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
Art 80 generally follows lex rei sitae.

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)

What law will govern the property


relations of spouses where one is a
Filipino citizen 7 the

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.
Divorce jurisdiction:

Basis of JD of some countries: Domicile of


one of the parties or matrimonial domicile
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.
Due process requires that forum court
have a substantive contact w/ the
relationship w/c it will decide won to
dissolve.

Hague Convention Relating to Divorce &


Separation: The 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 &
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. Divorce decrees
obtained by Filipinos
Divorce decrees obtained abroad have no
validity, not recognized in Philippine
jurisdiction.
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:
1.
2.

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.

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 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.
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.
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
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.

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)

Hague Convention on Recognition


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
C. Annulment and
Declaration of Nullity
Effect: Affects status & domestic relations of
parties.
Divorc
Distinction
from Divorce Annulment and
e

The

2.

Validity of Foreign Divorce


between Foreigners

of

ground

Nullity

occur
s
marriag
e

defect
Based on
s time
present

Grounds for Annulment & Nullity:

Sample conflicts Annulment Case

States w/ traditional choice-of-law


approach: follow the lex loci

celebrationis
o

States w/ policy-centered approach:


follow the law of state of marital
domicile (considered to have the
most significant interest in status
of persons)

M&F, domiciliaries of STATE A, both 18


years old

marry in STATE B w/out knowledge of


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

State C can exercise JD over the case but what is

the governing law?

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

Note that in either traditional or policycentered approaches, lex fori is not used;
recall that lex fori can be used in divorce.

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

Both lex loci celebrationis and law of


marital domicile can provide jurisdictional
basis, but only one can be a choice-of-law
in the determination of the annulment
decree.
Which states can claim
jurisdictional basis to hear
annulment or nullity case?

adequate
a conflicts

a) state where marriage was


celebrated
b) place of marital domicile

Wheaton vs. Wheaton: Even a court


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

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.
Most countries: fathers personal
law German law: law of head of
family
Law on parental relations include:
o Paternity
o Filiation
What law governs legitimacy of child in
the Philippines? National law of the parents.
If parents are of different nationality:
national law of father is controlling.
In the PHILIPPINES:
o

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:

as per Second Restatement On Legitimacy


of the American Law Institute
o

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:


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.
It is a judicial act w/c creates b/w 2
persons a relationship similar to that w/c
results
from
legitimate paternity &
affiliation.
Early societies considered it as a means
of
perpetuating
a
house
or
cult
threatened by extinction.
Original purpose: solace for childless or
people who lost children
Recent time: broader, more humane aim

Social & moral purpose: extend protection of


society (in the person of adopter) to the
orphan.

Thus, persons eligible to adopt expanded

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
jurisdiction and choice-of-law.

little basis for court to protect child


interest competently)
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

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

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.

These two introduced significant changes


in adoption law.

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

1) 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

RA 8552 (Domestic Adoption Act


Of 1998)

Change Pertinent to Conflict Law

Effects Of Adoption
2) 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.

RA 8043:
Before this, adoption of Filipino children
by foreigners was done pursuant to Rules &
Regulations
on
Foreign
Adoption
&
bilateral agreements.
RA 8043 regulate the adoption of Filipino
children by
o aliens, or
o Filipino
citizens
permanently residing abroad.
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.
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.

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: 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.

What law governs rights of adopted child &


other effects of legal adption? (law that
governed the creation of adoption)

2 different legal orders depending on which


law governed the creation of adoption:

1) If Personal law of adopter applied


same law governs effects of
adoption.
2) If personal law of child applied
such 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.
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.
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.
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


the lex situs; its transfer may
controlled by the a) lex domicilii, b)
situs, or c) lex loci actus (the proper
of transfer).

by
be

lex

law

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:

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)

a) Lex loci actus: law of the place


where the transaction was
completed

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.
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

contract

to

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:
the transaction does not
affect transfer of title to or
ownership of the land (proper law:
lex intentionis or lex voluntatis)

1) where

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) 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)
3) testate

or intestate
succession
and capacity to succeed, which are

governed by the national law of the


decedent

The lex situs law applies to the following:


1) formalities
of
a
convey property

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.

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 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.

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. Situs of Debts
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) mere rights of actions
b) rights represented by a
document
(capable
of
delivery and susceptible to
negotiation as a separate
legal entity)

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.

4. 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.

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 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

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
2. secure
stability
in
commercial
transactions
A.

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.
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.

B.

