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PRIVATE INTERNATIONAL LAW

Prof. Elizabeth Aguiling-Pangalangan • Second Semester, A.Y. 2014-2015

PART ONE: INTRODUCTION ....................................................................................................................................................................... 2


Chapter I: Scope of Conflict of Laws: Its Nature, Definition, and Importance ........................................................................................... 2
Chapter II: A Brief History and Development of Conflict of Laws ............................................................................................................... 4
Chapter III: Sources of Conflict of Laws ...................................................................................................................................................... 5

PART TWO: JURISDICTION AND CHOICE OF LAW.............................................................................................................................. 6


Chapter IV: Jurisdiction ................................................................................................................................................................................ 6
Chapter V: Choice of Law ........................................................................................................................................................................... 13
Chapter VI: The Problem of Characterization ............................................................................................................................................ 17
Chapter VII: The Problem of Renvoi ........................................................................................................................................................... 21
Chapter VIII: Notice and Proof of Foreign Law .......................................................................................................................................... 24

PART THREE: PERSONAL LAW................................................................................................................................................................ 30


Chapter IX: Nationality ................................................................................................................................................................................ 30
Chapter X: Domicile .................................................................................................................................................................................... 39
Chapter XI: Principles on Personal Status and Capacity .......................................................................................................................... 44

PART FOUR: CHOICE OF LAW PROBLEMS .......................................................................................................................................... 48


Chapter XII: Choice of Law in Family Relations ......................................................................................................................................... 48
Chapter XIII: Choice of Law in Property ..................................................................................................................................................... 58
Chapter XIV: Choice of Law in Contracts ................................................................................................................................................... 63
Chapter XV: Choice of Law in Wills, Succession and Administration of Estates .................................................................................... 72
Chapter XVI: Choice of Law in Torts and Crimes ...................................................................................................................................... 77
Chapter XVII: Choice of Law Affecting Corporations and Other Juridical Entities .................................................................................. 86

PART FIVE: FOREIGN JUDGMENTS ....................................................................................................................................................... 99


Chapter XVIII: Recognition and Enforcement of Foreign Judgments ...................................................................................................... 99

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PRIVATE INTERNATIONAL LAW
Prof. Elizabeth Aguiling-Pangalangan • Second Semester, A.Y. 2014-2015

PART ONE: INTRODUCTION • International conventions relating to mutual recognition of foreign


laws and judgments:
Chapter I o Sixth International Conference of American States on Private
International Law (1928);
SCOPE OF CONFLICT OF LAWS: ITS NATURE, DEFINITION, AND IMPORTANCE
o The Bustamante Code (by the International Commission of
Jurists);
A. DIVERSITY OF LAWS AND CUSTOMS
o Inter-American Council of Jurists (by the Organization of
• Increased number of independent and sovereign states – causes: American States);
o Decolonization; o Hague Convention on Private International Law (began in
o Dismemberment of existing states. 1951) – 34 conventions.
• Promulgation of laws and development of jurisprudence = exercise of • Conflict of laws affects not only judges but also administrative
sovereignty. agencies and public officers called upon to decide cases.
• Laws may be similar, but they may be applied/interpreted differently o Thus, many states have adopted a body of rules governing
because of: the recognition and enforcement of foreign judgments and
o Religion; decrees.
o Culture; • Principles of conflict of laws incorporated in municipal law; basis:
o Customs. o Not extraterritoriality, but
• Result of development in communication and transportation: o Comity of nations.
o More people enter into contracts with nationals of other
states. Hilton v. Guyot
! Entered into in one state, but take effect in another,
hence, governed by different laws. Guyot obtained a favorable judgment against Hilton from a French court.
! May also be tried and decided in yet another state. Hilton and his co-defendant were residents of New York doing business in
o Marriages and common law relationships among nationals of Paris. Guyot sought to have the French judgment enforced in the US. The
varying states. District Court ruled in favor of Guyot.
• Conflict of Laws or Private International Law (PrIL) addresses
problems caused by: HELD: The French judgment is not conclusive upon US courts. The general
o Division of the world into many territorial units; rule is that judgments have no extraterritorial effect. There is, however, a
o Imposition by each unit of its own set of laws; and recognized exception based on the principle of “comity of nations.” Comity is
o Occurrence of events that contain elements significant to neither an absolute obligation nor a matter of mere courtesy or goodwill.
more than one legal system. Rather, it is the recognition which one nation allows within its territory to the
• Formulation of uniform municipal laws legislative, executive or judicial acts of another nation, having due regard both
o Attempted by the ASEAN Law Association; scope: to international duty and convenience, and to the rights of its own citizens, or
! Persons of other persons who are under the protection of its laws. Nonetheless, the
! Property French judgment subject of this case cannot be enforced because of want of
! Contracts reciprocity.
o Problem: sovereignty and independence of states prevail.

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Dissent: The principle of res judicata is applicable even to foreign judgments. State-to-state;
The application of the rule does not rest upon discretion. Transactions government-to- Private transactions
government
B. DEFINITION Diplomatic protest;
• Classical: that part of municipal law which governs cases involving a arbitration or
Remedies available
foreign element. Remedies conciliation; filing before
under municipal law
• Minor: those universal principles of right and justice which govern the international tribunals;
courts of one state having before them cases involving the operation use of force; war
and effect of laws of another state or country. CONFLICT OF LAWS
MUNICIPAL LAW
• Chesire: that part of law which comes into play when the issue before RULES
the court affects some fact or event, or transaction that is so closely Not merely part of
connected with a foreign system of law as to necessitate recourse to domestic law because it
that system. involves a foreign
No foreign element is
• AmJur 2d: that part of the law of each state or nation which element upon which a
present
determines whether, in dealing with a legal situation, the law of some court or tribunal decides
other state or nation will be recognized, given effect, or applied. to apply a local law or a
• Hilton v. Guyot: the law concerning the rights of persons within the foreign law.
territory and dominion of one nation, by reason of acts, private or
public, done within the dominion of another nation. C. OBJECT, FUNCTION AND SCOPE
• To provide rational and valid rules/guidelines in deciding cases where
Distinguished From Public International Law and Other Disciplines either the parties, events or transactions are linked to more than one
jurisdiction.
PIL PRIL • To promote stability and uniformity of solutions provided by the laws
States and their and courts of each state called upon to decide conflicts cases.
Ratione personae and Individuals and their
relationships among
ratione materiae private transactions Article II, §2, 1987 Const. The Philippines x x x adopts the generally accepted
themselves
Generally, from the principles of international law as part of the law of the land and adheres to the
internal law of each policy of peace, equality, justice, freedom, cooperation, and amity with all
Art. 38, ICJ Statute nations.
state.
1. Custom
2. Treaty
Exception: any conflict • Three distinct but interrelated issues in conflict of laws:
3. General principles of
of laws question o Adjudicatory jurisdiction;
Sources of law law
governed by a treaty o Choice-of-law;
4. Judicial decisions,
(e.g. Hague Convention o Recognition and enforcement of foreign judgments.
teachings of the
on the Conflict of Laws
most highly
relating to the Form of
qualified publicists
Testamentary
Dispositions).
States and
internationally
Persons involved Individuals
recognized
organizations

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Chapter II o Voet: no statute can have extraterritorial application.
A BRIEF HISTORY AND DEVELOPMENT OF CONFLICT OF LAWS ! But a sovereign can make foreign law operative in its
territory, provided it does not prejudice the subjects
A. ROMAN LAW ORIGIN of the sovereign whose recognition is sought.
• Ius gentium • Ius commune – supranational law based on Roman law; became
o Law of nations continental European common law.
o Law that governs the relations of states • Codification of national laws resulted in the incorporation of conflict
o Early Roman Empire: body of rules developed by the praetor of laws provisions in the countries’ civil codes.
pregrinus to resolve disputes between foreigners and o Bavarian – theory of statutes.
citizens. o Prussian – theory of efficacy of contracts.
o Derived from Greek legal doctrines, including the concept of o French (basis of Spanish, Belgian and Romanian) –
bona fides. nationality law principle, now Art. 15, NCC.
th
• Ius civile • 19 Century:
o Applied only to Roman citizens. o Justice Story – the foundation of conflict of laws is the
• Rise of Italian City States principle of comity of nations.
o They all had their respective municipal laws " led to the o Prof. Joseph Beale – territorial “vested rights” school of
intensive study of conflict of laws. thought.
o Bartolus – “Father of Conflict of Laws” o Carl Von Savigny – basis is not comity but the resultant
! Formulated the “Theory of Statutes.” benefits for everyone concerned.
• Theory of Statutes ! Founder of modern PrIL.
o Since Italy was divided into several city states, there arose a ! Advocated the theory of situs (seat of the legal
problem of which law to apply in transactions between relationship) – every element of a transaction must
individuals of different city states. be governed by the law of the place with which said
o The “Statute” applied to questions of choice of law. element has the most substantive connection.
o Classifications: o Mancini – nationality theory (for matters concerning status,
! Real (statuta realia) – immovable property within the capacity and private interests of the individual).
state;
! Personal (statute personalia) – personal status, B. MODERN DEVELOPMENTS
capacity and movables; and • Neo-statutists – followed the Italian theory; when two or more laws
! Mixed (statute mixta) – contracts, depending on are applicable to a conflict of laws problem, the statute determines
where they were entered into by different nationals. what law shall prevail.
th
• 16 Century France • Internationalists – there should be a single body of rules that can
o Charles Dumoulin – developed a method to determine what solve problems involving a foreign element.
law would govern contracts between different nationals. • Territorialists – the law of the state applies to the persons and things
o Bertrand D’Argentre – formulated the principle of universal within the state. No foreign law should be applied.
succession. o Only rights vested or acquired under a foreign law are
th th recognized but not the law itself.
• 16 -17 Century Netherlands
o Dutch jurists: Burgundou, Rodenberg, Huber • 1969: Second Restatement of the Conflict of Laws (Reese)
o Huber was the first to use the term “conflict of laws.” o In the absence of statutory law, the law to applied is the law
! State is not obliged to apply a foreign law unless of the most significant relationship.
imposed by treaty, by comitas gentium (comity), or on • Cavers, Currie and Ehrenzweig – policy-centered approaches.
consideration of courtesy and expediency.

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Conflict of Laws in the Philippines • At present: more foreign transactions (both natural and juridical
• Hardly known or given much importance until the Philippines became persons)
a sovereign state. o Specific areas – transactions of foreign corporations and
• Spanish Civil Code: contained conflict of laws provisions adopted international air transport (Warsaw Convention).
from the Code Napoleon of 1804. o Torts claims – relating to OFWs.
• New Civil Code:
o Art. 15 (nationality principle) Chapter III
SOURCES OF CONFLICT OF LAWS
Laws relating to family rights and duties, or to the status,
condition and legal capacity of persons are binding upon A. CODES AND STATUTES
citizens of the Philippines, even though living abroad. (9a) • Originated in continental Europe where most laws were codified.
o Primary sources of the law – civil codes of the different
o Art. 16, par. 1 (lex situs rule) – adopted from Art. 10, Spanish countries.
Civil Code. ! Roman codes – ius gentium
! Code Napoleon of 1804 – personal law of the
Real property as well as personal property is subject to the individual
law of the country where it is situated. ! Dutch (1829), Romanian (1865), Italian (1865),
Portuguese (1867) and Spanish (1888) Codes
o Art. 16, par. 2 (universal succession) followed suit.
! German Code (1896) – contained provisions on
However, intestate and testamentary successions, both with Conflict of Laws.
respect to the order of succession and to the amount of ! Others: Greece, South America (Code of Bustamante)
successional rights and to the intrinsic validity of • Spanish Civil Code of 1888
testamentary provisions, shall be regulated by the national o Enforced in the Philippines on December 7, 1889 until NCC
law of the person whose succession is under consideration, took effect on August 30, 1950.
whatever may be the nature of the property and regardless of o Its provisions on Conflict of Laws were adopted in the NCC.
the country wherein said property may be found. (10a) • Code of Commerce of Spain – contained provisions on foreign
transactions which were enforced in the Philippines.
o Art. 17, par. 1 (lex loci contractus) – from Art. 11, Spanish • 1987 Constitution
Civil Code o Contains provisions on nationality and comity
• Special laws
The forms and solemnities of contracts, wills, and other
public instruments shall be governed by the laws of the B. TREATIES AND INTERNATIONAL CONVENTIONS
country in which they are executed.
C. TREATISES, COMMENTARIES AND STUDIES OF LEARNED SOCIETIES
• Introduction of PrIL in the Philippines: 1911, when UP Law started.
• Until the 1950s, foreign law books and US cases were studied. D. JUDICIAL DECISIONS
• PrIL became a required subject for the Bar Examinations. • Most important source of conflict of laws rules.
o It was merged with Civil Law, hence the impression that PrIL • PrIL is more completely judge-made than almost any other branch of
is part of Civil Law. " this mindview limits the perspective law.
and scope of analysis required for conflict of laws problems. • In the Philippines: judicial decisions undoubtedly form the main bulk
of source of conflict rules.

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PART TWO: JURISDICTION AND CHOICE OF LAW
Service in person on defendant. — Whenever practicable, the
summons shall be served handing a copy thereof to the
Chapter IV
defendant in person, or, if he refuses to receive and sign for it,
JURISDICTION
by tendering it to him. (7a)

• Two concepts of jurisdiction: o Substituted service under Rule 14, §7:


o Judicial – power or authority of a court to:
! Try a case;
Substituted service. — If, for justifiable causes, the defendant
! Render judgment; and
cannot be served within a reasonable time as provided in the
! Execute the judgment in accordance with law.
preceding section, service may be effected (a) by leaving
o Legislative – ability of a state to:
copies of the summons at the defendant’s residence with
! Promulgate laws; and
some person of suitable age and discretion then residing
! Enforce them on all persons and property within its
therein, or (b) by leaving the copies at defendant’s office or
territory.
regular place of business with some competent person in
• Four major questions to be considered in resolving a PrIL question: charge thereof. (8a)
1. Has the court jurisdiction over the person of the defendant or
his property?
Gemperle v. Schenker
2. Has the court jurisdiction over the subject matter
(“competency”)?
Mr. Schenker (Swiss citizen and resident) filed a case against Gemperle to
3. Has the suit been brought in the proper venue in cases where
enforce a subscription contract and to exercise his preemptive right with
a foreign element is involved?
regard to his shares in the Philippine-Swiss Trading Co. He was represented
4. Is there a statute or doctrine under which a court qualified to
by his wife and attorney-in-fact, Mrs. Schenker. Gemperle, in turn, filed a
try the case may or may not refuse to entertain it?
complaint for damages. Summons was served upon Mrs. Schenker in the
Philippines. The CFI dismissed the case for want of jurisdiction over the
A. BASIS OF EXERCISE OF JUDICIAL JURISDICTION
person of Mr. Schenker.
• Jurisdiction over the person – forum-defendant contacts
• Jurisdiction over the res – forum-property contacts HELD: The lower court acquired jurisdiction over the person of Mr. Schenker
• Jurisdiction over the subject matter through the service of summons on his wife. Mrs. Schenker had the authority
to sue, and she actually sued on behalf of her husband. Thus, she was also
1. JURISDICTION OVER THE PERSON empowered to represent him in suits filed against him, like the case at bar—
• How acquired: voluntary appearance of a party and his submission to this case being a consequence of the action brought by her on his behalf.
authority.
• Plaintiff: by the filing of a case in court. 2. JURISDICTION OVER THE PROPERTY
• Defendant: • How acquired:
o Entry of appearance – tantamount to consent unless he o Seizure of the property under legal process;
appears for the purpose of contesting the court’s jurisdiction. ! Attachment
o Service of process o Institution of legal proceedings wherein the court’s power
o Counterclaim against non-resident plaintiff – as long as it over the property is recognized and made effective.
arises out of the original cause of action. ! Land registration
• Service of summons: • In rem jurisdiction – the situs could “bind the world” and not just the
o Personal service under Rule 14, §6: interest of specific persons.

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o Basis: physical presence of the property within the territorial International Shoe Co. v. Washington
jurisdiction of the forum.
• In personam jurisdiction – binds the interest of specific persons. International Shoe is a Delaware corporation with principal place of business
• Quasi in rem jurisdiction – based on the physical presence of the in Missouri. It employed Washington residents to work as salesmen. Their
property within the territorial jurisdiction of the forum, BUT affects authority was limited to exhibiting samples and soliciting orders—they had no
only particular persons. power to enter into contracts or to make collections. The State of Washington
o Quieting of title – court may declare one claimant’s title to be sued International Shoe for unpaid contributions to the state unemployment
superior than the others. compensation fund. Service of summons was made upon one of the sale
• Service of summons by publication (for in rem and quasi in rem): solicitors and notices sent to the Missouri office.

Extraterritorial service. — When the defendant does not reside and is HELD: International Shoe is liable. Due process requires only that in order to
not found in the Philippines, and the action affects the personal subject a defendant to a judgment in personam, if he be not present within
status of the plaintiff or relates to, or the subject of which is, property the territory of the forum, he have certain minimum contacts with it such that
within the Philippines, in which the defendant has or claims a lien or the maintenance of the suit does not offend “traditional notions of fair play
interest, actual or contingent; or in which the relief demanded and substantial justice.” A corporation is deemed to be “present” where its
consists, wholly or in part, in excluding the defendant from any activities (1) have been continuous and systematic, and (2) give rise to the
interest therein, or the property of the defendant has been attached liability sued upon. The activities of appellant’s salesmen in Washington
within the Philippines, service may, by leave of court, be effected out constitute minimum contacts to justify the exercise of jurisdiction over its
of the Philippines by personal service as under section 6; or by person.
publication in a newspaper of general circulation in such places and
for such time as the court may order, in which case a copy of the Mullane v. Central Hanover Bank & Trust Co.
summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the The Bank established a common trust fund. It petitioned the court for the first
court may deem sufficient. Any order granting such leave shall settlement of its accounts. The only notice given to beneficiaries was by
specify a reasonable time, which shall not be less than sixty (60) days publication in the newspaper. Mullane, the beneficiaries’ guardian, objected to
after notice, within which the defendant must answer. (17a) the settlement of the accounts because notice of publication was inadequate
to afford due process.
Pennoyer v. Neff
HELD: Court has no jurisdiction over the persons of non-residents notified by
Mitchell, an Oregon attorney, filed suit against Neff in Oregon for the payment publication. Personal service of written notice within the jurisdiction is the
of $300 in attorney’s fees. Neff, a California resident, had been served by classic form of notice always adequate in any type of proceeding. However,
publication in an Oregon newspaper. The trial court ruled in favor of Mitchell. this is not always practicable, thus, other modes of service may be resorted
Later, Neff’s property in Oregon was sold at public auction to Pennoyer. Neff to. The test is whether the chosen method is, in itself, reasonably certain to
sued Pennoyer to recover the property contending that the sale was void inform those affected; or, where conditions do not reasonably permit such
since the Oregon court never acquired jurisdiction over his person. notice, that the form chosen is not substantially less likely to bring home
notice than other of the feasible and customary substitutes. Publication alone
HELD: The Oregon court had no jurisdiction over the person of Neff. Service of is not a reliable means of informing interested parties that their rights are
summons by publication is appropriate only in cases where the action is one before the courts. In this case, the trustee had knowledge of the beneficiaries’
in rem. But where the action is one in personam, constructive service in this names and addresses. Notice could have been sent, at the very least, by
form upon a non-resident is ineffectual for any purpose. ordinary mail.

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Shaffer v. Heitner ! Where a defendant does business in a state, it can be
sued in that forum even on a claim not arising from
Heitner filed a derivative suit against Greyhound Corp. (Delaware corporation), its business activities.
its subsidiary, and 28 directors of one or both corporations before a Delaware ! If a corporation establishes its presence in a state
court. The court ordered the sequestration of shares of stock in Greyhound through the acts of its authorized agents, the
which were not physically located in Delaware. Defendants were notified of corporation is deemed to have consented to service
the proceedings by publication and mail. 21 of the defendants claimed that and suit.
the court had no jurisdiction as they did not maintain sufficient contacts in o Mullane established the standard for adequate notice—the
the state of Delaware so as to dispense with personal service. manner in which notice is given should reasonably result in
informing the affected party.
HELD: The contacts between defendants and Delaware are insufficient to ! When conditions do not allow such notice, the form
justify the exercise of jurisdiction. Assertion of jurisdiction was based solely chosen should not substantially be “less likely to
on the statutory presence of defendants’ property within the state. However, bring home notice other than of feasible and
such property is not the subject matter of the litigation, nor is the underlying customary substitutes.”
cause of action related to such property. Heitner alleges that defendants’ o Shaffer clarified that the minimum contacts and fundamental
positions as corporate directors and officers of Greyhound constitute fairness test should be satisfied regardless of whether the
minimum contacts. He claims that Delaware has a strong interest in proceedings are in rem, quasi in rem or in personam.
supervising the management of a Delaware corporation. This argument is o Distinction between International Shoe and Shaffer:
undercut by the failure of the Delaware Legislature to assert the state interest ! International Shoe requires minimum contacts
appellee finds so compelling. Delaware has not enacted a statute treating between the defendant and the forum.
acceptance of a directorship as consent to jurisdiction in the state. ! Shaffer demands that it exists among the forum, the
defendant and the cause of action.
• Traditional basis for exercise of judicial jurisdiction: the state’s • It is doubtful whether jurisdiction can be
physical power over persons and property within its territory (theory sustained in cases where the cause of action
of territorial power). arises business activities which took place
o In personam jurisdiction over a person physically served with outside the forum.
summons while physically present in the state; and • The change in conceptual foundation does not affect suits in rem
o In rem jurisdiction over property situated within the state where the property itself is the subject of the controversy.
regardless of whether it could exercise jurisdiction over the o Physical presence in the forum state provides the necessary
persons whose interest would be affected by the decision. minimum contacts.
• The Philippines still recognizes these distinctions, thus, Pennoyer v. o State’s court is a fair forum because the parties could very
Neff remains good law. well foresee that the court would exercise jurisdiction based
• In the US, there has been a shift to considerations of minimum on situs of the property.
contacts and fundamental fairness.
o International Shoe Co.: “Due process requires…that a Long-Arm Statutes
defendant…have certain minimum contacts such that the • Specify the kinds of contacts upon which jurisdiction will be asserted,
maintenance of the suit does not affect traditional notions of such as:
fair play and substantial justice.” o Commission of a tortious act within the state;
o Requirement of forum-transaction contacts that will make it o Celebration of a contract there; or
fair for a defendant to defend a suit in the forum regardless of o Presence of property owned by the defendant.
his non-resident status. • If these or other minimum contacts exist, the court can exercise
jurisdiction because the state has a justified interest in providing the

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plaintiff with a forum, and no fundamental unfairness results in B. WAYS OF DEALING WITH A CONFLICTS PROBLEM
subjecting the defendant to a suit there. • The court may either:
• Some long-arm statutes broadly authorize courts to assert o Dismiss the case for lack of jurisdiction or on the ground of
jurisdiction in any case not inconsistent with the Constitution, to be forum non conveniens; or
decided on a case-to-case basis. o Assume jurisdiction and apply either:
! Forum law; or
3. JURISDICTION OVER THE SUBJECT MATTER ! Foreign law.
• Determined by the Constitution, the Judiciary Act, and BP 129 among
others. 1. DISMISS THE CASE
• Cases are allocated among the courts according to the nature of the
controversy. Doctrine of forum non conveniens
• Subject matter jurisdiction is more than the general power conferred • Court may decline to assert jurisdiction on the ground that the
by law to take cognizance of cases of a general class to which the controversy may be more suitably tried elsewhere.
case belongs. • Literally means that “the forum is inconvenient.”
o The power of the court must be properly invoked by the filing • Origin is vague:
of a petition. o Not Roman Law or continental practice
• Jurisdiction cannot be conferred by the consent of the parties. o First used in the 1800s when Scottish courts would refuse to
• A decision is void and may be set aside either directly or collaterally hear cases on the ground that “the ends of justice would best
where the court exceeds its jurisdiction and power in rendering it. be served by trial in another forum.”
• American courts:
Idonah Perkins v. Roxas o Applied it in order to prevent abuse of the court’s process.
Benguet consolidated mining corp ! When plaintiff deliberately chooses the forum to
Eugene Perkins filed suit against BCMC praying that he be declared the owner make the defendant incur unnecessary expenses and
of certain shares of stock in that corporation. The CFI ordered amendment of hardship; or
the complaint after BCMC raised an adverse claim over the same shares of ! When non-resident plaintiff chose the forum because
stock as a defense. The adverse claimant, petitioner Idonah Perkins, claimed he felt that jury verdicts were larger than in other fora.
that the CFI is without jurisdiction to adjudicate the dispute in view of a o Refused to assert jurisdiction when such would be
judgment previously rendered by the New York Supreme Court declaring her burdensome on the court or taxpayers.
the owner of the shares of stock in BCMC. o Other reasons:
! Severe backlog of cases
HELD: The CFI has jurisdiction. Jurisdiction over the subject matter depends ! Jury duty where a community has no link or interest
on the nature of the cause of the action and of the relief sought. It is in the litigation
conferred by the sovereign authority which organizes the court and is sought ! Local machinery was inadequate to effectuate a right
for in general nature of its powers, or in authority specially conferred. • No way to secure evidence or attendance of
Respondent’s action calls for the adjudication of title to certain shares of willing witnesses
stock of BCMC and the granting of affirmative reliefs—this is within the • Union Carbide case: US CA sustained NY district court’s dismissal of
jurisdiction of the CFI of Manila. On the claim that the NY judgment a suit on the ground of forum non conveniens.
constitutes res judicata on all the questions constituting the subject matter of o Residents of Bhopal, India filed a suit for damages in a NY
the civil case: This is a matter that goes into the merits of the controversy and court.
relates to the rights of the parties as between one another, and not to the o Chemical plant accident
jurisdiction of the court. • English and Scottish courts:

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o When there was another available and more appropriate the insurers, whose offices are 3,000 miles away. The exercise of jurisdiction
forum in which the ends of justice would be better served; is a matter of discretion, and the courts may choose to decline to entertain
o Eliminating the vexatious or oppressive character of the jurisdiction of causes of action arising in a foreign jurisdiction, where both
pending proceedings; and parties are nonresidents of the forum.
o Removing any unfairness to either party which would result
from trial in the forum seized of the case. EAP: How do you prove that the forum is convenient? Establish that—
• Global forum shopping – occurs where there is filing of repetitious 1. It is an adequate alternative forum; and
suits in courts of different jurisdictions, two or more courts having 2. Legal processes can be served.
jurisdiction over the case.
o Litigants then execute the judgment most favorable to them. In Re: Union Carbide
o Result: conflicting decisions; antithetical to the orderly and
fair administration of justice. This case concerns the Bhopal Leak Disaster. The plant involved was owned
• First Philippine International Bank v. CA: by Union Carbide India Limited (UCIL). Class action suits were brought before
o Forum shopping originally a PrIL concept. the District Court of New York. UCIL’s parent company, UCC, filed a motion to
o Litigants have the option to choose the forum for various dismiss on the ground of forum non conveniens. The court granted the
reasons or excuses, such as: motion subject to four conditions:
! Procedural advantages; 1. UCC consents to the jurisdiction of Indian courts;
! To annoy and harass the defendant; 2. UCC agrees to waive the defense of prescription;
! To avoid overcrowded dockets; or 3. UCC agrees to satisfy the Indian court judgment; and
! To select a more friendly venue. 4. UCC subjects itself to discovery measures.
o Forum non conveniens – principle whereby a court, in conflict
of laws cases, may refuse impositions on its jurisdiction HELD: The dismissal of the cases was proper. All but a few of the 200,000
where it is not the most “convenient” or available forum and plaintiffs are Indian citizens and residents. While UCC itself is domiciled in the
the parties are not precluded from seeking remedies US, a great majority of the crucial evidence to be presented in this case is
elsewhere. located in India. These include documents (plans, designs, safety
• Wing On Company v. Syyap: plaintiff’s choice of forum should not be precautions, etc.) and witnesses.
disturbed “unless the balance is strongly in favor of the defendant.”
As to the conditions imposed on the dismissal:
Heine v. New York Insurance Company • Consent to jurisdiction and waiver of statute of limitations – Not
unusual.
Defendant insurance companies were incorporated in NY, doing business in • Consent to enforceability of Indian judgment – UCC claims that the
Germany. Cases were filed against them to recover on some 240 life NY court should retain “jurisdiction” over the case even if it is already
insurance policies made and issued in Germany, in favor of German citizens, before an Indian court to see to it that due process requirements are
and payable in German currency. The cases were filed in Portland, Oregon, complied with.
where defendants maintained statutory agents. o This violates basic jurisdictional principles. After a court
authorizes a dismissal based on forum non conveniens, it
HELD: The cases should be dismissed on the ground of forum non ceases to have any further jurisdiction on the matter.
conveniens. None of the claimants are residents of Portland. The courts of • Consent to discovery under the Federal Rules of Civil Procedure –
Germany and New York are open and functioning and competent to take Erroneous because matters of procedure are governed by forum law.
jurisdiction of the controversies, and service can be made upon the
defendants in either of such jurisdictions. If the suit were to be maintained in EAP: Why were the cases brought in NY in the first place? US courts are more
Portland, it would entail great and unnecessary inconvenience and expense to generous when it comes to awarding damages.

Ish Guidote Page 10 of 107


Wing On Company v. Syyap Bank of America v. Court of Appeals

Syyap, a domestic corporation, bought items of clothing from Wing On, a NY The Litonjuas obtained several loans from BOA. They purchased four vessels
company not authorized to do business in the Philippines. Syyap failed to pay with the proceeds of the loans, but such vessels were registered in the name
Wing On the full amount due under the contract. Hence, Wing On filed a of BOA as trustee. The Litonjuas sued BOA for accounting and damages. BOA
collection case against Syyap before the CFI. The trial court ruled in favor of filed a motion to dismiss on the ground of forum non conveniens, but it was
Wing On. Syyap now contends that the case should have been dismissed on denied by the RTC.
the ground of forum non conveniens.
HELD: Denial of the MTD was proper. The doctrine of forum non conveniens
HELD: Dismissal is not warranted. GENERAL RULE: The plaintiff’s choice of emerged in PrIL to deter the practice of global forum shopping, that is, to
furm should not be disturbed. EXCEPTION: When the balance is strongly in prevent non­resident litigants from choosing the forum or place wherein to
favor of the defendant. In determining whether the forum is inconvenient, the bring their suit for malicious reasons, such as to secure procedural
possibility of enforcing judgment must be considered. In the case at bar, advantages, to annoy and harass the defendant, to avoid overcrowded
dismissal of Wing On’s complaint could prove problematic since defendant is dockets, or to select a more friendly venue. Whether a suit should be
a resident of the Philippines. entertained or dismissed depends on the facts of the case and is addressed
to the sound discretion of the trial court. Furthermore, forum non conveniens
• No existing catalogue of circumstances that will justify sustaining a not being among the grounds for dismissal in Rule 16, §1 of the ROC, it is
plea of forum non conveniens. more properly a matter of defense to be raised at trial.
o Public and private interests should be weighed.
• Factors relevant to private interest: REQUISITES FOR ASSUMPTION OF JURISDICTION:
o Ease of access to source of proof; 1. The PH court is one to which the parties may conveniently resort to;
o Availability of compulsory process for attendance of unwilling 2. The PH court is in a position to make an intelligent decision as to the
witnesses; law and the facts; and
o Cost of obtaining attendant of willing witnesses; 3. The PH court has or is likely to have power to enforce its decision.
o Possibility of viewing the premises; and
o All other practical problems that make trial easy, expeditious Raytheon International, Inc. v. Rouzie, Jr.
and inexpensive.
• Factors relevant to public interest: After failing to obtain relief through a labor case, Rouzie filed a civil case for
o Administrative difficulties encountered (congested courts); damages against Raytheon concerning a service contract entered into for the
o Jury duty as a burden imposed upon the community; dredging of rivers affected by the Mt. Pinatubo eruption. Raytheon, a resident
o Appropriateness of having the trial in a court that is familiar foreign corporation, moved to dismiss on the ground of forum non
with the applicable state law. conveniens. It claimed that there was a valid choice-of-law clause in the
• Forum court may NOT resist imposition upon its jurisdiction where: service contract such that the laws of Connecticut would be applicable. The
o The forum is the only state where jurisdiction can be obtained RTC denied the MTD. CA affirmed.
over the defendant; and
o Some relation with the parties exists; or HELD: Denial of the MTD was proper. A choice-of-law clause does not
o When the forum provides procedural remedies not available preclude the exercise of jurisdiction by Philippine courts. Jurisdiction
in another state. considers whether it is fair to cause a defendant to travel to this state, while
choice-of-law asks the further questions whether the application of a
substantive law which will determine the merits of the case is fair to both
parties.

Ish Guidote Page 11 of 107


2. ASSUME JURISDICTION Fleumer v. Hix
• If the court assumes jurisdiction, it may apply forum law or foreign
law. Edward Hix’s purported will was denied probate by the CFI. Fleumer, special
• When internal law may be applied: administrator of his estate, alleged that Hix having executed the will in West
o Specific law of the forum decrees that internal law should Virginia, the laws of that state should apply. Fleumer submitted an excerpt of
apply; the West Virginia law as certified by the National Library [of the Philippines].
o Proper foreign law not properly pleaded or proved;
o Case falls under exceptions to the application of foreign law. HELD: Foreign law was not properly pleaded and proved. Since our courts are
not authorized to take judicial notice of such laws, they must be proved as
Forum law decrees application of internal law facts. §300 of the Code of Civil Procedure requires proof that the document
• Civil Code: was printed or published under the authority of the State of West Virginia. Nor
o Art. 16 – real and personal property subject to the law of the was the extract attested by the certificate of the officer having charge of the
place they are situated. original, under the seal of the State of West Virginia, as provided in §301.
o Testamentary and intestate succession – lex nationale of the Finally, no evidence was introduced to show that the extract from the laws of
decedent. West Virginia was in force at the time the alleged will was executed.
o Revocation of will (Art. 829) – law of the place where the will
was made (lex domicilii). Philippine Trust Co. v. Bohanan
o Prohibition against joint wills (Art. 819).
The court previously admitted to probate a will of the deceased Bohanan, a
Foreign law was not properly pleaded and proved citizen of Nevada. During one of the hearings on the proposed project of
• Courts may not take judicial cognizance of any foreign law. partition, Bohanan’s widow and children challenged the validity of the will on
• Failure to plead and prove foreign law leads to the presumption that it the ground of preterition. Nevada law gives the testator complete freedom to
is the same as forum law. dispose of all his properties by will. Such law was not produced before the
• Rule 132, §25 court in the proceedings relating to partition, but was earlier presented on two
• Rule 130, §45 occasions.

EAP: Why are courts prohibited from taking judicial notice of foreign laws? No HELD: The court may take judicial notice of the law of Nevada. PTC as
duty is imposed upon them to know such laws. Ignorantia legis non excusat executor of the will already presented it during the probate proceedings,
(NCC3) applies only to Philippine laws. where Bohanan’s widow and children were present. They did not contest the
pvosisions of the law.
§24, Rule 132, Rules of Court. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19, when admissible for any EAP: When can the court apply foreign law?
purpose, may be evidenced by an official publication thereof or by a copy 1. When there is no law saying that forum law should apply; AND
attested by the officer having the legal custody of the record, or by his deputy, 2. Foreign law is properly pleaded and proved.
and accompanied, if the record is not kept in the Philippines, with a certificate
that such officer has the custody. If the office in which the record is kept is in Foreign law cannot be applied
a foreign country, the certificate may be made by a secretary of the embassy 1. When the foreign law is contrary to an important public policy of the
or legation, consul general, consul, vice consul, or consular agent or by any forum;
officer in the foreign service of the Philippines stationed in the foreign country 2. When the foreign law is penal in nature;
in which the record is kept, and authenticated by the seal of his office. (25a) 3. When the foreign law is procedural in nature;
4. When the foreign law is purely fiscal or administrative in nature;

Ish Guidote Page 12 of 107


5. When the application of the foreign law will work undeniable injustice o Simplicity;
to the citizens of the forum; o Convenience; and
6. When the case involves real or personal property situated in the o Uniformity.
forum; • Modern approach – those which relate to “reaching appropriate
7. When the application of the foreign law might endanger the vital results in particular cases” (Von Mehren and Trautman).
interest of the state; and
8. When the foreign law is contrary to good morals. 1. TRADITIONAL APPROACH

Chapter V Vested Rights Theory


CHOICE OF LAW • Choice of law rules:
o Are simple in form;
A. THE CORRELATION BETWEEN JURISDICTION AND CHOICE OF LAW o Are capable of easy administration;
• Relationship: o Would promote uniformity of result;
o First, the factors that will justify the forum court’s exercise of o Enhance predictability; and
judicial jurisdiction are the same ones that will determine o Discourage forum shopping.
WoN it is proper for the forum to apply its own internal law. • Beale locates source of choice of law rules in a normative system that
o Second, if the forum applies its internal law on account of its is not confined to the law of one specific state.
real interest in the case, then the outcome will be • Under this theory, an act done in a foreign jurisdiction gives rise to the
predetermined by the forum where the suit is brought. existence of a right if the laws of that state provide so.
! Practical effect: plaintiff will bring suit in a state • Forum – law of the place of occurrence of the “last act” necessary to
which has a real interest in applying its internal law. complete the cause of action.
o Third, since in practice the forum is more likely to apply o If the laws of the last state create no legal right, there is
internal law, the plaintiff will predictably bring his claim in a nothing for the forum to recognize and enforce.
state where the provisions of internal law are more favorable • The law of the state of the “last act” is considered the law applicable
to him. to all substantive issues of the case.
• Distinction:
o There are cases over which the forum may exercise Gray v. Gray
jurisdiction but will not apply its own law.
o There are cases over which the forum has no jurisdiction, The Grays were residents of New Hampshire. They met an accident while
although its internal law may be applied as the proper law. driving in Maine. Mrs. Gray sued her husband before a New Hampshire court.
In Maine, spouses cannot sue one another.
B. APPROACHES TO CHOICE OF LAW
• Two important questions: HELD: Mrs. Gray cannot maintain the suit against her husband. The lex loci
1. What legal system should control a case where some of the governs with respect to the legal effect and incidents of acts. Thus, any
significant facts occurred in two or more states? defense available to the parties in Maine is also available in New Hampshire.
2. To what extent should the chosen legal system regulate the Mrs. Gray argues Maine law merely prevents suits between spouses, and that
situation? it does not make the act complained of an innocent one. This is incorrect, as
• Theories should advance both notions of justice and predictability, the rule is actually broader. Under the laws of Maine, the act complained of
but they do not always do so. does not give rise to a cause of action. Local conduct should be governed by
o Problem arises as to which of these two values must be local law.
stressed.
• Traditional approach – those which emphasize:

Ish Guidote Page 13 of 107


Alabama Great Southern Railroad Co. v. Carroll 3. Protection of rights and interests is not the only
consideration to be taken into account.
Carroll was a resident of Alabama and an employee of petitioner. While in 4. Law protects not only vested rights, but also foreign legal
Mississipi, he met an accident due to the negligence of his fellow employee in relationships, capacities or powers out of which rights, or the
failing to spot a defective link between two freight cars. Carroll brought suit extinction of duties and charges or the invalidity of acts may
against the railroad company in Alabama. Mississipi law does not recognize arise.
liability of an employee to a “fellow servant.” 5. It is difficult and impracticable to apply the theory where the
material aspects of a transaction or event touch two or more
HELD: The suit may not be maintained in Alabama. There can be no recovery states equally.
in one state for injuries to a person sustained in another, unless the infliction • Criticism of Beale’s basis: despite being a positivist, he relied on his
of the injuries is actionable under the law of the state in which they were own a priori theories instead of on judicial decisions.
received. There is no authority in support of Carroll’s proposition that • This approach is rigid, but some courts still follow it because of the
Alabama is the state of the wrong because his co-employee’s negligence uncertainty of the policy-oriented approaches.
transpired there.
Local Law Theory
EAP: Why don’t we consider the law of the place where the employer- • Walter Wheeler Cook rejected “deduction from general principles as a
employee contract is entered into? Because the cause of action is based on means to ascertain positive law.”
tort. • Proposal: unearth rules by looking at the cases and other concrete
phenomena, including the behavior of judges.
• In Gray, even though Maine’s relation to the spouses was solely that it • Observations:
was the place where the accident occurred, the court automatically o First, the power of a state to regulate within its own territory
applied the law of the place of the wrong thereby rejecting a choice of has no limitation, except such as may be imposed by its own
law method based on “reason, justice and expediency.” positive law.
o Look at the rationale behind Maine law on spousal incapacity o Second, in conflict of laws problems, the court does not
to sue. What were the policy considerations? To prevent enforce a foreign right but a right created by its own law by
domestic controversy? If so, why should it be allowed in New treating a case as a purely domestic case that does not
Hampshire? involve a foreign element.
o Problems of family relations should be governed by the • Result: law applied may not be exactly as what a foreign court may
personal laws of the parties. have enforced.
• Main weakness of the vested rights theory: failure to resolve conflicts • Criticism: practical and equitable considerations may be overlooked
cases with reference to considerations of policy and fairness. in favor of an exercise of sovereignty.
• In Carroll, Mississippi law was applied at the expense of arriving at a
just result. Cavers’ Principles of Preference
o Strict application of the law of the place of the wrong was • Choice of law should be determined by considerations of justice and
counterintuitive and arbitrary. social expediency.
• Salonga: five major defects of the theory— o Not a result of the mechanical application of a rule or
1. It is not the foreign law but the rights acquired under it which principle of selection.
are enforced by the courts of another country – there is a • In determining whether to apply forum or foreign law, the court
self-delusion of reasoning. should:
2. Not all rights acquired under foreign law are protected 1. Scrutinize the event or transaction giving rise to the issue
elsewhere, nor is their protection always desirable. before it;

Ish Guidote Page 14 of 107


2. Compare carefully the proffered rule of law and the result o Contracts
which its application might work in the case at bar with the ! Law chosen by the parties and in the absence
rule of the forum; and thereof; nu
3. Appraise these results from the standpoint of justice between ! Place where the contract was entered into;
the litigants or of those broader considerations of social ! Place where it was negotiated;
policy which conflicting laws may evoke. ! Place of performance; and
• Using this framework, we can successfully set aside the stifling ! Domicile, residence, nationality, place of
effects of ensuring certainty and uniformity above all other incorporation and place of business of the parties.
objectives. o In both torts and contracts cases, contacts are evaluated
• Choice of law decisions should be made with reference to principles depending on their relative importance and relevance to the
of preference which are conceived to: issue at hand.
o Provide fair accommodation to conflicting state policies; and
o Afford fair treatment to the parties who are caught up in the Auten v. Auten
hazards between conflicting state policies.
• This theory shows a “territorialist bias”—looks to the place where The Autens were residents of England. In 1931, Mr. Auten left his wife and two
significant events occurred or where the legal relationship is children and moved to New York. Mrs. Auten later went to New York and
centered. there, the spouses executed a “Separation Agreement” which provided for
support, separation of bed and board, and an undertaking on the part of Mrs.
2. MODERN APPROACHES Auten not to file for legal separation. Mr. Auten failed to give support, thus,
Mrs. Auten filed two suits: legal separation in England and specific
Place of the Most Significant Relationship performance in New York. Applying New York law, the court in the latter case
• Reese: plurality of factors must be considered, not just where the last ruled in favor of Mr. Auten, as Mrs. Auten breached the Separation Agreement
act occurred. by filing a case for legal separation.
• Principles considered:
o Needs of the interstate and international system; HELD: It is English law which should be applied. Under the “Center of Gravity”
o Relevant policies of the concerned states; or the “Grouping of Contacts” Theory, instead of regarding as conclusive the
o Relevant policies of the other interested states and the parties’ intention or the place of making or performance, emphasis is placed
relative interest of those in the determination of the particular upon the law of the place “which has the most significant contacts with the
issue; matter in dispute.” Here, England has all the significant contacts. The
o Protection of the justified expectations of the parties; contract was entered into by two British subjects who were married in
o Basic policies underlying the particular field of law; England, had children there, and lived there as a family for 14 years. The wife
o Certainty, predictability and uniformity of result; and and children remained in England, and payment was to be made in English
o Ease in the determination and application of the law to be currency.
applied.
• Factual contacts of each state must be considered. Haag v. Barnes
• Contacts differed in each area of substantive law.
o Torts Barnes, an Illinois lawyer, had an illegitimate child with Haag, a New York
! Where the injury occurred; legal secretary. They entered into an agreement in Chicago providing for
! Where the negligent conduct occurred; support for the child. The agreement contained a choice-of-law clause in
! Domicile, residence or nationality of the parties; and favor of Illinois. Haag sued Barnes before a New York court. Under the laws of
! Place where the relationship between the parties is that state, only judicially-approved agreements between parents of
entered. illegitimate children may be enforced.

Ish Guidote Page 15 of 107


Babcock v. Johnson
HELD: Illinois law should apply. First, the parties clearly provided that Illinois
law governs. Second, the agreement was executed in Illinois (lex loci Babcock and the Johnsons were residents of New York. While on a weekend
contractus). Finally, Illinois is the jurisdiction which has the most significant trip to Ontario, Mr. Johnson lost control of the car and got into an accident.
contacts with the matter in dispute. Both parties are listed as residents of Babcock sustained injuries. She filed suit against Mr. Johnson in New York.
that state, defendant’s business is in Illinois, the child was born there, the Johnson moved to dismiss on the ground that Ontario law governs this case.
parties’ respective lawyers are licensed in Illinois, and all contributions for Such law does not allow a guest to recover damages from the driver unless
support are being made from Chicago. It cannot be gainsaid that the “center the latter is engaged in business as a common carrier.
of gravity” of this agreement is Illinois and that, absent compelling public
policy to the contrary, Illinois law should apply. HELD: New York law applies. New York has the most significant relationship
with the parties. They reside in the state and the vehicle involved was
• Interchangeable terms: garaged, licensed and insured in New York. On the other hand, the only
o State of the most significant relationship (Restatement 2d); connection with Ontario was that the accident occurred there. Ontario has no
o Center of gravity (Auten); real interest in having its own law applied, because the policy behind its guest
o Place which has the most significant contacts (ibid); statute is to prevent collusion among parties and fraud against insurers.
o Grouping of contacts (ibid).
• Auten did away with automatic application of: Dissent: Grouping of contacts is inapplicable to torts. New York law cannot be
o Law where the contract was made; and applied because that would be tantamount to giving it extraterritorial effect.
o Law of the location of the trustee to whom payments were to
be made. EAP: For issues related to standards of conduct, the applicable law is the law
• Instead, it considered all relevant contacts. of the place where the tortious conduct is committed.
• Curiously, in Haag, the center of gravity was the man’s home in
Chicago. • Babcock:
o Was the court consistent, or was there a manipulation of the o Application of NY law advances policy of such law, while
contacts? o Non-application of Ontario law did not impair that law’s
• Criticism of the “most significant relationship” approach: it can be policy.
manipulated to achieve virtually any result. • Ehrenzweig: rejected the interest analysis approach
o Conflicts cases are ordinarily concerned with private, not
Interest Analysis governmental interests.
• Prof. Currie attacked the Auten decision for its failure to provide any • Reese: method unworkable
standard to determine which contacts are significant. o Decision of each case done on an ad hoc basis because
• The interest analysis approach urged the resolution of choice-of-law courts will have to ascertain the purposes of each applicable
problems by looking at: local law rule.
o The policy behind the laws of the involved states; and • Difficulty: court must look into the purpose of a law in question before
o The interest each state had in applying its own law. deciding whether it should be applied.
• Factual contacts not sufficient—they must reflect a state policy which o Fear of armchair speculation of the policy of another state’s
would be advanced by application of the substantive state law. law.
• Then, the court determines whether both states had a real interest in o Not all laws reflect policy.
having their law applied. If yes, then there is a true conflict. o Some laws have no purpose other than to decide cases.
o If not, there is a false conflict—forum court applies ! Ex. Provisions on interpretation of documents
substantive law of the interested state.

Ish Guidote Page 16 of 107


Comparative Impairment ! Consider whether the law reflects an “emerging” or
• Offshoot of the interest analysis approach. “regressing” policy.
• Proposed by Baxter.
• Called for the subordination of the state objective which would be Choice-Influencing Considerations
least impaired. • Leflar proposed five:
• Courts are to weigh conflicting interests and apply the law of the 1. Predictability of results;
state whose interests would be impaired if its law were not followed. 2. Maintenance of interstate and international order;
o Look behind an apparent conflict to the precise issue and the 3. Simplification of the judicial task;
precise interest of each state. 4. Application of the better rule of law; and
5. Advancement of the forum’s governmental interests.
Functional Analysis • Contrasted with interest analysis—the latter applies a particular rule
• Developed by Trautman and Von Mehren. of substantive law in order to implement a policy reflected therein.
• Determine the “concerned jurisdiction” or interested state. • Courts will prefer rules of law as long as they make “good
• Look into general policies of the state: socioeconomic sense for the time the court speaks” and are sound in
o Beyond those reflected in substantive law; and view of present day conditions.
o To policies and values relating to effective and harmonious o No principled and objective standards to determine what law
intercourse between states. is superior.
! Reciprocity o In practice, courts have almost always considered its own law
! Advancement of multistate activity as the better law.
! Protecting justifiable expectations
! Evenhandedness in dealing with similar cases Chapter VI
! Effectiveness THE PROBLEM OF CHARACTERIZATION
• Policy-weighing – consider the relative strength of a state policy.
• Milliken v. Pratt A. CHARACTERIZATION AND THE SINGLE-ASPECT METHOD
o Daniel Pratt was a resident of MA, under the law of which a • Single-aspect method – when choice-of-law theories focus on one
spouse cannot be the surety of the other spouse. element of a situation in order to connect the case to a particular
o Sarah, his wife, applied for credit from Milliken & Co. in Maine. legal community.
Milliken insisted on a guaranty from Daniel. o Example: issue related to a contract is referred to the place
! Guaranty executed. where it was executed, or torts cases are assigned to where
o Upon default, Milliken sued Daniel on the guaranty in Maine. the torts took place.
o HELD: Daniel is liable. o Goal: simplicity, uniformity and convenience of results.
! Contract was complete when Milliken received • Multi-aspect method – modern approach where all important factors,
Daniel’s guaranty. both territorial and non-territorial, are analyzed.
! Milliken extended credit on the strength of this o Applicable law arrived at by “rationally elaborating and
guaranty. applying the policies and purposes underlying the particular
! Place of contracting was Maine. legal rules that come in question as well as the needs of
o Analysis: interstate or international intercourse.”
! Restrictive policy on the right of married women was o Goal: to reach a just resolution of the case at hand.
on the wane in MA. • The Philippines follows the single-aspect method, thus the Civil Code
! Rule in force at the time was not based on a “strongly provides:
held policy.”
Article 15. Laws relating to family rights and duties, or to the status,

Ish Guidote Page 17 of 107


condition and legal capacity of persons are binding upon citizens of • In subject-matter characterization, the court classifies the factual
the Philippines, even though living abroad. (9a) situation into a legal category.
o Relevant to the single-aspect method because the legal
Article 16. Real property as well as personal property is subject to the category to which the issue belongs determines the
law of the country where it is situated. applicable law.

However, intestate and testamentary successions, both with respect Gibbs v. Government of the Philippine Islands
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be Eva Johnson and Allison Gibbs were spouses and citizens of California. They
regulated by the national law of the person whose succession is owned three parcels of land in Manila. Upon Eva’s death, Allison petitioned to
under consideration, whatever may be the nature of the property and be declared the sole owner of the three lots citing the California Civil Code.
regardless of the country wherein said property may be found. (10a) The Register of Deeds refused to issue a certificate of title in his name
invoking the Revised Administrative Code which requires the payment of
Article 17. The forms and solemnities of contracts, wills, and other inheritance tax.
public instruments shall be governed by the laws of the country in
which they are executed. HELD: The inheritance tax must first be paid. Under Art. 10 of the Old Civil
Code, real property is governed by the country in which it is situated (lex rei
When the acts referred to are executed before the diplomatic or sitae). Following Philippine law, the property is conjugal in nature. Upon Eva’s
consular officials of the Republic of the Philippines in a foreign death, her half was transmitted to her heirs by virtue of inheritance. This
country, the solemnities established by Philippine laws shall be transmission plainly falls within the language of the Revised Administrative
observed in their execution. Code.

Prohibitive laws concerning persons, their acts or property, and those EAP: This case was characterized as one of property instead of succession.
which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments • Court never specifically mentioned the problem of characterization,
promulgated, or by determinations or conventions agreed upon in a but it had to make a determination whether the issue was one
foreign country. (11a) involving real property which would be governed by lex rei sitae, or
succession, which would be governed by the national law of the
• The provisions specify the geographical location from where the decedent.
governing law is found. • Problems confronting characterization:
• Difficulty in following them is in the inherent rigidity and unjust o Filipino child adopted in the PH by a former Filipino who
decisions that may result from their application. moved to the US. Adopter dies. What law governs the child’s
o Solution: resort to “characterization” and renvoi. capacity to succeed intestate?
! If it is an adoption issue, governing law is PH law
1. SUBJECT-MATTER CHARACTERIZATION because that is where the adoption decree was
• Characterization – the process by which a court at the beginning of granted.
the choice-of-law process assigns a disputed question to an area of ! If it is a succession issue, the decedent’s national law
substantive law, such as torts, contracts, family law or property. is controlling.
o Process that forms part of legal analysis. o Agent acting abroad on behalf of principal commits a
o Characterization becomes a problem because there are at negligent act.
least two jurisdictions with divergent laws involved. ! If it is an agency issue, liability determined by laws of
the place where the contract was entered into.

Ish Guidote Page 18 of 107


! If it is a tort issue, where the tort took place. • Reaction to Grant was, on the whole, negative.
o Greatly influenced by sympathy factors.
2. SUBSTANCE-PROCEDURE DICHOTOMY o Another view is that it was the correct result arrived at using
• Directs the court to the extent that it will apply foreign law. a dubious method.
o Substantive – may apply foreign law. o Currie:
o Procedural – supposed to apply forum law. ! Different characterization produced the result that
• Rationale: had previously been recognized as the sound one.
o Rights and duties of parties should not be substantially ! It is a far from ideal way of dealing with such
varied because of the forum in which an action is brought to situations.
settle disputed questions arising out of the situation. ! Courts should state explicitly the considerations that
o International commerce would not develop if parties are led them to determine what the result should be, and
frequently exposed to the hazards of unknown requirements indicate how these considerations will be appraised
of foreign laws. in other cases.
o Reference to foreign law is appropriate to protect parties • Procedural laws are governed by forum law because the court should
against a substantial change of position because of the not be burdened with the study of uncommon peculiarities and
fortuitous circumstance that suit is brought in that particular refinements of another legal system.
state. o But sometimes procedure and substance are so closely
o Theoretically: foreign law would govern both the existence of related that a refusal to accept a foreign rule will defeat the
the rights and duties of the parties as well as the means of policy involved in the foreign substantive law.
compulsion to enforce performance by the defeated party.
! Impossible in many instances. Heavy burden upon Statute of Frauds
the courts and delay in the orderly administration of • Considered substantive if the words of the law relate to forbidding the
justice. creation of an obligation.
o Thus, need to limit the scope of the reference to foreign law. • Considered procedural if it forbids the enforcement of the obligation.
! Administration of foreign law – usually, procedural
rules of the forum are applied. Article 1403. The following contracts are unenforceable, unless they
are ratified:
Grant v. McAuliffe
(1) Those entered into in the name of another person by one who has
Plaintiffs were injured when their vehicle collided with another driven by been given no authority or legal representation, or who has acted
Pullen. The accident took place in Arizona. After Pullen’s death, plaintiffs filed beyond his powers;
a claim against his estate, of which McAuliffe was the administrator. The
claim was filed in California. The court dismissed the case citing Arizona law (2) Those that do not comply with the Statute of Frauds as set forth in
which states that actions for tort do not survive the death of the tortfeasor. this number. In the following cases an agreement hereafter made
California law provides otherwise. shall be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
HELD: The case should be reinstated. The survival statutes are procedural in charged, or by his agent; evidence, therefore, of the agreement cannot
nature, hence, they are governed by forum law. Survival is not an essential be received without the writing, or a secondary evidence of its
part of the cause of action itself but relates to the procedures available for the contents:
enforcement of the legal claim of damages. The question is one of the
administration of decedents’ estates, which is a purely local proceeding. (a) An agreement that by its terms is not to be performed
within a year from the making thereof;

Ish Guidote Page 19 of 107


o They provide a certain shorter period for certain kinds of
(b) A special promise to answer for the debt, default, or claims,
miscarriage of another; o That fall within a wider classification covered by a general
statute of limitations.
(c) An agreement made in consideration of marriage, other • To eliminate forum shopping, may states have passed borrowing
than a mutual promise to marry; statutes which bar the filing of a suit in the forum if it is already
barred by the statute of limitations in the place where the cause of
(d) An agreement for the sale of goods, chattels or things in action arose.
action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or Cadallin v. POEA Administrator
the evidences, or some of them, of such things in action or
pay at the time some part of the purchase money; but when a Cadallin, et al. were recruited by AIBC for employment with BRII, a Texas
sale is made by auction and entry is made by the auctioneer corporation. They were employed in Bahrain. Plaintiffs filed a class suit for
in his sales book, at the time of the sale, of the amount and money claims with the POEA. The claims were initially granted, but the NLRC
kind of property sold, terms of sale, price, names of the reversed holding that plaintiffs’ claims have already prescribed, citing Amiri
purchasers and person on whose account the sale is made, it Decree No. 23 (one-year prescriptive period).
is a sufficient memorandum;
HELD: The action has not prescribed. GENERAL RULE: Foreign procedural law
(e) An agreement for the leasing for a longer period than one will not be applied in the forum. This is true even if the action is based upon
year, or for the sale of real property or of an interest therein; foreign substantive law. EXCEPTION: A law on prescription of actions
is sui generis in Conflict of Laws in the sense that it may be viewed either as
(f) A representation as to the credit of a third person. procedural or substantive, depending on the characterization given such a
law. EXCEPTION TO THE EXCEPTION: Characterization becomes irrelevant
(3) Those where both parties are incapable of giving consent to a when the forum state has a borrowing statute, such as §48 of the Code of
contract. Civil Procedure. Such a statute directs the state of the forum to apply the
foreign statute of limitatins to the pending claims based on a foreign law. §48
• Marie v. Garrison: provides that “If by the laws of the state or country where the cause of action
o Garrison: rule affects the remedy upon a contract, hence a arose, the action is barred, it is also barred in the Philippine Islands.” Hence,
procedural law. the one-year prescriptive period under the Bahrain law applies. However, it
o Marie: rule affects the very existence of the contract, hence a cannot be enforced in view of the Constitutional policy affording full
substantive law. protection to labor.
o HELD: Substantive law. Law provides that the contract of sale
of any interest in land shall be VOID unless it was in writing. LWV Construction Corporation v. Dupo
! Compare to other laws which state “no action shall
be brought”—means it is unenforceable. Dupo was based in Saudi Arabia where he worked for MMG. His contract was
renewed 5 times. Upon his return to the Philippines he filed a complaint with
Statutes of Limitations and Borrowing Statutes the NLRC for payment of service award/longevity pay. LA granted the money
• Traditionally considered procedural because affected only the legal claims, affirmed by NLRC and CA. Petitioner claims that Dupo’s action has
remedy and not the substantial right involved. prescribed, invoking the one-year prescriptive period under the Saudi Labor
o Suit could still be brought in another jurisdiction with a longer Law.
statute of limitations.
• Certain statutes of limitations have been classified as substantive if: HELD: The action has not prescribed, following the doctrine in Cadallin.