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.
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.

consent of the contracting parties


object certain
cause of the obligation

There are 3 possible laws that will govern


intrinsic validity of contracts:
1. law of the place of the making
2. law of the place of performance
3. law intended by the parties

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
establishing
contracting

ease
place

in
of

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
non-

and

valid

excuses

for

performance 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


stipulations shall control.

of

the

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. Choice of Forum Clause


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.
2.
3.
4.

the court is required by


statute to entertain the action
plaintiff cannot secure effective
relief
in
other
state
for
reasons other than delay
the
other
state
would
substantially
be
a
less
convenient place of trial
the agreement as to place of
action
was
obtained
by
misrepresentation,
duress,
abuse of economic power or
other unconscionable means

5.

it
would
be
unreasonable to
agreement

unfair
enforce

or
the

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.
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 nonresident 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 disappointing


why did the courts not recognize the
choice of forum clause? Courts are turfconscious; 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 forumselection 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. enforcement
would
be
unreasonable and unjust or
b. that the clause was invalid for such
reasons as fraud or overreaching or
c. 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
d. 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. 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 demand and
the unexplained delay in acting on her
claim, amounted to bad faith and
renders unquestionable its liability for
damages.

Specific
Instances
where
disregarded the adhesion contract:

court

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 low-income 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.

4. Special Contracts

or loss or damage of cargo. The Phils.


became a member thereof in 1951.

In sales or barter of goods, the law of the


place where the property is located will
govern (lex situs).

Liabilities of the Carrier:

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.

a.
b.

In contracts of pledge, chattel mortgage


and antichresis, the extrinsic and intrinsic
validity of the contracts are governed by
lex situs.
c.

Carriage of Goods by Sea


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
Transportation

International

d.

e.

in case of death or woundingcarriers 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.

Air

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

Lopez vs. Pan Am


(1965)

FACTS: Despite several confirmations,


Sen. Lopez and his family failed to get 1st
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

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

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.

F.

The Applicable law in the


absence of an Efective Choice
nd

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
1.
2.
3.
4.
5.

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

6.

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
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

4) in case of confession-of-judgment
clauses (waives the debtors right
to receive notice or authorizes
entry of judgment)

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

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

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

will
the
be.
the

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
o

lex domicilii
lex loci celebrationis

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.
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


is defeated, because if one
testators revoke the will,
other testators will have
instrument left

3)

it exposes a testator to undue


influence
& may even tempt one
testators to kill the other

4)

will
of
the
no

of

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.
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:
o
o
o
o

simple
convenient
does not require
notarization
guarantees absolute
secrecy

Demerits:
o
o

peculiarly dangerous
an invitation to forgery

short statements can


confuse handwriting
experts

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

- 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.
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 policy- centered
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 one
of property and not of succession, thus
making Philippine law the governing law
as the lex rei sitae.

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

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
(1282)

be

principally

considered.

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)
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) By implication of law; or
2) By some will, codicil, or other
writing executed as provided in
case of wills; or

Common law practice: law of the domicile


at the time of death.
of

the

place

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.

the following cases;

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?

law

Probate

Rule 76 Section 9 Grounds for disallowing


will.: The will shall be disallowed in any of

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)

Philippine law:
revocation.

E.

of

(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
Section 1. Will proved outside Philippines
may be allowed here. Wills proved and
allowed in a
to the laws
allowed, filed,
Court of First

foreign country, according


of such country, may be
and recorded by the proper
Instance in the Philippines.

Testamentary capacity is the capacity to


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)

comprehend the 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
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
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 1st and 5th 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.
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.

Administration of Estates

Duties of the administrator:

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
located in state

over

assets

b) ancillary- appointed by a foreign


court to look after the properties
located in such foreign state

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.
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:

succession national law

administration situs of
property (territorial/JDal)

G. Trusts

Trust:

a right of property, real or


personal, held by one party for the
benefit of the other.

Tort: derived
torquere or

from

the

French

word

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.

The trust contains an express choice-oflaw 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

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.
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.
Conflicts torts cases arise:
1) 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

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.
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.
C. Modern Theories on Foreign
Tort Liability

1. The
Most
Significant Relationship
This
theory
contacts with
parties.

considers
the
states
the occurrence and the

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

The court should first determine whether


there is a true or false conflict.

False conflict: only one state has an


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

Apparent conflict: more than one state


has an apparent interest in applying its law
to the case.
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.

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).

and its interest in having its law applied on


that issue.

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 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.

Law of the tort: deemed as the proper


law in questions involving regulation of
conduct.

Law

of

the

domicile

of

the

parties:

governs in matters that relate to lossdistribution 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


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.

i. Conditions
for
enforcement of tort
claims
a)

the

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

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


the foreign
manufacturer

of

Conflicts torts cases arise due to


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

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.
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.
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.

Societe Nationale Industrille Aerospatiale


vs. Lee Kui Jak:
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 not be able to pursue
legal proceedings against the Malaysian
company which operates and services the
helicopter.

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).

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,

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).

through their courts, do not reach out


beyond the limits

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.

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

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

HELD: The court has JD. In a prior


appeal it has been held that subjectmatter JD was not inappropriately
exercised even though the actions xxx
occurred outside the US.

Filartiga vs. PenaIrala (1980)


FACTS: Plaintiffs brought an action in the
US against Pena-Irala 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 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
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
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
and Crimes

between

Torts

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
Liability is attached
to the perpetrator
to indemnify the
victim for injuries
he sustained

An injury to the
state where it is
committed

F.