Ish Guidote Page 20 of 107


B. DÉPEÇAGE spouses would be to foment family discord and strife. The policy reason for
• Dépeçage – from the French “depecer” meaning “to dissect” denying the capacity to sue more properly lies within the sphere of family law,
o Phenomenon where different aspects of a case involving a where domicile usually controls the law to be applied, than it does tort law,
foreign element may be governed by different systems of where the place of injury generally determines the substantive law which will
laws. govern. Thus, whenever courts are confronted with a conflict-of-laws
• Von Mehren & Trautman: man dies intestate, domiciled in A with problem as to which law governs the capacity of one spouse to sue the other
movables in B. in tort, the law to be applied is that of the state of domicile.
o A law: laws of the domicile determine how estate should be
divided. • Law of the place of the accident (California) governed the issue of
o B law: gives widow a share in the estate. negligence.
o If the question is WoN the woman claiming the widow’s share • Law of the domicile of the parties (Wisconsin) governed the issue of
is such a “wife,” it is a question for family law and not interspousal immunity.
succession. • Characterization was not limited to the case itself but to the
o Questions involving movable properties and successional individual issues arising from such case.
rights “embody the substance of the claim,” • 1969 Restatement 2d adopted dépeçage and set out the following
o Questions involving the validity of the marriage to the factors:
deceased “affects the solution because it answers a 1. Needs of interstate and international system;
preliminary or incidental question.” 2. Relevant policies of the forum;
• A single element of a case is made to relate to one legal system. 3. Relevant policies of other interested states and the relevant
o Technique allows relevant interests of the parties to be interests of those states in the determination of a particular
addressed. issue;
o Courts arrive at a functionally sound result. 4. Protection of the justified expectations of the parties;
5. Basic policies underlying the particular field of law;
EAP: 6. Certainty, predictability and uniformity of results; and
• Dépeçage is the result of issue-by-issue analysis. 7. Ease in the determination and application of the law to be
• Applying dépeçage to the situation in Babcock: applied.
o Capacity to sue – governed by New York law; • Consideration of these factors helps ease the restrictions of the
o Negligence – governed by Ontario law. single-aspect method.
• But is it even applicable? NO, because there was only one issue in o Application of which might lead to egregious results.
that case. • Cutting up the case into issues and applying pertinent laws thereto
allows the court to reach a decision that is fair and desirable.
Haumschild v. Continental Casualty • Explicit reference to dépeçage in case law is still uncommon.

Haumschild and Gleason were spouses and residents of Wisconsin. They Chapter VII
later got an annulment. Haumschild sustained injuries while riding in a motor THE PROBLEM OF RENVOI
truck driven by Gleason in California. She sued Gleason before a Wisconsin
court. Gleason moved for summary judgment, invoking California law which A. DEFINITION
provides for interspousal immunity. • Renvoi – a procedure whereby a jural matter presented is referred by
the conflict of laws rules of the forum to a foreign state, the conflict of
HELD: It is Wisconsin law, not California law, which applies. There are two laws rules of which, in turn, refer the matter to the law of:
rules for interspousal immunity. First is the ancient concept that husband and o The forum (remission); or
wife constitute one person in law, and second is that to permit suits between o A third state (transmission).

Ish Guidote Page 21 of 107


• Use of renvoi has not received worldwide acceptance. • What would have happened had the court rejected renvoi?
o In jurisdictions where it has been applied, used o The dispositions would have been upheld because California
domiciliary/national laws to decide problems of succession, law does not provide for legitime.
domestic relations and real property. o On the other hand, our Civil Code provides:
o US courts rarely look at conflicts rules of other states.
Instead, they look at the law which the foreign court would Article 887. The following are compulsory heirs:
apply if the case were a purely domestic one.
! UCC – “whole” law of a foreign state. (4) Acknowledged natural children, and natural children by
! Restatement 2d – also encourages use of renvoi. legal fiction;

B. VARIOUS WAYS OF DEALING WITH THE PROBLEM OF RENVOI Article 894. If the testator leaves illegitimate children, the
(GRISWOLD) surviving spouse shall be entitled to one-third of the
hereditary estate of the deceased and the illegitimate children
1. If the conflicts rules of the forum refer the case to a foreign state, it is to another third. The remaining third shall be at the free
deemed to mean only the “internal” law of that state. disposal of the testator. (n)
o Internal law – that which the state would apply to a purely
domestic case.

2. Court may accept the renvoi and refer not just to the foreign state’s NO RENVOI
“internal” law but to the “whole law,” including the choice-of-law rules
applicable in multi-state cases. F2
F1 SI NGLE RENVOI • Domestic/internal law
Aznar v. Garcia • Conflicts rule

The testator, Edward Christiansen, was a citizen of California but a resident of DOUBLE RENVOI
the Philippines. He died leaving behind two daughters, Helen and Lucy. Helen
was given P3,600 by way of legacy. During the proceedings for partition of
Edward’s estate, it was proposed that the remainder be given to Lucy. Helen 3. Desistance or mutual disclaimer of jurisdiction
opposed invoking impairment of her legitime under the provisions of the New o The forum court, upon reference to foreign law, sees that
Civil Code. The trial court approved the project of partition citing the decision such law only applies to its own nationals and has no
in In Re Kaufman—California law governs successional rights and intrinsic provision for application to a non-national.
validity, and provides for no legitimes. o Same result as acceptance of renvoi but with a different
approach—court desists applying foreign law.
HELD: Philippine law, not California law, is applicable as regards intrinsic
validity. California’s conflicts rule is embodied in Art. 946 of its Civil Code, 4. “Foreign court” Theory
which provides that the domiciliary law of the person is applicable. Since o If applied to Aznar, the PH court would assume the same
NCC16 refers the issue to national law, and that law in turn refers back to position as the US court would take had the case been
domiciliary law, the laws of the Philippines apply. The project of partition is litigated in the US.
therefore invalid. ! If US law is used by the US judge, then the PH judge
must also use US law, and vice versa.
EAP: In this case, the court accepted renvoi.

Ish Guidote Page 22 of 107


• Disadvantage of renvoi: If both courts follow it, there would be no end Chicago. Payment was to be made in Chicago. As the borrowers defaulted on
to the case. their obligation, plaintiff filed a collection suit in Michigan. Clara Price was
o “Revolving doors” relieved of liability on the ground that she, as a married woman, had no
o “Game of lawn tennis” capacity to contract under Michigan law.
o “Logical cabinet of mirrors”
o “Circulus inextracabilis” HELD: Clara Price is not liable. The general rule is that the validity, nature,
obligation and interpretation of contracts are governed by the law of the place
Annesley, Davidson v. Annesley of performance. In this case, that is Chicago. However, the conflicts rule of
Chicago, embodied in Burr v. Beckler, provides that the applicable law is the
The testatrix was a British subject residing in France. Under English law, she law of the place where the delivery of the note and trust deed is completed
was already a domiciliary of France, but under French law, she was not. Her (Michigan law). The court therefore accepts renvoi and applies Michigan law.
will (executed in France) disposed of all of her property in favor of her Under such law, married women cannot bind their separate estate through
daughter. It also provided that the testatrix had not abandoned her domicile in personal engagement for the benefit of others.
England. Under French law, only 1/3 of the estate could be disposed of law by
will. • The use of renvoi in this case protected the interest of a Michigan
wife.
HELD: At the time of her death, the testatrix was a resident of France. French • Promoted uniformity of results despite discrepancies in the choice-
municipal law provides that the applicable law in the distribution of a of-law rules in the involved states.
foreigner’s estate is the decedent’s national law. Thus, British law applies. • Applying renvoi meant that the case was decided according to
However, such law provides that what should be applied is the law of the Michigan law irrespective of the forum court while rejecting it would
domicile (French law). The court is now confronted with a situation where it have meant application of the Michigan law by the Illinois court and
can either (1) apply double renvoi (French law) or (2) accept renvoi (English Illinois law by the Michigan court.
law). Applying the foreign court theory, the court decided to use French
municipal law. Objections to Renvoi
• Places the court in a “perpetually-enclosed circle from which it could
• Court applied double renvoi here. never emerge.”
o Case was filed in England, whose conflicts rules referred the o Would never find a suitable body of substantive rules to apply
case to France. to a particular case.
o France’s conflict rules referred back to England. Single renvoi • Renvoi is only workable if one of the states rejects it. It achieves
stops here. English municipal law would be applicable. harmony of decisions only if the states concerned do not agree on
o But instead, it referred back to France a second time. applying it the same way.
o Griswold: This is based on a false premise. When remission
C. USEFULNESS OF RENVOI occurs, it goes back to the state’s internal law alone—there
• US courts do not see it as useful but sometimes apply it to avoid will be a stop to the “endless chain of reference.”
unjust results. o Lorenzen acknowledges renvoi in certain cases for reasons of
necessity and expediency.
University of Chicago v. Dater o Restatement:
! Title to land – lex situs
George Dater and John Price were co-owners of a parcel of land located in ! Divorce – domiciliary law
Michigan. Such land was mortgaged as security for a loan obtained by the • Courts may be unnecessarily burdened with the task of identifying
Sps. Dater and the Sps. Price. Trust deeds and promissory notes were sent to conflicts rules of another state.
Michigan to be signed by the parties, after which, they were mailed back to

Ish Guidote Page 23 of 107


o But courts will not use renvoi if, in the first place, they cannot Chapter VIII
determine the conflicts rules of another state. NOTICE AND PROOF OF FOREIGN LAW

Inapplicabillity of Renvoi in a False Conflict A. EXTENT OF JUDICIAL NOTICE


• Restatement 2d provides for the use of renvoi when there is a • The party whose cause of action or defense depends upon foreign
disinterested forum, in order to ensure that only the laws advancing law has the burden of proving such law.
the policies of the interested states will be applied. o Treated as a question of fact.
• Pfau: NJ court held that since CT and NJ had identical substantive o Thus, must be pleaded and proved.
laws and the third concerned state, Iowa, had no interest in ensuring o Rationale: Judge cannot take judicial notice of foreign law;
that its law applied, there was false conflict. Renvoi inapplicable. presumed to know only domestic law.
• GENERAL RULE: A judge cannot decide a case on the basis of his own
Pfau v. Trent Aluminum Co. knowledge and information.
o Can only act based upon evidence presented before him.
Trent, a New Jersey resident, agreed to drive Pfau, a Connecticut resident, • EXCEPTION: In Delgado v. Republic, the SC held that judicial notice
from Iowa to Missouri. While still in Iowa, Trent’s car collided with another may be taken of a foreign law with which the court is “evidently
causing injuries to Pfau. He sued for damages in New Jersey. Trent pleaded familiar.”
the Iowa guest statute as a defense, averring that lex loci delicti commissi o May be generally known, as in American or Spanish law; or
applies. o Judge may have ruled upon it in other cases.
• In the US, courts can take judicial notice of laws passed by other
HELD: The Iowa guest statute cannot be applied. Both New Jersey and states as mandated by the full faith and credit clause of the Federal
Connecticut law allow recovery by a guest for ordinary negligence of the host. Constitution.
Defendant argues that Connecticut’s choice-of-law rules should also be o Rationale: to transform several sovereignties into a single,
applied, such that the governing law is Iowa law. The court cannot apply the unified nation.
choice-of-law rules. Iowa has no interest in having its law applied in this • Rule 129 provides:
case. Hence, there is a false conflict.
§1. Judicial notice, when mandatory. — A court shall take judicial
Bellis v. Bellis notice, without the introduction of evidence, of the existence and
territorial extent of states, their political history, forms of government
Amos Bellis was a resident and citizen of Texas. He had 7 legitimate children and symbols of nationality, the law of nations, the admiralty and
and 3 illegitimate children. Amos left a will bequeathing leaving specified maritime courts of the world and their seals, the political constitution
amounts to his illegitimate children. Claiming to have been preterited, they and history of the Philippines, the official acts of the legislative,
opposed probate of the will before the CFI of Manila. Texas law does not executive and judicial departments of the Philippines, the laws of
provide for legitimes. nature, the measure of time, and the geographical divisions.(1a)

HELD: Texas laws apply. There is no occasion to apply renvoi. The doctrine is §2. Judicial notice, when discretionary. — A court may take judicial
usually pertienent where the decedent is a national of one country but a notice of matters which are of public knowledge, or are capable of
domiciliary of another. Following NCC16, Texas law applies. Assuming Texas unquestionable demonstration, or ought to be known to judges
law states that domiciliary law regulates intrinsic validity of wills, it is still because of their judicial functions.(1a)
Texas law which applies. But if Texas follows the lex rei sitae rule, renvoi
would arise because it would refer to Philippine law. §3. Judicial notice, when hearing necessary. — During the trial, the
court, on its own initiative, or on request of a party, may announce its
intention to take judicial notice of any matter and allow the parties to

Ish Guidote Page 24 of 107


be heard thereon. following provisions:

After the trial, and before judgment or on appeal, the proper court, on (a) Any deposition may be used by any party for the purpose of
its own initiative or on request of a party, may take judicial notice of contradicting or impeaching the testimony of deponent as a witness;
any matter and allow the parties to be heard thereon if such matter is
decisive of a material issue in the case.(n) (b) The deposition of a party or of any one who at the time of taking
the deposition was an officer, director, or managing agent of a public
B. PROOF OF FOREIGN LAW or private corporation, partnership, or association which is a party
• The following are pertinent provisions of Rule 132, Rules of Court: may be used by an adverse party for any purpose;

§19. Classes of documents. — For the purpose of their presentation (c) The deposition of a witness, whether or not a party, may be used
in evidence, documents are either public or private. by any party for any purpose if the court finds: (1) that the witness is
dead; or (2) that the witness resides at a distance more than one
Public documents are: hundred (100) kilometers from the place of trial or hearing, or is out of
the Philippines, unless it appears that his absence was procured by
(a) The written official acts, or records of the official acts of the the party offering the deposition; or (3) that the witness is unable to
sovereign authority, official bodies and tribunals, and public officers, attend or testify because of age, sickness, infirmity, or imprisonment;
whether of the Philippines, or of a foreign country; or (4) that the party offering the deposition has been unable to
procure the attendance of the witness by subpoena; or (5) upon
xxx application and notice, that such exceptional circumstances exist as
to make it desirable, in the interest of justice and with due regard to
§24. Proof of official record. — The record of public documents the importance of presenting the testimony of witnesses orally in
referred to in paragraph (a) of Section 19, when admissible for any open court, to allow the deposition to be used; and
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or (d) If only part of a deposition is offered in evidence by a party; the
by his deputy, and accompanied, if the record is not kept in the adverse party may require him to introduce all of it which is relevant
Philippines, with a certificate that such officer has the custody. If the to the part introduced, and any party may introduce any other parts.
office in which the record is kept is in a foreign country, the certificate (4a, R24)
may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the §11. Persons before whom depositions may be taken in foreign
foreign service of the Philippines stationed in the foreign country in countries. — In a foreign state or country, depositions may be taken
which the record is kept, and authenticated by the seal of his office. (a) on notice before a secretary of embassy or legation, consul
(25a) general, consul, vice-consul, or consular agent of the Republic of the
Philippines; (b) before such person or officer as may be appointed by
• It may sometimes be necessary to take depositions of non-residents, commission or under letters rogatory; or (c) the person referred to in
thus Rule 23 provides: section 14 hereof. (11a, R24)

§4. Use of depositions. — At the trial or upon the hearing of a motion Philippine Commercial and Industrial Bank v. Escolin
or an interlocutory proceeding, any part or all of a deposition, so far
as admissible under the rules of evidence, may be used against any Charles and Linnie Jane Hodges (Texas citizens) had identical provisions in
party who was present or represented at the taking of the deposition their respective wills bequeathing the remainder of their estates to the
or who had due notice thereof, in accordance with any one of the surviving spouse, subject to the condition that what would be left upon the

Ish Guidote Page 25 of 107


death of such spouse would be given to the testator’s siblings. As Mrs.
Hodges predeceased her husband, the latter was appointed executor of her HELD: Walton cannot recover of ARAMCO. The New York conflicts rule
estate. After Mr. Hodges’ death, Magno was appointed special administratrix provides that the substantive law applicable to a tort is the lex loci delicti
of both estates. PCIB later replaced Magno with respect to Charles’ estate. commissi. Plaintiff had the burden of proving Saudi law, as foreign law is not
The dispute in this case concerns the free portion of Linnie Jane’s estate a matter of judicial notice. The exception to this rule is where an American
which could validly pass to her siblings. Under Philippine law, the surviving court takes judicial notice of English law because the former can easily
spouse is entitled to legitime consisting of ½ of the decedent’s estate. Texas comprehend English decisions. Here, comprehension of the foreign law is not
law does not provide for legitimes. easy. While defendant is probably in a better position to know Saudi law,
under the laws of New York, the onus is with the plaintiff.
HELD: The case must be remanded for determination of the free portion.
Texas law on the matter must be proved as a fact. GENERAL RULE: Foreign • Another approach: Conclude that parties who fail to prove foreign law
laws must be proven like any other fact. EXCEPTION: Where the laws are acquiesce to the application of forum law.
already within the actual knowledge of the court; or they have been actually o Forum law is the basic law.
ruled upon in prior cases before it and none of the parties concerned claim o In the absence of proof of the applicable foreign law, there is
otherwise. In any case, PCIB already admitted that the free portion cannot be no reason to displace the basic law.
less than ½ of Mrs. Hodges’ share in the conjugal partnership, or ¼ of the
entire conjugal estate. Leary v. Gledhill

In Re Estate of Johnson While in Paris, Gledhill intimated to Leary that he was in need of $4,000. Leary
returned to Germany and sent Gledhill a check for $1,500. He sued to recover
Johnson is of Swedish descent but was naturalized as a US citizen. He the money before a New Jersey court. Gledhill moved to dismiss alleging that
executed a holographic will in Manila with only two witnesses instead of the the governing law being lex loci contractus, Leary had the burden of proving
three required by the Code of Civil Procedure. When the will was presented for French law.
probate, it was alleged that he was a resident of Illinois and that the will was
executed in compliance with the laws of such state. The testator’s daughter HELD: Dismissal of the case is improper. Absence of proof of foreign law will
opposed probate of the will. The will was admitted to probate, the court taking not necessarily result in the failure of the plaintiff’s cause of action. Three
judicial notice of the Illinois law as exhibited in Starr & Curtis’s Annotated presumptions may be indulged in:
Illinois Statutes. 1. French law is the same as the law of the forum;
2. French law, like all civilized countries, recognizes certain fundamental
HELD: The trial court erred in taking judicial notice of Illinois law. The Code of principles; and
Civil Procedure only allows courts to take judicial notice of acts of the United 3. That the parties, by failing to prove French law, have acquiesced in
States Congress, not of the individual state legislatures. The Illinois law having their dispute determined by the law of the forum.
should have been proven just like any other fact. However, such mistake can The court applies the third presumption, contrary to the action of the lower
no longer be corrected as it was not assigned as an error on appeal. Neither is court which applied the second. The difficulty with the second presumption is
it contended that the trial court’s conclusion is erroneous. that it is hard to determine whether or not the question presented was of such
a fundamental nature as to reasonably warrant the assumption that it would
Walton v. Arabian American Oil Co. be similarly treated by the laws of all civilized countries. No similar difficulty
obtains with the third presumption.
Walton was a citizen of Arkansas. He met a car accident in Saudi Arabia with
a truck owned by ARAMCO and driven by one of its employees. ARAMCO is a
Delaware corporation with principal office in New York. Walton sued before a
New York court, but he failed to plead or prove Saudi law.

Ish Guidote Page 26 of 107


Zalamea v. Court of Appeals o Decedent was a resident of the Philippines;
o He executed his will in the Philippines;
The Zalameas bought three tickets for a TWA flight from New York to Manila. o Property forming part of his estate was located in the
Mrs. Zalamea and daughter were bumped off despite having confirmed seats. Philippines;
Upon their return to Manila, they filed a complaint for damages based on o He intended Philippine law to govern the disposition of his
breach of contract of carriage. The RTC ruled for plaintiffs but the CA reversed estate.
ratiocinating that overbooking is an allowed practice among US airlines and • Using characterization, the Court could have characterized the case
that there was no bad faith on the part of TWA. as one involving property, not succession, such that the rule of lex rei
sitae would be applicable.
HELD: The Zalameas are entitled to both moral and exemplary damages. The o End result would be the same—Philippine law applies.
CA’s conclusion that overbooking is an allowed practice has no basis in fact
because the only proof on this matter is the statement of a TWA employee to Suntay v. Suntay
the effect that the Code of Federal Regulations of the Civil Aeronautics Board
allows overbooking. Assuming arguendo that overbooking is allowed, TWA Federico Suntay was a Filipino who died in China in 1934. Two alleged wills
would still be liable because following lex loci contractus, Philippine law were presented for probate: one executed in 1929 and another in 1931.
applies. Silvino, a child of the decedent, alleged that the 1931 will had previously been
filed, recorded and probated before a court in Amoy, China.
• Presumed-identity approach/processual presumption: Presume that
foreign law is the same as forum law. HELD: The will cannot be probated. The following must be proved as facts:
1. That the district court in Amoy is a probate court;
Miciano v. Brimo 2. The procedural law of China in the probate of wills; and
3. The legal requirements for the execution of a valid will in China in
Joseph Brimo, a Turkish citizen, executed a will in the Philippines. Miciano 1931.
was appointed administrator of his estate. Miciano filed a project of partition No proof was presented on any of these points. As such, it may be presumed
which was opposed by Andre Brimo, the testator’s brother. He alleged that that the proceedings in the matter of probating a will in the Chinese courts are
some of the dispositions in the will were violative of Turkish law. However, he the same as those provided for in our laws on the subject.
never presented proof of such law.
Collector of Internal Revenue v. Fisher
HELD: The provisions are not violative of Turkish law. Under Art. 10 of the Old
Civil Code, the intrinsic validity of will shall be determined by the national law The spouses Stevenson were British nationals who were married in the
of the person whose succession is in question. It was incumbent upon Brimo Philippines. In Mr. Stevenson’s will, he instituted his wife as his sole and
to present proof of the applicable Turkish law on the matter. In the absence of universal heir. Upon his death, the administrator of his estate filed an
evidence of such laws, they are presumed to be the same as those of the inheritance tax return. The CIR assessed the estate for deficiency taxes
Philippines. Anent the condition in the testator’s will that his properties claiming that under English law, all of the properties acquired during the
should be distributed in accordance with Philippine law, the court finds the marriage belong exclusively to the husband. Thus, the taxable net estate is
same to be void for violating Art. 10 of the Old Civil Code. the whole of Mr. Stevenson’s estate (no conjugal partnership). The Court of
Tax Appeals held that inasmuch as the spouses were married in the
EAP: In this case, the court disregarded the testator’s clear choice to use Philippines, the system of conjugal partnership of gains applies.
Philippine law.
HELD: The spouses’ property relations are governed by English law. However,
• If we were to use the most significant relationship approach, the law which allegedly vests on the husband full ownership of the properties
Philippine law would still apply because: acquired during the marriage has not been proven by the CIR. In the absence

Ish Guidote Page 27 of 107


of proof, the court is justified in indulging in “processual presumption,” in which have for their object public order, public policy and good
presuming that the law of England on the matter is the same as [Philippine] customs shall not be rendered ineffective by laws or judgments
law. promulgated, or by determinations or conventions agreed upon in a
foreign country. (11a)
Board of Commissioners (CID) v. Dela Rosa
1. The foreign law is contrary to an important public policy of the forum
The CID instituted deportation proceedings against William Gatchalian. It • Public policy – principle of law which holds that no subject or citizen
claims that the marriage of his parents and grandparents, alleged to have can lawfully commit any act which has a tendency to be injurious to
taken place in China, were not duly proven. Thus, he is an illegitimate child the public or against the public good.
whose citizenship follows that of his mother (Chinese). • Public policy technique – court will not give due course to a claim
existing under foreign law because:
HELD: William is a Filipino citizen, hence, he cannot be deported. The CID o It considers the nature of the claim unconscionable; or
failed to present the Chinese law on marriage. In the absence of proof of o Its enforcement would violate a fundamental principle of
foreign law, it is presumed to be the same as the Philippine law on the matter. justice, some prevalent conception of good morals, or some
The Philippines adheres to lex loci celebrationis—a marriage formally valid deep-rooted tradition of the commonweal.
where celebrated is valid everywhere. Also, the presumption is in favor of • Dismissal on the grounds of public policy is not a dismissal on the
validity of the marriage (NCC220). The burden was on the CID to prove the merits. Can seek relief elsewhere.
invalidity of the marriages in this case. • SC refused to allow a claim based on foreign law (despite the parties
agreeing on said law) based on a “public interest” standard.
• Factors to be considered in determining whether to apply domestic
law or decide the case against the party who has the burden of Pakistan International Airlines Corporation v. Ople
proving foreign law:
1. Public interest involved in the dispute; PIA employed two Filipinas (private respondents) as flight attendants. Prior to
2. Accessibility of foreign law materials to the parties; the expiration of their employment contracts, they were dismissed. Private
3. Possibility that the plaintiff is merely forum shopping; and respondents filed complaints for illegal dismissal with the Ministry of Labor
4. Similarities between forum and foreign law on the issue in and Employment. PIA claims that the employment contracts contain a
point. choice-of-law clause favoring Pakistan law.
• It is more likely that forum law will not be applied except in some
cases involving marriage and family relations. HELD: The choice-of-law clause cannot bar application of the Labor Code.
The relationship between PIA and private respondents is affected with public
C. EXCEPTIONS TO THE APPLICATION OF FOREIGN LAW interest. The otherwise applicable Philippine laws and regulations cannot be
• Three main categories: rendered illusory by the parties agreeing upon some other law to govern their
1. When the local law expressly so provides; relationship. Also, since PIA failed to plead and prove Pakistan law, the
2. When there is failure to plead and prove the foreign law or doctrine of processual presumption applies.
judgment; and
3. When the case falls under any of the exceptions to the rule of • One criticism of the public policy exception is that it can be used as
comity. an ultimate escape device.
• Some exceptions are in NCC17: o Can just disregard choice-of-law approaches without having
to explain its analysis.
xxx o Goodrich: it should take an extraordinary case to justify an
argument based on public policy of the forum.
Prohibitive laws concerning persons, their acts or property, and those • “Intolerable affectation of superior virtue”

Ish Guidote Page 28 of 107


o Courts of one state would pretend that the enforcement of a 4. The issue involved in the enforcement of foreign claim is fiscal or
right created by another state would offend its good morals. administrative
o A court of the forum should not sit in judgment over the • A state is not obliged to enforce the revenue law of another.
wisdom and soundness of the applicable foreign law. • Banco de Brazil v. A.C. Israel: no enforcement of currency regulations.
• Courts should ask: In what way is the foreign law repugnant to our • Moore v. Mitchell: Revenue laws fall within the same reasoning as
public policy? penal laws. They affect a state in matters as vital to its existence as
o If the judge is absolutely sure that the foreign law is its criminal laws.
barbarous or frightfully unjust, public policy is properly • Leflar: Foreign country wants to sue, let it. Follow the benefits-
invoked. received theory behind taxation.
o If not so convinced, ask what policies are served by one
choice-of-law over the other. 5. The foreign law or judgment is contrary to good morals (contra bonos
mores)
2. The foreign law is procedural in nature • Standard is difficult to define.
• Procedural laws are purely internal matters peculiar only to the State. • Contra bonos mores – acts having mischievous or pernicious
• Procedural law – prescribes forms of remedies in order that courts consequences or against true principles of morality.
applying them are able to administer justice. o Killing
• Why apply forum procedural law? Judicial convenience. o Bribery of public officers
• Any individual who submits himself to the jurisdiction of the law of o Incestuous marriages
the forum must follow the forum’s rules of procedure. • Subject to the same criticisms as the public policy exception to due
• Problem: characterization as substantive or procedural. inherent subjectivity.

3. Issues are related to property (lex situs) 6. The application of foreign law will work undeniable injustice to the citizens
• GENERAL RULE: Questions relating to immovable property are of the forum
governed by the law of the place where the property is located. This
rule is embodied in NCC16. 7. The foreign law is penal in character
• Three reasons why lex situs governs property: • The Antelope: “The courts of no country shall execute the penal laws
1. Land and everything attached to it are within the exclusive of another.”
control of the State, only state officials can lawfully deal with • Penal statute test: Whether, it appears to the tribunal which is called
them physically. upon to enforce it to be, in its essential character and effect, a
a. Interest in immovables cannot be affected without punishment of an offense against the public.
the consent of the state. • Penalty – a sum of money exacted as punishment for a civil wrong as
2. Following a policy-centered approach, immovables are of distinguished from compensation for loss suffered by the injured
greatest concern to the state in which they are situated. party.
3. Demands of certainty and convenience. • Lorenzo v. Posadas: “…a statute is penal when it imposes punishment
• EXCEPTIONS: for an offense committed against the state which, under the
1. Where the transaction does not affect transfer of title to or Constitution, the Executive has the power to pardon.”
ownership of the land. • Penal statutes – all statutes which command or prohibit certain acts
2. In contracts where real property is offered by way of security. and establish penalties for their violation.
3. Testate or intestate succession. • Revenue laws are generally not considered penal statutes.
• The penal law exception is partly remedied by the law on extradition.

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o Under an extradition treaty, the state that receives the fugitive Merits and Demerits of Nationality as Personal Law
from justice is legally obliged to surrender him to the state • Rationale: the laws of each state were presumed to be made for an
from where he escaped. “ascertained population.”
o Political and religious offenders are generally not • Since lawmakers considered the physical and moral qualities of the
extraditable. citizens, then logically, laws should apply to such citizens wherever
• Recall interest analysis approach. they are.
o Penal laws often express vital state interests. • Nationality is easily verifiable from documents.
o Should it not be, then, that penal laws should be one of the • Problems:
first foreign laws to be enforced? o Stateless persons or those with multiple nationalities.
o Places with no single national law like the US.
8. The application of the foreign law might endanger the vital interests of the o Individuals who are nationals of one state but have lived in
state another state for most of their life.

PART III: PERSONAL LAW Importance of Nationality in the Philippines


• Most civil law countries follow the national law theory.
Chapter IX • National law regulates:
NATIONALITY o Civil status
o Capacity
A. IMPORTANCE OF A PERSONAL LAW o Condition
• Nationality or domicile connects an individual to a state. o Family rights and duties
o Succession
• Assignment of a personal law:
o Allows courts to exercise jurisdiction; or • Nationality law theory – a conflict of laws theory by virtue of which
o Determines the governing choice-of-law rule on a specific jurisdiction over the particular subject matter affecting a person, such
situation or transaction involving him. as status of a natural person, is determined by the latter’s nationality.
(Ellis v. Republic)
• An individual’s personal law follows him wherever he is.
o It governs the following transactions: • NCC15 provides:
! Marriage
! Divorce Article 15. Laws relating to family rights and duties, or to the status,
! Legitimacy condition and legal capacity of persons are binding upon citizens of
! Capacity to contract the Philippines, even though living abroad. (9a)
• History:
o Italian city-states • The provision is taken from OCC9 which, in turn, is taken from Art. 3
! Transactions were made between inhabitants of of the Code Napoleon.
different cities owing allegiance to the same state. o French laws concerning personal status and capacity govern
! Hence, domicile was the only relevant basis for Frenchmen even when residing in foreign countries.
personal law. o For foreigners residing in France, French courts applied their
o 1803: Code Napoleon national laws.
o 1812: Austrian Code o Underlying theory: awareness of national identity that was
! Both used the law of nationality. born in the French Revolution and strengthened in the Italian
! Provided that laws concerning states and capacity struggle for national unity.
govern all cities irrespective of their residence.

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B. DETERMINATION OF NATIONALITY Talaroc v. Uy
• Each state has the authority to determine its own nationals.
• The Hague Convention on Certain Questions Relating to the Conflict Alejandro Uy was born to a Spanish father and a Filipina mother. He ran for
of Nationality Law provides: and won as Mayor of Manticao, Misamis Oriental. A quo warranto proceeding
was filed against him alleging that he was not a Filipino citizen. In this
Article 2. Any question as to whether a person possesses the defense, Uy claimed that upon the death of his father in 1926, his mother
nationality of a particular State shall be determined in accordance reacquired Filipino citizenship, and that he followed such citizenship as well.
with the law of the State.
HELD: Uy is a Filipino citizen.
• Sec. 1, Art. IV, 1987 Const. states:
Roa v. Insular Collector of Customs (1912): Upon [the husband’s] death, the
Section 1. The following are citizens of the Philippines: widow reverts back to her original citizenship, unless she elects to retain her
husband’s. Her children, in turn, follow her nationality with the proviso that
1. Those who are citizens of the Philippines at the time of the they may elect for themselves upon reaching majority.
adoption of this Constitution;
The ruling in Roa was overturned by Tan Chong v. Secretary of Labor (1947).
2. Those whose fathers or mothers are citizens of the
Philippines; Neither of the two cases is controlling. The 1935 Constitution states that
citizens of the Philippine Islands at the time of the adoption of the
3. Those born before January 17, 1973, of Filipino mothers, who Constitution are citizens of the Philippines. When the Constitution was
elect Philippine citizenship upon reaching the age of majority; adopted, Uy was a citizen of the Philippines under the Roa doctrine. He
and already held public office, exercised the right of suffrage, and took the oath of
allegiance. It would be unfair to hold Uy as an alien after he already exercised
4. Those who are naturalized in accordance with law. privileges of citizenship. Moreover, the Tan Chong decision itself states that
the decision cannot be given retroactive effect.
1. NATURAL-BORN CITIZENS
• Jus soli – law of the place of one’s birth; used in many common law CA 63 (1936) provides for a procedure to be followed in a widow’s
countries. reacquisition of Philippine citizenship. This law cannot be given retroactive
effect. At the time it was passed, Uy’s mother had already been a widow for
• Jus sangguinis – rule of descent or blood; articulated in the
10 years.
Constitution.
• Co v. Electoral Tribunal: Jose Ong is a natural-born citizen because
Co v. Electoral Tribunal of the House of Representatives
he did not have to perform any act to perfect his Filipino citizenship.
o His mother was Filipina.
Ong Te was a Chinese citizen who settled in Samar in 1905. His son, Ong
o His father was Chinese who was naturalized when he was
Chuan, was born in China in 1905 and came to the Philippines in 1915. Ong
only a minor.
Chuan married one Agripina Lao. They had 8 children, one of whom is private
• Aznar v. COMELEC: Private respondent presumed to be Filipino
respondent Jose Ong, Jr. When private respondent was 9 years old, his father
because his father is Filipino.
Ong Chuan was naturalized as a Filipino citizen. Private respondent voted in
o Burden of proof is on the person alleging that one has lost his
two consecutive elections in Laoang, Samar, before deciding to run for
citizenship.
Congress in 1987. He garnered the highest number of votes, defeating herein
petitioner. A protest was filed before the HRET. Ong, Jr. was declared a
Filipino.

Ish Guidote Page 31 of 107


o Summary administrative inquiry;
HELD: Private respondent Ong, Jr. is a Filipino. Under 1973 Constitution, o No filing of declaration of intention, income requirements;
those born of Filipino mothers before Jan. 17, 1973 must elect Filipino o Speak and write Filipino, English or Spanish and any principal
citizenship upon reaching the age of majority. But it is unnatural and Filipino language.
unnecessary to have required private respondent to elect Filipino citizenship o Special committee recommends issuance of a Decree to
because he was already a citizen. His mother was a citizen. Ong Chuan, his qualified applicants to the President.
father, was naturalized when Ong, Jr. was only 9 years old. Furthermore, he
has voted in elections and is exercising a profession reserved only to Qualifications for Applicants for Naturalization
Filipinos. The exercise of the right of suffrage constitutes a positive act of 1. Not less than 21 years old on the date of the hearing of the petition.
election of Filipino citizenship. Ong, Jr. lived his entire life as a Filipino.
2. Must have resided in the Philippines for a continuous period of not
Dissent: At birth, private respondent’s father was still a Chinese citizen. Thus, less than 10 years.
he still had to elect Filipino citizenship upon attaining the age of majority. o 10-year residency requirement may be reduced in the
following cases:
Tecson v. Commission on Elections ! If the applicant has honorably held office under the
Philippine Government or any of its political
Fernando Poe, Jr. (FPJ) filed a certificate of candidacy for President of the subdivisions or LGUs;
Republic. Several petitions were filed to cancel his COC on the ground of ! If he established a new industry or introduced a new
material misrepresentation relating to his citizenship. One of the petitioners, invention in the Philippines;
Fornier, alleged that FPJ’s grandfather (Lorenzo Pou) was a Spanish citizen, ! If he is married to a Filipino woman;
hence, FPJ’s father (Allan Poe) was also a Spanish citizen. And even ! If he had been engaged as a teacher in a public or
assuming that Allan was Filipino, FPJ could not follow his citizenship because private school NOT established for the exclusive
he was an illegitimate child. instruction of children of persons of a particular
nationality/race in any of the branches of education
HELD: FPJ is a Filipino. Lorenzo Pou died in Pangasinan in 1954. It could be or industry for a period of two years;
assumed that he was in the Philippines during the period of en masse ! If he was born in the Philippines.
Filipinization under the Philippine Bill of 1902. This would make his son, Allan,
a Filipino as well. And finally, FPJ, who was born in 1939, would likewise be a 3. Of good moral character, believes in the principles underlying the
Filipino under the 1935 Constitution (those born of Filipino fathers). The Constitution, conducted himself in a proper and irreproachable
Constitution does not distinguish between legitimate and illegitimate manner during the entire period of residence in the Philippines in his
children. relations with the government as well as with the community.
o Proper and irreproachable – higher standard of morality than
Dissent: FPJ was born out of wedlock and was not recognized by his father. good moral character.
An illegitimate child of a Filino father may be only be considered a natural- o Dy Lam Go v. Republic: moral character of the highest degree;
born citizen if he was duly acknowledged by the latter at birth, thus leaving merely being a law-abiding citizen is insufficient.
the child with nothing more to do to acquire or perfect his citizenship. o Must be proved by competent evidence:
! Testimony of two character witnesses who must be
2. CITIZENS BY NATURALIZATION well-known in the community; good reputation for
• Naturalization – confers to an alien nationality after birth by any of probity.
the means provided by the law. ! Persons employed by the petitioner would be
• The Naturalization Law is CA 473 as amended by RA 530. incompetent to testify.
• During the Marcos regime, LOI 270 was in force: o Que Tiac v. Republic:

Ish Guidote Page 32 of 107


! Witnesses must have known the petitioner for the HELD: Yu was not able to prove that he had lucrative income to support his
period prescribed by law. petition. The evidence presented tends to show that he was receiving only
! Must be able to attest that the applicant conducted P150 as salary. The rest were given in the form of allowances and bonuses.
himself in a proper and irreproachable manner during This amount does not come up to the category of a lucrative income,
the entire period of his residence. considering that the petitioner is now a married man.