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

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) 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.
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.
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.

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.
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. 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)

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.
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.

Fowler

Cheng

Look
Chaw

US

English

English

Within
RP
territoria
l waters
Smoking
opium

Within
RP
territoria
l waters
Possessio
n and
selling of
opium
Acquired
JD

FLAG

LOCATION High seas

CRIME

theft

RESULT

No JD

Acquired
JD

In RP, we follow the French Rule.


XVII. Choice
Corporations
Entities

of
Law
Afecting
and Other Juridical

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
a Corporation

of

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 the right to
stockholders owning 3% of the capital
stock of the company. Gray does not
own the required shares.
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.
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
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
removed from that state

being

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. Exceptions to the Rule


of Incorporation Test
a. Constitutional and
Statutory Restrictions
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.

b.
c.

regulates exploration, development


and utilization of natural resources
such that only 60% Filipino-owned
corps may be allowed to engage in
these activities
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%)

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.
HELD: SJP is not covered by the Parity
Agreement.
It
is
not
owned
or
controlled directly by US citizens. It is

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

Filipinas

Compania case was decided


that way because of the government
interest involved.

owned by another Panamanian


Oil Investments. Oil

corp.,

Daimler
Rubber

Co. Continental Tire and


Co.:
HELD:
An
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.

Art. 51,
CC

3. Domicile or
Residence of
Foreign
Corporations

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.

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.

Requirements for License: Secs. 125-128,


Corpo Code)
a. sworn application
b. copy of articles of
incorporation
c. designation of an agent
shall be recognized and will be allowed to
transact business in any state, which
gives its consent.

d.

e.

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
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

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

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

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


under Phil law.

of

action

recognized

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.

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.

6. Exceptions to
License Requirement
a. Isolated Transactions
This has been defined as one which is
occasional, incidental and casual, not of a
character to indicate a purpose to engage
in business. It does not constitute doing
business under the law.

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.

HELD: Plaintiff failed to allege capacity to


sue.

1. 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:
a. it registered its trademark with the
Phil. Patent Office or that it is an
assignee of the trademark, and
b. 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.
2. 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
of Transacting Business
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

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.
for breach of

ACCRS

sued

WL

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 or casual but is of
such nature as to indicate a purpose
to do other business in the State.
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 nonresident 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.
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.

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.
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.

Derivative
Jurisdiction
over
Corporations (parent-subsidiary)

Foreign

2 Important Issues
1. whether ownership by the parent
over
the subsidiarys
stock
is
enough to give jurisdiction over the
subsidiary
2. whether
the
activities
of
the
subsidiary in a state will give that
state jurisdiction over he parent
corporation
nd

Restatement 2 :
Jurisdiction over the parent will exist if
parent controls and dominates
subsidiary. In determining whether
separate corporate existence of

the
the
the
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.
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.
C. Partnerships
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.
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


personal law of the partnership?

by

the

1.
2.
3.

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

Domestic Corp.:
a) Can sue
b) Can be sued
Foreign Corps.
1) Doing Business
a. With license can sue and
be sued
b. Without license cannot
sue, can be sued
2) Not
Doing
Business
(isolated transaction) can sue and
be sued

PART FIVE: FOREIGN JUDGMENTS


XVIII: Recognition and Enforcement
of Foreign Judgments
A. Distinction between
Recognition and Enforcement
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

1) Comity
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


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

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.
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)
C. Policies Underlying Recognition
and Enforcement

1. Res judicata
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.
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.
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.

Rule 39 Sec 40:


A foreign
country,
judgment
title to

judgment of a tribunal of a foreign


having jurisdiction to pronounce
renders it conclusive upon the
the thing while a judgment

against a person is presumptive evidence


of a right as between the parties & their
successors in interest
2. Merger
It considers the plaintiffs cause of action
as merged in the judgment. Thus, he may
not relitigate that exact same claim.

3. 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
Collateral Estoppel

Res

Judicata

&

RES JUDICATA- seeks to end litigation by


disallowing suit on the same claim
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 quasijudicial
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
Philippine judgment

of

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.
Shar
p
(199
5)
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.
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 3rd
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.
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,


alleged that he obtained a

Nouvion

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, 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
judgment is as follows:

pronounce

the

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


judgments issued by foreign courts.

of

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
be recognized if-

need

not

1) The defendant in the proceedings


in foreign court did not receive
notice of

2)
3)

4)
5)

6)

the proceedings in sufficient


time to enable him to defend
The judgment was obtained by
fraud
The cause of action or claim for
relief on which
judgment is
based
is repugnant to public
policy of the state.
The foreign judgment conflicts
with another final & conclusive
judgment.
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
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
traditional
basis
for
exercise
jurisdiction has been eroded.

the
of

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 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
nonrecognition
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.
G. Procedure for Enforcement
The
Philippines
common
law
instantaneously
judgment.

has
adopted
the
practice
of
not
executing
foreign

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
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.

Procedure in other civil law countries

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 & 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.