4. Must own real estate in the Philippines worth not less than P5,000, or 4. [CONTINUED]
must have some lucrative trade, profession or lawful occupation. o “Lucrative trade, profession or lawful occupation” –
o Note that Art. XII of the 1987 Constitution provides: substantial gainful employment; the obtaining of tangible
receipts.
Section 3. Lands of the public domain are classified into o Appreciable margin of income over expenses.
agricultural, forest or timber, mineral lands and national o Must be able to provide adequate support for the income-
parks. Agricultural lands of the public domain may be further earner and his family in the event of sickness, unemployment
classified by law according to the uses to which they may be or disability to work.
devoted. Alienable lands of the public domain shall be limited o Watt v. Republic:
to agricultural lands. Private corporations or associations ! Not enough to show that the applicant is not a
may not hold such alienable lands of the public domain financial burden upon the community.
except by lease, for a period not exceeding twenty-five years, ! His financial condition must be such to permit him
renewable for not more than twenty-five years, and not to and the members of his family to live with reasonable
exceed one thousand hectares in area. Citizens of the comfort, in accordance with the prevailing standard
Philippines may lease not more than five hundred hectares, or of living, and consistently with the demands of
acquire not more than twelve hectares thereof, by purchase, human dignity.
homestead, or grant. ! Courts should be skeptical of evidence provided by
applicants who work for their relatives or parents.
Taking into account the requirements of conservation, o Property ownership requirement is at odds with the
ecology, and development, and subject to the requirements of Constitution.
agrarian reform, the Congress shall determine, by law, the ! Palacias v. Vda. de Ramirez: Hereditary succession
size of lands of the public domain which may be acquired, exception does not extend to cases of testamentary
developed, held, or leased and the conditions therefor. succession.
• It would be easy to circumvent the provision
Section 7. Save in cases of hereditary succession, no private by asking someone to give property to an
lands shall be transferred or conveyed except to individuals, alien by way of devise.
corporations, or associations qualified to acquire or hold o BP 185 allows natural-born citizens who have lost their
lands of the public domain. Filipino citizenship to be transferees of private land for
residential purposes not exceeding 1,000 sq. m. of urban land
Yu Kian Chie v. Republic or 1 ha. of rural land.
o SC:
Petitioner applied for naturalization before the CFI claiming that he had an ! In pari delicto doctrine can apply.
average ncome of P3,000. The OSG opposed and alleged that he failed to • Action to declare the contract of sale void
prove lucrative income. The lower court granted the petition for was dismissed by the SC on this ground.
naturalization. Hence, this appeal. ! Naturalized aliens not prohibited from owning land.

Ish Guidote Page 33 of 107


• Rationale: underlying purpose of the C. PROCEDURE FOR NATURALIZATION
prohibition is to preserve the patrimony of the 1. Filing of declaration of intention, unless exempted;
nation for future generations of Filipinos. 2. Filing of petition for naturalization;
3. Publication in the OG or newspaper of general circulation, hearing;
5. Must be able to speak and write English or Spanish and any one of 4. If petition approved, rehearing two years after promulgation of
the principal Philippine languages. judgment awarding naturalization;
o If he can only understand, he is not qualified. 5. Oath-taking (allegiance to support and defend the Constitution and
the laws).
6. Must have enrolled minor children of school age in any of the public
or recognized private schools where Philippine history, government Declaration of Intention
and civics are taught or prescribed as part of the school curriculum
during the entire period of the residence required of him, prior to the Sec. 5. Declaration of intention. – One year prior to the filing of his petition for
hearing of his petition for naturalization as a citizen. admission to Philippine citizenship, the applicant for Philippine citizenship
o Children of the applicant must learn and imbibe Filipino shall file with the Bureau of Justice, a declaration under oath that it is bona
customs and traditions. fide his intention to become a citizen of the Philippines. Such declaration
o Must be affirmatively shown, otherwise the application will be shall set forth name, age, occupation, personal description, place of birth, last
denied. foreign residence and allegiance, the date of arrival, the name of the vessel or
o Even if the children cannot be brought to the Philippines due aircraft, if any, in which he came to the Philippines, and the place of residence
to financial difficulties, the petition will still be denied. in the Philippines at the time of making the declaration. No declaration shall
o If the school is predominantly enrolled in by Chinese be valid until lawful entry for permanent residence has been established and a
students, the application will be denied. certificate showing the date, place, and manner of his arrival has been issued.
The declarant must also state that he has enrolled his minor children, if any,
Disqualifications for Naturalization in any of the public schools or private schools recognized by the Office of
• GENERAL RULE: State has the burden of proving disqualification of an Private Education of the Philippines, where Philippine history, government,
applicant. and civics are taught or prescribed as part of the school curriculum, during
• EXCEPTION: SC has held in some cases that the applicant has the the entire period of the residence in the Philippines required of him prior to the
burden have proving that he has none of the disqualifications. hearing of his petition for naturalization as Philippine citizen. Each declarant
o Rationale: naturalization is a privilege, not a right. must furnish two photographs of himself.
• Crimes involving moral turpitude – acts of baseness, vileness or
depravity in the private and social life in general, contrary to the • Exemptions (§6):
accepted and customary law of right and duty between men. 1. Persons born in the Philippines and have received their
o Contrary to honesty, modesty or good morals. primary and secondary education in public schools or those
• CA 473 requires that the applicant must deal with and receive recognized by the Government and not limited to any race or
Filipinos in his home, and visit Filipino homes with a spirit of nationality;
friendship, friendliness and equality without discrimination. 2. Those who have resided continuously in the Philippines for a
o Petitioner kept his wife and children in a neighboring period of thirty years or more before filing their application;
country—shows lack of sincere desire to establish himself as 3. Widow and minor children of an alien who declared his
a Filipino citizen. intention to become a citizen of the Philippines and dies
• Applicant must establish that his nation grants reciprocal rights to before he is actually naturalized.
Filipino citizens at the time of the hearing of his application. • Watt v. Republic: if one comes within the exemption, a statement of
such exemption and the reasons therefor should appear in the
petition.

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o Necessary to apprise the public so they can object or contest Vivo v. Cloribel
to any evidence in that regard.
o Failure to comply constitutes a fatal defect; petition will be Chua, a chinese woman, and her two minor children, Koc and Tian, arrived in
void for noncompliance with the law. the Philippines as temporary visitors. Chua’s husband filed a petition for
• Jurisdiction conferred by §8: naturalization which the trial court granted. Thus, Chua and the children filed
for and indefinite extension of their stay in the Philippines. The Sec. of
Sec. 8. Competent court. – The Court of First Instance of the province Foreign Affairs approved and changed their status to “special non-
in which the petitioner has resided at least one year immediately immigrants.” The Commissioner of Immigration refused to honor the
preceding the filing of the petition shall have exclusive original extension. The Sec. of Justice eventually revoked the extension, prompting
jurisdiction to hear the petition. Chua to file a suit for mandamus to allow her to remain in the Philippines.

• Character witnesses must be qualified and competent to testify on: HELD: Chua is not entitled to stay in the Philippines as she did not
o Period of applicant’s residence in the Philippines; automatically acquire Philippine citizenship upon her husband’s
o His good and irreproachable conduct. naturalization. She must first prove that she possesses all of the
• During the motion to take oath, court may inquire into any question qualifications and none of the disqualifications for naturalization. Instead, she
affecting the qualifications of the applicant. committed acts of misrepresentation in stating that she only came to the
Philippines for a temporary stay. Chua also failed to satisfy the 10-year
Effect of Naturalization on Wife and Children residency requirement.

Sec. 15. Effect of the naturalization on wife and children. – Any woman who is As for the children, they cannot claim the benefit of their father’s
now or may hereafter be married to a citizen of the Philippines, and who might naturalization as they were not lawfully residing in the Philippines.
herself be lawfully naturalized shall be deemed a citizen of the Philippines.
Moy Ya Lim Yao v. Commissioner of Immigration
Minor children of persons naturalized under this law who have been born in
the Philippines shall be considered citizens thereof. Lau was a Hong Kong citizen who married petitioner, an alleged Filipino
citizen. Upon expiration of her visitor’s visa, she filed for injunctive relief
A foreign-born minor child, if dwelling in the Philippines at the time of the before the CFI to restrain the Commissioner of Immigration from deporting
naturalization of the parent, shall automatically become a Philippine citizen, her. The CFI denied the application on the ground that she did not ipso facto
and a foreign-born minor child, who is not in the Philippines at the time the acquire Philippine citizenship upon her marriage to Lim; she had to prove that
parent is naturalized, shall be deemed a Philippine citizen only during his she had all of the qualifications and none of the disqualifications.
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 HELD: Lau automatically acquired Filipino citizenship upon her marriage to
becoming of age. Lim. Based on the construction given to the American statute on which our
Immigration Act is based, the husband’s citizenship is conferred to the alien
A child born outside of the Philippines after the naturalization of his parent, wife without having to prove that she possesses the special qualifications of
shall be considered a Philippine citizen, unless within one year after reaching residence and moral character, among others, provided that she does not
the age of majority, he fails to register himself as a Philippine citizen at the suffer from any of the enumerated disqualfiications. Likewise, an alien
American Consulate of the country where he resides, and to take the woman married to an alien who is subsequently naturalized here follows the
necessary oath of allegiance. citizenship of her husband the moment he takes his oath as a Filipino citizen,
provided that she does not suffer from any of the disqualifications.

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• Mo Ya Lim reversed Burca v. Republic which held that: proclamation as Governor of Sorsogon on the ground that he is not a Filipino
1. An alien woman married to a Filipino who desires to be a citizen. Frivaldo was naturalized in the US in 1983. However, he claims that he
Filipino citizen must file a petition for citizenship stating that was forced to seek American citizenship to protect himself from President
she has all the qualifications and none of the Marcos.
disqualifications under the Revised Naturalization Law.
2. Petition must be filed in the CFI where petitioner has resided HELD: Frivaldo is not a Philippine citizenship. The OSG correctly found that he
at least one year immediately preceding the filing of the has not repatriated himself even after his naturalization. There are three ways
petition; and to reacquire citizenship:
3. Any action by any other office declaring that the alien wife of 1. Direct act of Congress;
a Filipino citizen is also a Filipino citizen is null and void. 2. Naturalization;
• After Mo Ya Lim was promulgated, Burca petitioned the SC for 3. Repatriation
affirmation of the trial court’s judgment declaring her a Filipino The act of voting in Philippine elections does not constitute repatriation, even
citizen. if under the laws of the US, Frivaldo forfeited his US citizenship. The laws of
o SC held that Mo Ya Lim notwithstanding, Burca still had to the US do not concern us here. At best, Frivaldo became a stateless person.
take steps to cancel her alien certificate of registration. Neither can the filing of his COC constitute the “formal declaration” required
o Our laws do not allow judicial action or proceeding for the by CA 63.
declaration of the citizenship of an individual.
Frivaldo v. Commission on Elections (1996)
No Judicial Declaration of Philippine Citizenship
• May not be granted in an action for declaratory relief. Frivaldo applied for repatriation under PD 725 on Aug. 17, 1994. However, he
• Summary procedure under NCC412 for correction of error in the Civil was not able to take his oath until June 30, 1995. It is argued that his COC
Registry was disallowed. was invalid because at the time it was filed (May 8, 1995), Frivaldo was not
o Rule later relaxed. yet a Filipino citizen.
o Change of citizenship may be granted where an appropriate
action is made. All parties who may be affected must be HELD: Frivaldo is a Filipino citizen. The reacquisition of citizenship is deemed
notified and represented; there must be a full-blown hearing. for all intents and purposes to have retroacted to the date of application.
• Tan Yu Chin v. Republic:
o Under our laws, there can be no action or proceeding for the Labo, Jr. v. Commission on Elections
judicial declaration of citizenship of an individual.
o As an incident only of the adjudication of the rights of the Labo was elected Mayor of Baguio City. Lardizabal filed a quo warranto
parties to a controversy, the court may pass upon, and make proceeding alleging that Labo was an Australian citizen, as evidenced by the
a pronouncement relative to, their status. following acts: naturalization, change of status from “immigrant” to “returning
o Otherwise, such a pronouncement is beyond judicial power. former Filipino citizen,” obtaining an Immigrant Certificate of Resident, and
declaration of Australian citizenship in various sworn statements. Labo
D. LOSS OF PHILIPPINE CITIZENSHIP claims that at worst, he is a dual citizen.
• Modes provided in CA 63 as amended by RA 106.
HELD: Labo is not a Filipino citizen. CA 63 provides that citizenship may be
1. Naturalization in foreign countries lost by naturalization, express renunciation, or taking of an oath of allegiance
to another state. All of these apply to Labo. There is no showing that he has
Frivaldo v. Commission on Elections (1989) taken steps to reacquire Philippine citizenship by any of the means provided
by Philippine laws.
A petition was filed before the COMELEC to annul Frivaldo’s election and

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• In a later case, Court held that Labo still failed to prove reacquisition • §18, CA 473 provides:
of Philippine citizenship.
o In the absence of any official action or approval by the proper Sec. 18. Cancellation of Naturalization Certificate Issued. – Upon
authorities, a mere application for repatriation does not, and motion made in the proper proceedings by the Solicitor-General or his
cannot, amount to an automatic reacquisition of the representative, or by the proper provincial fiscal, the competent judge
applicant’s Philippine citizenship. may cancel the naturalization certificate issued and its registration in
the Civil Register:
2. By express renunciation of citizenship
1. If it is shown that said naturalization certificate was obtained
Aznar v. Commission on Elections fraudulently or illegally.

Osmeña filed his Certificate of Candidacy for Governor of Cebu. A petition for 2. If the person naturalized shall, within the five years next following
disqualification was filed on the ground that he was an American citizen, as the issuance of said naturalization certificate, return to his native
proven by a Certification from the Deportation Commissioner that he had a country or to some foreign country and establish his permanent
subsisting Alien Certificate of Registration. Osmeña claims that he remains a residence there: Provided, That the fact of the person naturalized
Filipino since he was born of Filipino parents, had a valid Philippine passport, remaining for more than one year in his native country or the country
voted in elections, and resided in the Philippines his entire life. of his former nationality, or two years in any other foreign country,
shall be considered as prima facie evidence of his intention of taking
HELD: Osmeña is a Filipino citizen. Petitioner failed to prove that Osmeña lost up his permanent residence in the same;
his citizenship by any of the means provided for under CA 63. Philippine
courts are only allowed to determine who are Filipino citizens and who are 3. If the petition was made on an invalid declaration of intention;
not. Whether or not a person is considered an American under the laws of the
US does not concern us here. Loss of Filipino citizenship cannot be 4. If it is shown that the minor children of the person naturalized
presumed, considering that Osmeña vehemently denied having taken the oath failed to graduate from a public or private high schools recognized by
of allegiance to the US. Renunciation must be express—here, there was no the Office of Private Education of the Philippines, where Philippine
renunciation, express or implied. history, government and civics are taught as part of the school
curriculum, through the fault of their parents either by neglecting to
3. Subscribing to an oath of allegiance to support the constitution or laws of a support them or by transferring hem to another school or schools. A
foreign country upon attaining twenty-one years of age or more, subject to certified copy of the decree cancelling the naturalization certificate
certain exceptions shall be forwarded by the clerk of the Court to the Office of the
President and the Office of the Solicitor General;
4. Rendering service to, or accepting commission in, the armed forces of a
foreign country, subject to certain exceptions 5. If it is shown that the naturalized citizen has allowed himself to be
used as a dummy requiring Philippine citizenship as a requisite for
5. Having been declared by competent authority, a deserter of the Philippine the exercise, use or enjoyment of a right, franchise or privilege.
armed forces in time of war, unless subsequently, a plenary pardon or
amnesty has been granted • Estoppel/res judicata cannot be invoked against a decree directing
the issuance of a certificate of naturalization—it is a mere grant of
6. In the case of a woman, upon her marriage to a foreigner, if the by virtue of political privilege.
the laws in force in her husband’s country, she acquires his nationality • If it was obtained fraudulently or illegally, the certificate may be
cancelled.
7. Cancellation of the certificate of naturalization

Ish Guidote Page 37 of 107


Republic v. Li Yao country are extremely tenuous, as it appears that his intention was always to
remain in Guatemala. He obtained naturalization in Liechtenstein only to
William Li Yao was naturalized as a Filipino citizenship. The OSG sought to substitute his status as a national of a belligerent state with that of a neutral
cancel his naturalization on the ground that it was obtained through state. Guatemala is under no obligation to recognize a nationality granted
fraudulent means. Li Yao was alleged to have evaded the payment of income under such circumstances. Liechtenstein’s claim is thus inadmissible.
taxes from 1946-1951. The CFI cancelled his certificate of naturalization.
Oh Hek How v. Republic
HELD: The cancellation of the certificate was valid. A certificate of
naturalization may be cancelled if it is subsequently discovered that the Oh Hek How applied for naturalization in the Philippines. He moved to be
applicant obtained it by misleading the court upon any material fact. It can be allowed to take his oath, and did so even before the court ordered the same.
cancelled even thought the ground arose after the issuance of the certificate. The Republic moved to cancel the certificate on this ground. Acting on the
The principle of res judicata is inapplicable to naturalization proceedings as it motion, the trial court issued a new order authorizing Oh Hek How to take his
is not a judicial adversarial proceeding. oath. Another certificate was issued to validate the first.

E. PROBLEMS IN APPLYING THE NATIONALITY PRINCIPLE HELD: Oh Hek How was not validly naturalized. Under §12, CA 473, the
petitioner must “solemnly swear” that he renounces absolutely and forever all
1. DUAL OR MULTIPLE CITIZENSHIP allegiance and fidelity to any foreign… state or sovereignty, and particularly to
• Considering the principles of the Hague Convention, it will be possible the state of which he is a subject or citizen. Here, there is no showing that
that a person can be claimed as a national of two or more states. petitioner validly renounced his citizenship in accordance with the laws of
• If a child is born to parents whose national laws follow jus sanguinis China. As a consequence, he cannot be naturalized until he has obtained the
in a country that follows jus soli, such child will have dual nationality. previous permission of the Minister of the Interior of China.
• A Filipino who marries an alien MAY acquire the latter’s citizenship if
his/her national law so allows. Mercado v. Manzano
o GENERAL RULE: PH citizenship retained.
o EXCEPTION: Renunciation by oath of allegiance or express Mercado and Manzano were both candidates for Vice Mayor of Makati.
renunciation. Manzano garnered the highest number of votes but his proclamation was
• In the determination of the rights of an individual who may claim suspended because Mercado filed a petition claiming that Manzano was
multiply nationality in a third state, the ICJ applied the principle of actually a US citizen. The COMELEC found that he was a dual citizen, thus he
“effective nationality.” is disqualified under §40 (d) of the LGC. COMELEC en banc reversed and held
that Manzano was qualified to run.
Nottebohm Case (Liechtenstein v. Guatemala)
HELD: Manzano is not disqualified. The phrase “dual citizen” in §40 (d) must
Nottebohm was a German national. Despite moving to Guatemala and be understood as referring to dual allegiance. While dual citizenship is
residing there for 34 years, he retained family and business connections in involuntary, dual allegiance is not. Therefore, the latter must be subjected to
Germany. He applied for naturalization in Liechtenstein, which was granted. strict processes with respect to the termination of their status. For dual
After this, he returned to Guatemala where he stayed until 1943. When he tried citizens, it should suffice that they elect Philippine citizenship to terminate
to return after the war, Guatemala refused to admit him. Liechtenstein filed their status as dual citizens. Here, Manzano elected Philippine citizenship
suit against Guatemala before the ICJ seeking reparations. Guatemala’s upon filing of his COC.
defense: Nottebohnm did not properly acquire Liechtenstein nationality, thus,
the country cannot espouse his claim.

HELD: Nottebohm is not a citizen of Liechtenstein. His connections with the

Ish Guidote Page 38 of 107


2. STATELESSNESS
• De jure statelessness – refers to an individual who has been stripped HELD: Kookooritchkin was stateless. While he stated that he was a Russian
of his nationality by his own former government without having an citizen in his application for naturalization, the Empire of Russia has ceased
opportunity to acquire another. to exist since it was overthrown in 1917. Also, petitioner disclaims allegiance
o Problem began in WWII. or connection with the Soviet government established after the overthrow of
o Became serious during the Nazi regime and in the USSR. the Czarist government. Petitioner left Russia to reside in the Philippines.
• De facto statelessness – refers to an individual possessed of a Here, he established a home and a family. It would be beyond comprehension
nationality but whose country does not give him protection outside its to conclude that petitioner could feel any bond of attachment to the Soviet
own territory. dictatorship.
o Commonly referred to as refugees.
o Post-Vietnam war: people from Vietnam, Cambodia, Laos Chapter X
• 1951 Geneva Convention on the Status of Refugees DOMICILE
o Ratified by 54 states.
o Provided some basic rights of stateless persons. A. DEFINITION
• 1954: UN Conference on the Elimination or Reduction of Future • Domicile is defined by:
Statelessness o Municipal law (Philippine law); and
• 1961: Convention on the Reduction of Statelessness o Private international law.
o Individual would not lose his nationality despite marriage, • As to municipal law: NCC50 provides—
divorce, adoption, naturalization, expatriation.
o Prohibits states from depriving their nationals of their identity Article 50. For the exercise of civil rights and the fulfillment of civil
as punishment. obligations, the domicile of natural persons is the place of their
o Objective is to remedy the situation of children born without habitual residence. (40a)
acquiring any nationality.
! Occurs when a child is born in a jus sanguinis • As to conflict-of-laws:
jurisdiction of parents whose national laws follow jus o Restatement – the place with which a person has a settled
soli. connection for certain legal purposes, either because his
! Jus sanguinis country would have to extend home is there or because that place is assigned to him by
nationality to a person born within its territory if he law.
would otherwise be stateless. o Justice Story – the place of his true, fixed permanent home
! Jus soli country would extend its nationality to a and principal establishment, and to which, whenever he is
person who would otherwise be considered stateless absent, he has the intention of returning.
when one of his parents is a citizen of the contracting • Domicile has acquired a technical meaning; a person may be living
state. somewhere but domiciled elsewhere.
• Stateless persons can be naturalized if they possess all the • To acquire a domicile, there must be:
qualifications, save that of reciprocity. o Intention to make a place one’s domicile; and
o Physical presence.
Kookooritchkin v. Solicitor General • On the other hand, residence simply requires bodily presence of an
inhabitant in a given place.
Petitioner first came to the Philippines in 1923 as a member of the White • Koh v. CA: “…the term domicile is not exactly synonymous in legal
Russians. He married a Filipina with whom he had one son. In 1941, he contemplation with the term residence, for it is a established principle
applied for naturalization. The trial court granted the petition. Hence, this in Conflict of Laws that domicile refers to the relatively more
appeal by the Solicitor General.

Ish Guidote Page 39 of 107


permanent abode of a person while residence applies to a temporary B. MERITS AND DEMERITS OF DOMICILE
stay of a person in a given place…” • Merits:
o Domicile is the very purpose for having a personal law.
Caasi v. Court of Appeals ! The relationship between an individual and the place
where he has his permanent home is an adequate
Miguel defeated Caasi for the position of Mayor of Bolinao, Pangasinan. Caasi basis for him to exercise rights therein and for the
sought to have Miguel disqualified on the ground that the latter is a green state to impose duties on him.
card holder. The COMELEC dismissed the petition. ! Right to invoke the protection of the laws,
responsibility of sharing the costs of government.
HELD: Miguel is not a resident of Bolinao, Pangasinan. §68 of the Omnibus o Domicile is suitable for places having a federal system of
Election Code requires waiver of the candidate’s status as a permanent government, since the domiciliary law is the law of the place
resident/immigrant of a foreign country. Mere filing of a COC is insufficient; where the person lives.
there must be other acts independent of and prior to the filing of the COC • Demerits:
which would manifest such waiver. Since Miguel admitted that he had a green o Domicile is not ascertainable without going to court to
card, he had to prove that he waived his status as an immigrant. This, he establish the existence of animo manendi.
failed to do. Furthermore, when he ran as Mayor, he had only been residing in o The notion of domicile differs widely.
Bolinao for 3 months. ! Some states hold that it is synonymous with
residence.
Uytengsu v. Republic ! Some attribute different meanings to it depending on
the purpose.
Uytengsu was born in the Philippines of Chinese parents. He remained here o Attenuated connection; same problem with nationality.
until he graduated college but pursued further studies abroad. In 1950, he ! Domicile is fixed at birth.
returned to the Philippines and applied for naturalization. While the ! There may be no significant ties between the person
application was pending, he took up a postgraduate degree in the US. Upon and the place.
his return the following year, the CFI of Cebu granted the petition for ! Individual’s relations with the state may be so diluted
naturalization. Hence, this appeal by the Republic assailing his compliance that it no longer serves as valid basis for personal
with the residency requirement. law.
• GENERAL RULE: Philippines follows the nationality law theory.
HELD: Petitioner did not reside in the Philippines for the purpose of • EXCEPTIONS: Domiciliary law is adverted to in the following
naturalization. In this context, residence is NOT synonymous with domicile. situations—
To be a resident, one must be physically present in that place. o Cases where the litigant is an alien who comes from a
country following the domiciliary principle; his personal
RESIDENCE DOMICILE status, capacity, condition and family rights are governed by
Involves the intent to leave when the What is controlling is intent to remain the law of his domicile;
purpose for which he has taken up his (animo manendi) o Stateless persons;
abode ceases
o Those with dual nationalities;
An act An act coupled with an intent
o Alien domiciled in the Philippines executes a will abroad;
Derived from residendi or “a temporary Derived from domus meaning “home”
! Follow formalities prescribed by the law of his
place of remaining”
domicile.
o Revocation of a will outside the Philippines.
Uytengsu cannot be exempted from the requirement of filing a Declaration of
! Must be done in accordance with domiciliary law of
Intention. Actual and substantial residence, not legal residence or domicile, is
the testator (NCC829).
essential to the enjoyment of the benefits of said exemption.

Ish Guidote Page 40 of 107


C. GENERAL RULES ON DOMICILE Dissents: Petitioner lost her domicile of origin by operation of law upon her
marriage. What was revived after Mr. Marcos’ death was not the domicile of
1. No person shall be without a domicile. origin but the power to acquire her own domicile.

2. A person cannot have two simultaneous domiciles. Ujano v. Republic


• The very purpose of identifying the domicile is to establish a
connection between a person and a definite legal system. Ujano was a Filipino citizen who was later naturalized in the US. He returned
• In practice, courts may attribute different meanings to domicile to the Philippines (admitted for a temporary stay) and applied for
depending on the purpose. reacquisition of Filipino citizenship. The CFI denied the petition for failure to
o Can be domiciled in one state for purposes of divorce but not comply with the six-month residency requirement.
for running for public office.
• It is more accurate to say that “a person can only have one domicile HELD: Petitioner failed to satisfy the residency requirement. Residence, in this
for a given purpose or a given time under the law of a particular state, case, has been interpreted to mean the actual or constructive permanent
but it should not be assumed that that determination will be binding home otherwise known as legal residence or domicile. Since petitioner was
on other states or on the same state for other purposes. admitted for a temporary stay, he cannot be said to have established his
• Sometimes residence is held to be synonymous with domicile. domicile here.

3. Domicile establishes a connection between a person and a particular In Re Dorrance’s Estate


territorial unit.
John Dorrance was originally from Pennsylvania. He worked for the
4. The burden of proving a change of domicile is upon whoever alleges that a Campbell’s Soup Company in New Jersey, so he moved there with his wife.
change has been secured. They later moved to Philadelphia, then back to New Jersey where they bought
• Without overwhelming evidence, courts will decide in favor of a country house. Several years later, Dorrance bought property again in
continuance of an existing domicile. Pennsylvania and lived there until his death. In the estate proceedings, it was
contended that Dorrance was a resident of Pennsylvania. The court found
that his residence was in New Jersey.
Romualdez-Marcos v. Commission on Elections
HELD: Dorrance was domiciled in Pennsylvania at the time of his death. To
Imelda Marcos filed her Certificate of Candidacy for Representative of the establish a domicile, there must be both factual residence and an intention of
First District of Leyte. She indicated that she had been residing there for 7 remaining. The court is not convinced that Dorrance was a New Jersey
months. Thus, the incumbent, Montejo, filed a petition for disqualification resident simply because he accumulated his fortune there. By birth, he was a
averring that Marcos failed to comply with the residency requirement under Pennsylvanian. He even lived there for three years after his marriage before
the Constitution. The COMELEC cancelled her COC. living in New Jersey. When he returned, he did not only resume his domicile of
origin; he purposely made his home in a neighborhood more congenial to his
HELD: Marcos was a resident of the First District of Leyte for at least one year family. Mere declarations that his residence was in New Jersey cannot
preceding the day of the election. For election purposes, residence is prevent the acquisition of domicile in Pennsylvania. A declaration of domicile
synonymous with domicile. It is the fact of residence, not a statement in the not followed by acts in accordance with such declaration will not be regarded
COC, which ought to be decisive in determining whether an individual has as conclusive, but will yield to the intent wich the acts and conduct of the
complied with the residency requirement. Petitioner’s residence of origin is person clearly indicate.
Tacloban, Leyte. She did not ipso facto lose her domicile upon her marriage.
Even assuming that she did, she acquired the right to fix a new one upon his
death. Her acts show her intent to reacquire her domicile of origin.

Ish Guidote Page 41 of 107


D. KINDS OF DOMICILE o Motive is only relevant in determining the genuineness of
intent to acquire a new domicile.
1. Domicile of origin
• Person’s domicile at birth. Velilla v. Posadas
• Traditionally, legitimate child follows father’s while illegitimate child
follows mother’s. Moody was an American residing in Manila. He died in India. He executed a
• Upon emancipation, can acquire domicile of choice. will in the Philippines bequeathing all his property to his sister. Petitioner,
administrator of Moody’s estate, protested the CIR’s assessment of
2. Domicile of choice inheritance taxes. It is argued that inasmuch as Moody was not a resident of
• Also known as voluntary domicile. the Philippines at the time of his death, no inheritance taxes may be imposed.
• Freely chosen by a person sui juris.
• There must be: HELD: Moody was a resident of the Philippines at the time of his death. There
o Physical presence in the new place; and is no statement of Moody, written or oral, that he adopted a new domicile
o Unqualified intention to make that place one’s home. when he was absent from Manila. His statement that he did not intend to
return to Manila does not prove that he established a domicile elsewhere, for
Domicile of origin v. Domicile of choice he merely wanted to evade confinement in the Culion Leper Colony. To effect
abandonment of one’s domicile, there must be deliberate and provable choice
• Domicile of origin is said to be more enduring and less easily shaken
of a new domicile coupled with actual residence in the place chosen with a
off than domicile of choice.
declared or provable intent that it should be one’s fixed and permanent place
• Domicile of origin is not lost by mere abandonment and remains until
of abode, one’s home.
a domicile of choice is acquired.
• Upon the other hand, domicile of choice can be lost by the removal of
• Did the Court correctly apply the principles:
intent even before a new domicile is acquired.
o As to the letter stating that he did not want to return to the
• Reverter/revival doctrine: One the domicile of choice is given up, it is
PH, is this not sufficient evidence of animo non revertendi?
presumed that the domicile of origin is revived until a new one is
o As to the motive for leaving the PH?
acquired.
o As to the length of time spent in Paris?
o Criticized because it violates the principles that—
! US courts ruled that momentary presence in the new
! Domicile continues until a new one is acquired;
domicile constitutes substantial compliance with the
! Domicile is acquired upon the concurrence of act and
presence requirement.
intention.
• Degree of permanence of abode – trend is to state intention in a
White v. Tennant
negative way.
o As long as there is no intention to return to the old domicile, a
Michael White and his wife lived on a farm in West Virginia. He agreed to sell
new domicile is created, whether the intention is to remain for
his farm so they could move permanently to Pennsylvania. Upon arriving in
the rest of one’s life or indefinitely or for the time being.
Pennsylvania, they found the place damp and uncomfortable. The wife then
• Length of time the person has actually lived in the new domicile is became afflicted with Typhoid fever. The spouses returned to West Virginia,
irrelevant. but Michael went to Pennsylvania every day to attend to his livestock. He, too,
o Only thing that matters is that the new domicile has been fell ill. Michael died in West Virginia. Michael’s widow was given his entire
selected and entered upon. estate in accordance with the laws of West Virginia. Under Pennsylvania law,
• Motive for change of domicile is immaterial. she would only be entitled to ½.
o Once a permanent abode has been established in a new
place, the courts will not weigh the ethical values of his HELD: At the time of his death, White was a domiciliary of Pennsylvania. If
motives.

Ish Guidote Page 42 of 107


domicile is established, mere temporary absence will not destroy it, however o Thus, a child whose mother remarries retains his old domicile
long continued. The facts show that White abandoned his domicile in West until he voluntarily changes it upon reaching the age of
Virginia with the intention not to return. He intended that his Pennsylvania majority.
home be his new home for an indefinite time. When they arrived there, it • Mentally disabled persons – presumed that they cannot acquire a
instantly became his domicile. There was a concurrence of intention to make domicile of choice because of inherent inability to decide where to
Pennsylvania his new domicile and the fact of abandonment of West Virginia make his home.
as his old domicile. o But if it is shown that the person is capable of understanding
his act and its consequences, he may be able to acquire a
3. Constructive domicile domicile of choice.
• By operation of law, a domicile is assigned to persons incapable of
choosing their own domicile. Special Problems in Domicile of Choice vis-à-vis Constructive Domicile
o Minors • Problems confronting acquisition of domicile of choice:
o Mentally disabled o People under compulsion;
o Married women o Married women seeking to acquire domicile separate from
• Minors – domicile automatically changes when father’s domicile their husbands.
changes. • People under compulsion – freedom of choice is an indispensable
o Take the domicile of their mother upon their father’s death. criterion.
! This is the prevailing rule in many countires as a o A person under compulsion is in that place not as a result of
consequence of the application of laws on parental his volition.
authority. o Examples: military personnel, prisoners, PWDs confined in
o FC212: institutions.

In case of absence or death of either parent, the parent Carballo v. Republic


present shall continue exercising parental authority. The
remarriage of the surviving parent shall not affect the Carballo was a member of the US Air Force. He was stationed in Clark. There,
parental authority over the children, unless the court appoints he met his wife Graciela. They sought to adopt one Norma Lee Caber, who
another person to be the guardian of the person or property of they have reared since birth. The CFI denied the petition for adoption on the
the children. (n) ground that Carballo, a non-resident alien, was disqualified from adopting
under the Civil Code.
o Drastically different from NCC328:
HELD: Carballo was not a resident of the Philippines. Residence must be
The mother who contracts a subsequent marriage loses the chosen freely and voluntarily. Thus, presence in a place not of a person’s
parental authority over her children, unless the deceased voluntary choice and without intention to remain there indefinitely does not
husband, father of the latter, has expressly provided in his will make him a resident of that place. Since petitioner’s stay in the Philippines is
that his widow might marry again, and has ordered that in temporary, he is not qualified to adopt.
such case she should keep and exercise parental authority
over the children. • Recent US decisions: person should be allowed to prove acquisition
of domicile of choice if he shows intent to remain in the place even
o NCC333 provided that widow who remarries only regains after compulsion ceases.
parental authority should she become a widow again. • Compulsion is reduced to a factor which determines whether intent
exists.

Ish Guidote Page 43 of 107


• To hold otherwise would be to curtail the constitutionally protected
right to choose one’s domicile. HELD: Narcisa was a resident of Iloilo. GENERAL RULE: Wife follows domicile
of the husband. This theory is founded upon the identity of person and
• Married women – unity of identity of spouses; wife presumed to take interest between husband and wife. EXCEPTIONS:
domicile of husband. 1. When the theoretical unity of husband and wife is dissolved, as it is by
o This presumption is archaic and constitutes gender-based the institution of divorce proceedings;
discrimination. 2. Where the husband has given cause for divorce;
o FC69: 3. Where there is a separation of the parties by agreement;
4. Where there is a permanent separation due to desertion of the wife by
The husband and wife shall fix the family domicile. In case of the husband or attributable to cruel treatment by the husband;
disagreement, the court shall decide. 5. Where there has been a forfeiture by the wife of the benefit of the
husband’s domicile.
The court may exempt one spouse from living with the other Here, the husband has given cause for divorce.
if the latter should live abroad or there are other valid and
compelling reasons for the exemption. However, such • Wife may establish a separate domicile where she is justified in
exemption shall not apply if the same is not compatible with leaving her husband.
the solidarity of the family. (110a) • Modern view dispenses with the presumption that the wife’s domicile
is the same as her husband.
o No case yet deciding a controversy over the wife’s right to o Each party establishes his/her domicile independent of the
establish her own domicile. other.
o In Romualdez, it was ruled that the wife had the right to o Wife need not show that the husband has given cause for
acquire her own domicile after her husband’s death. divorce/legal separation to be able to fix her own domicile.

Go Chen and Go Lek v. Collector of Customs of Cebu Chapter XI


PRINCIPLES ON PERSONAL STATUS AND CAPACITY
Tan Bon was married to Go Tuan. They had two children, herein petitioners.
After Go Tuan died, Tan Bon remarried to another Chinese man. Tan Bon A. DEFINITION
came to the Philippines and was admitted as the wife of a Chinese merchant. • Personal status
She asked petitioners to come to the Philippines as well. o General: includes both condition and capacity;
o Specific:
HELD: Tan Bon cannot bring petitioners with her to the Philippines to lawfully ! Beginning and end of human personality;
reside here. She did not enter the Philippines through her own right but by ! Capacity to have rights in general;
virtue of the right of her second husband. Since petitioners are not children of ! Capacity to engage in legal transactions;
Tan Bon’s second husband, they are not entitled to enter. ! Protection of personal interests, family relations;
• Husband-wife
De La Vina v. Villareal and Geopano • Parent-child
• Guardian-ward
Narcisa Geopano and Diego De La Vina were spouses living in Negros ! Transactions of family law;
Oriental. Narcisa filed an action for divorce before the CFI of Iloilo citing • Marriage
Diego’s infidelity. Diego assailed the jurisdiction of the CFI of Iloilo inasmuch
• Divorce
as the conjugal home as in Negros Oriental. He claimed that Narcisa could
• Separation
not acquire a domicile in Iloilo prior to the dissolution of their marriage.
• Adoption

Ish Guidote Page 44 of 107


• Legitimation partnership. Moreover, since the spouses are US citizens, their status is
• Emancipation governed by US law, which law sanctions divorce. The contract cannot be
! Succession. said to be contrary to law, morals, good customs, public order or public policy.
• Testate
• Intestate B. LEGISLATIVE JURISDICTION DISTINGUISHED FROM JUDICIAL
• “Status” was taken from the Roman doctrine of status libertates JURISDICTION
(freedom), status civitates (citizenship) and status familiae (position • Status, once established by the personal law of the party, is given
as head of house or person subject to pater familia). universal recognition.
• No exact meaning and is nebulous because the law does not • Universality is the basic principle of status in PrIL.
recognize absolute legal characteristics inherent in every person. o The particular status brought into existence by the law of
• Juridical capacity – the fitness of man to be the subject of legal country A must have attributed to it by country B the self-
relations. same personal capacity or incapacity, the self-same rights
• Capacity to act – the power to do acts with juridical effects. and duties, which country A conferred or imposed upon that
• Both must concur to produce complete civil capacity. person, natural or artificial.
o The court of country B can introduce into that status no
• Civil Code provides:
exceptions or qualifications unknown to the status of its
creation unless they are bound to by some definite and
Article 37. Juridical capacity, which is the fitness to be the subject of
protected rule of municipal law.
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 • Aliens can sue and be sued in the PH subject to PH procedural law.
legal effect, is acquired and may be lost. (n) o But their status and capacity is to be determined by our
courts using their personal law.
• Status and capacity of a person is determined by the national law of
Barnuevo v. Fuster
such person following NCC15.
o In case of aliens, their national law applies if their country
Fuster and Yanez were Spanish subjects who were married in Spain. They
follows the nationality principle.
executed an agreement to separate and live apart. Yanez later filed for divorce
o If their country follows the domiciliary principle then the
before the CFI of Manila. The court granted the petition.
domiciliary law applies.
HELD: The CFI had jurisdiction to decree the divorce now on appeal. The
Recto v. Harden
authority of jurisdictional power of courts to decree a divorce is not
comprised within the personal status of the husband and wife, rather, it is a
Mrs. Harden hired Claro M. Recto to represent her in a case against her
matter of public or political law of the nation. The court had jurisdiction over
husband. The case was for support and preservation of her rights in the
the persons of the parties, as they were both residents of Manila. It also had
conjugal partnership, as she was contemplating filing for divorce. Mrs.
jurisdiction over the subject matter, because CFIs of the Philippine Islands
Harden agreed that Recto would be paid 20% of the value of the conjugal
have the power and jurisdiction to try actions for divorce.
partnership after litigation. The court ruled in favor of Mrs. Harden. Pending
appeal, the spouses compromised. Recto was not paid attorney’s fees, thus,
he filed a complaint for collection. The spouses’ defense is that the contract • At present, PH courts no longer try actions for divorce even if brought
is void because its purpose is to secure a divorce decree in violation of by persons whose national laws allow it.
Philippine law. • Contrary to public policy.

HELD: The contract between Mrs. Harden and Atty. Recto is valid. The case
was filed merely to protect the interest of Mrs. Harden in the conjugal

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C. BEGINNING AND END OF PERSONALITY D. ABSENCE
• Determination of beginning is referred to individual’s personal law. • Domestic laws of various countries do not treat absentees alike.
• Examples: • Ways to deal with this problem:
o German CC: upon completion of the person’s birth. o Rebuttable presumption that a person is dead after absence
o Spanish CC: must be alive for at least 24 hours. for a specified number of years;
• Our Civil Code provides: o Person’s unexplained absence is judicially investigated and
established which results in legal effects similar to those of
Article 40. Birth determines personality; but the conceived child shall death; and
be considered born for all purposes that are favorable to it, provided it o Judicial decree shall be issued declaring the person dead
be born later with the conditions specified in the following article. before legal effects of death take place.
(29a) • Philippine laws follow the rebuttable presumption:

Article 41. For civil purposes, the foetus is considered born if it is Article 390. After an absence of seven years, it being unknown
alive at the time it is completely delivered from the mother's womb. whether or not the absentee still lives, he shall be presumed dead for
However, if the foetus had an intra-uterine life of less than seven all purposes, except for those of succession.
months, it is not deemed born if it dies within twenty-four hours after
its complete delivery from the maternal womb. (30a) The absentee shall not be presumed dead for the purpose of opening
his succession till after an absence of ten years. If he disappeared
• Tolentino: before birth, fetus is not a person but a part of the internal after the age of seventy-five years, an absence of five years shall be
organ of the mother. sufficient in order that his succession may be opened. (n)
o Expectancy that it will be born, thus the law affords it
protection. Article 391. The following shall be presumed dead for all purposes,
o Its legal existence, if it should be born alive, retroact to the including the division of the estate among the heirs:
moment of its conception.
• Geluz v. CA: No cause of action for damages on behalf of unborn (1) A person on board a vessel lost during a sea voyage, or an
child, because CC states that it should be subsequently born alive. aeroplane which is missing, who has not been heard of for four years
o But damages may be awarded to the parents for such since the loss of the vessel or aeroplane;
damage directly sustained by them.
• As civil personality is commenced at birth, it is extinguished by death. (2) A person in the armed forces who has taken part in war, and has
• Declaration of death by a competent court is considered valid for all been missing for four years;
purposes.
• Some rights and obligations are extinguished by death but others are (3) A person who has been in danger of death under other
transmitted to his heirs/successors. circumstances and his existence has not been known for four years.
(n)
• Limjoco v. Intestate Estate of Fragrante:
o Purpose of an estate as an artifical person is to enable proper
disposition of the assets of the deceased. • Declaration of death is required for certain purposes, such as a
o Bill of Rights makes no distinction between natural and subsequent marriage under FC41.
artificial persons as to the due process clause and the right o Otherwise, marriage void.
against unreasonable searches and seizures. o Periods reduced to 4 and 2 years, considering modern means
o Pending application for a CPC is a right that survived the of communications.
decedent’s death. • Legal effects of absence and restrictions on the absentee’s capacity
o Estate can still be considered the applicant for such CPC. to act are determined by his personal law.

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E. NAME o Nearly impossible task—investigate the personal law of
• Beale: Determination of name is not a problem of status because a another to see if his capacity to act is limited.
person is traditionally free to assume a name and change it at will. • Exceptions to the general rule:
• At present: Name cannot be changed without judicial intervention. o Torts – law of the place of the tort;
• NCC364-366 govern use of surnames. o Restrictions on the contracting capacity of a married woman
• NCC376 provides that no person can change his name or surname – can be governed by law governing the spousal relations.
without judicial authority. • Another problem arises when a person who is fully capacitated under
• Grounds allowed under jurisprudence: his personal law enters into a contract to be performed in a foreign
o Ridiculous, tainted with dishonor, extremely difficult to country that does not consider him capable of contracting.
pronounce;
o Change is necessary to avoid confusion; Insular Government v. Frank
o Right to new name is consequence of change in status;
o Sincere desire to adopt a Filipino name to erase signs of The petitioner entered into an employment contract with Frank in Chicago. He
former alien nationality which unduly hamper social and started performing his duties as a stenographer but later abandoned his post
business life. and refused to comply with the terms of the contract. Petitioner filed an
• Padilla v. Republic: name is a reflection of one’s paternity. action to hold Frank liable for travel expenses in accordance with the
o Affects status of child as legitimate or illegitimate. contract. Frank claims that he was a minor at the time he executed the
o Confusion as to paternity is a valid ground for denial of contract, thus, the contract is void. CFI ruled for plaintiff.
petition for change of name.
• WoN change of name is valid depends on alien’s personal law. HELD: Frank is liable under the contract. The contract was entered into in
Illinois. Under the laws of that state, Frank was already an adult and had full
F. AGE OF MAJORITY authority to contract. Matters bearing upon the execution, interpretation and
• Legal disability attached to minority and rights recognized upon validity of a contract are governed by lex loci contractus.
attainment of age of majority are aspects of personal status.
• Individual’s personal law determines whether he has attained the age • Court applied lex loci contractus but the result would have been the
of majority. same had it applied Frank’s personal law.
• Once emancipated, parental authority is terminated and the person is • Difficulties attached to determining what the individual’s personal law
qualified and responsible for all acts of civil life, subject to certain is and the issue of WoN he should be governed by such law have led
exceptions. courts to compromise.
o Parents’ continued observance of responsibilities under Art. • Distinctions must be made between:
46, PD603. o Situations which call for the law of the contract as demanded
• RA 6809 lowered the age of majority from 18 to 21. Parental consent by local interests (e.g. need for stability in commercial
to contract marriage required until age 21. transactions), and
o Those where protective policies are enshrined in one’s
G. CAPACITY personal law (e.g. transactions involving family relations).
• Ability to act with legal effects is governed by personal law.
o It is best qualified to decide what restrictions should be
imposed on the individual.
• Incapacities attached to legal status follow the individual wherever he
goes.
• Those who contract with another must first ascertain his legal
capacity.

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PART FOUR: CHOICE OF LAW PROBLEMS ! Solemnizing officer
! Two witnesses of legal age
o That they take each other as husband and wife,
Chapter XII
o Signed or marked by the contracting parties and their
CHOICE OF LAW IN FAMILY RELATIONS
witnesses, and
o Attested by the person solemnizing the marriage.
• Problems in conflict of laws began from the time people ventured o It is a special contract because:
beyond their immediate surroundings and entered into transactions ! It must be entered into by a man and a woman;
and relations that were necessarily connected to more than one legal ! They must be at least 18 years of age;
system. ! It is solemnized by an officer specifically authorized
o Interstate/international families whose family relations span by law;
the globe. ! It is a permanent union unless—
• Marriage between a man and a woman in a country other than that of • One of the parties dies;
their nationality—questions may arise as to: • The marriage is declared void or annulled.
o Personal and property relations; ! It cannot be abrogated, amended or terminated by
o Status and rights of their children one or both parties at will;
! Use of the father’s surname; ! Nature and consequences are governed by law and
! Right to inherit. are not subject to stipulation;
• Family law is an area of law which reflects strong state policies ! Violation of marital obligations may give rise to penal
anchored on values highly held by its society. or civil sanctions.
• Emotions rule but once created, family relations give rise to grave • Breach of ordinary contract entitles party to
individual and societal concerns. damages.
• Family law is thus one of the most complicated and sensitive areas to
be dealt with from a conflict of laws perspective. 1. PHILIPPINE POLICY ON MARRIAGE AND THE FAMILY

A. MARRIAGE §2, Art. XV, 1987 Constitution. Marriage, as an inviolable social institution, is
the foundation of the family and shall be protected by the State.
Article 1, Family Code. Marriage is a special contract of permanent union
between a man and a woman entered into in accordance with law for the • In order to give stability to the institution of marriage, there is a
establishment of conjugal and family life. It is the foundation of the family presumption of validity of marriage as embodied in NCC220:
and an inviolable social institution whose nature, consequences, and
incidents are governed by law and not subject to stipulation, except that In case of doubt, all presumptions favor the solidarity of the family.
marriage settlements may fix the property relations during the marriage Thus, every intendment of law or facts leans toward the validity of
within the limits provided by this Code. (52a) marriage, the indissolubility of the marriage bonds, the legitimacy of
children, the community of property during marriage, the authority of
• Full significance of this definition is realized when juxtaposed with parents over their children, and the validity of defense for any member
NCC15. of the family in case of unlawful aggression.
o Lex nationalii governs questions of family rights and duties,
status, conditions and capacity. • Purpose of the principles:
• As a contract: o To guide the courts;
o Marriage is a declaration of the contracting parties in the o To further strengthen the solidarity of the family; and
presence of—

Ish Guidote Page 48 of 107


o To impress upon its members the importance of the family married in China in 1935. CFI favored petitioner after finding that the evidence
and the paramount interest the state has in preserving it. did not sufficiently establish the Chinese marriage. Respondent claims that
the marriage was adequately proven by a matrimonial letter.
2. EXTRINSIC VALIDITY OF MARRIAGE
• Many conflict rules distinguish between extrinsic and intrinsic validity HELD: The marriage of the decedent in China was not sufficiently proven. To
of marriage. establish the validity of a foreign marriage it is necessary to prove (1) the
• Extrinsic – referred to lex loci celebrationis. foreign law as a question of fact, and (2) the alleged foreign marriage by
o Formalities convincing evidence. Here, there is lacking proof so clear, strong and
o External conduct required of the parties or of third persons unequivocal to produce a moral conviction of the existence of the alleged
especially of public officers, necessary to the formation of a prior Chinese marriage.
legally valid marriage.
• Hague Convention: Formal requirements for marriage are governed by People v. Mora Dumpo
the law of the state of celebration.
• GENERAL RULE: All states recognize as valid marriages celebrated in Moro Hassan and Mora Dumpo were legally married under Muslim rites.
foreign countries provided they comply with the legal formalities Dumpo remarried without having her first marriage dissolved, so Hassan
prescribed there. charged her with the crime of bigamy. Dumpo was convicted. She now
• Formal requisites under FC3: appeals her conviction on the ground that her second marriage was void ab
initio as her father’s consent thereto was not obtained.
The formal requisites of marriage are:
HELD: Dumpo’s second marriage is void. While no judicial notice may be
(1) Authority of the solemnizing officer; taken of the formal requisites for the validity of a Muslim marriage, Dumpo
presented the testimony of an Imam to prove that the consent of the bride’s
(2) A valid marriage license except in the cases provided for in father is indispensable to the validity of a marriage. The state did not present
Chapter 2 of this Title; and any controverting evidence. Moreover, Dumpo’s father categorically declared
that he did not consent to his daughter’s second marriage. Since the second
(3) A marriage ceremony which takes place with the appearance of marriage cannot be considered valid, there is no justification to hold Dumpo
the contracting parties before the solemnizing officer and their guilty of the crime charged.
personal declaration that they take each other as husband and wife in
the presence of not less than two witnesses of legal age. (53a, 55a) Wong Woo Yu v. Vivo

• Furthermore, ¶1, Art. 26 provides: Petitioner sought admission to the Philippines as the wife of a Filipino,
Perfecto Blas. She alleged that they were married in China by a village leader.
All marriages solemnized outside the Philippines, in accordance with Petitioner was admitted to the Philippines as a non-quota immigrant, but as
the laws in force in the country where they were solemnized, and valid the Board of Special Inquiry changed its composition, the decision was
there as such, shall also be valid in this country, except those reversed.
prohibited under Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a)
HELD: Petitioner was not able to prove her marriage to Blas. She should have
Adong v. Cheong Seng Gee presented Chinese law on the matter. Since she did not do so, the doctrine of
processual presumption applies. Under Philippine law, a village leader is not
Cheong Boo, a Chinese subject, died intestate in Zamboanga. There are two among the persons authorized to solemnize marriages. Hence, her marriage
conflicting claimants to his estate: petitioner, his alleged wife, and to Blas cannot be recognized in this jurisdiction.
respondent, an alleged legitimate child of the decedent and Tan Dit who were

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Apt v. Apt • Philippine law requires:
o Legal capacity – must be at least 18 years old, without legal
Petitioner and respondent are German nationals of Jewish origin. Respondent impediments;
moved to Argentina. He wrote to petitioner proposing marriage, and she o Consent freely given in the presence of the solemnizing
accepted. Consequently, a proxy marriage was celebrated in Argentina officer.
between respondent and an agent of petitioner (with SPA executed before a ! Matrimonial consent means that the parties are at
London notary). Petitioner later filed for declaration of nullity of marriage. least, not ignorant that the marriage is a permanent
Under English law, petitioner’s domiciliary law, the marriage would be void. union.
But under Argentinian law, proxy marriages are recognized. • In mixed marriages, the law governs the substantive validity of
marriage is the national law of the parties.
HELD: The marriage is valid. Celebration of marriage by proxy is a matter of • FC38 enumerates the marriages that are void on the grounds of
form, thus governed by lex loci celebrationis. public policy:

• NCC71 provided that bigamous, polygamous and incestuous The following marriages shall be void from the beginning for reasons
marriages were exceptions to the rule of lex loci celebrationis. of public policy:
• FC26 expanded the exceptions to 16:
1. Either or both parties are below 18 years of age; (1) Between collateral blood relatives whether legitimate or
2. It is bigamous or polygamous; illegitimate, up to the fourth civil degree;
3. A subsequent marriage is performed without recording in the
Civil Registry and Registry of Properties the judgment of (2) Between step-parents and step-children;
annulment or declaration of nullity of the first marriage, the
partition and distribution of the properties of the spouses and (3) Between parents-in-law and children-in-law;
the delivery of the children’s presumptive legitimes;
4. Mistake as to the identity of the contracting party; (4) Between the adopting parent and the adopted child;
5. One of the parties was psychologically incapacitated to
comply with the essential marital obligations; (5) Between the surviving spouse of the adopting parent and the
6. Marriage is incestuous; adopted child;
7. Marriage is void by reason of public policy.
• These exceptions relate to the capacity of parties to enter into the (6) Between the surviving spouse of the adopted child and the
marriage, therefore substantive. adopter;
o Personal law of the parties (national law of Filipinos) thus
governs. (7) Between an adopted child and a legitimate child of the adopter;
o They are exceptions to lex loci celebrationis because they are
governed by lex nationalii. (8) Between adopted children of the same adopter; and

3. INTRINSIC VALIDITY OF MARRIAGE (9) Between parties where one, with the intention to marry the other,
• Intrinsic – refers to capacity or the “general ability of a person to killed that other person's spouse, or his or her own spouse. (82)
marry, for instances defined by requirements of age and parental
consent, but does not refer clearly to an individual’s being permitted • Hague Convention allows a contracting state to refuse recognition of
to marry a specific person or person of a determinate class.” the marriage if:
• Municipal laws provide the substantive requirements of a valid o One of the spouses was already married;
marriage.

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o Spouses were related to each other, either by blood or by within the prohibition of natural law.
adoption, in the direct line or as brother or sister; Neither of the exceptions is applicable. While New York law declares to be
o One of the spouses had not attained the minimum age incestuous and void a marriage between an uncle and a niece, it does not
required for marriage nor acquired the necessary regulate marriages solemnized between its domiciliaries in another state
dispensation; where the marriage is concededly legal. The marriage between the Mays was
o One of the spouses did not have the mental capacity to not so offensive to the public sense of morality to a degree regarded generally
consent; with abhorrence.
o One of the spouses did not freely give consent to the
marriage. • Christianity prohibits polygamous and incestuous marriages—
doctrine must be confined to cases deemed incestuous by the
EAP: Always ask if the question involves essential or formal requisites of general consent of all Christendom.
marriage. • Court may withhold recognition of foreign marriage by invoking public
• If the issue is intrinsic validity (essential requisites), look at Art. 15, policy.
Civil Code. o Marriages which are manifestly incompatible with the ordre
• If the issue is extrinsic validity (formal requisites), look at Art. 26, par. public of the state of which the parties are nationals may be
1 of the Family Code. refused recognition.
o This rule should not apply where the question of marriage is
Sottomayor v. De Barros only incidental to the resolution of another issue.
• In Re Dalip Singh BIR’s Estate:
Sottomayor and De Barros were Portuguese subjects and first cousins. They o Singh died leaving two purported legal wives, both claiming to
got married in London. Portuguese law would classify their marriage as have married the decedent in Punjab over 50 years ago in
incestuous. Sottomayor sought to have the marriage declared void. The trial accordance with the laws of that state.
court refused to do so. o Court ruled that both marriages were valid.
o Decedent died in CA. Under the laws of CA, only the first wife
HELD: The marriage is void. Lex loci celebrationis governs issues relating to is the legal widow.
the validity of the marriage ceremony. However, personal capacity of the o Petitioners claim that both marriages should be declared as
parties must be governed by the lex domicilii. Since the parties are valid on the strength of CC63, similar to FC26.
Portuguese subjects, the laws of that country apply. o HELD: Polygamous marriages can be recognized in English
law as to confer on the wives the status of a wife, for
In Re: May’s Estate purposes of §10 of the British Nationality and Status of Aliens
Act or for the purpose of succession, and upon the children,
Sam and Fannie May were married in Rhode Island, but residents of New the status of legitimacy.
York. They decided to marry in Rhode Island because under New York law,
their marriage would be void, Fannie being Sam’s half-blood niece. After Marriages Celebrated by a Consular Official
Fannie’s death, one of the couple’s six children petitioned for the issuance of • Hague Convention: marriages celebrated by a diplomatic
letters of administration on the ground that the Mays’ marriage was void agent/consular official in accordance with state law shall be valid as
under New York law. The surrogate court agreed. long as it is not prohibited by the state of celebration.
• Under the FC, Philippine Consul General/Consul/Vice-Consul may
HELD: The marriage was valid. GENERAL RULE: Rights dependent upon perform a marriage between Filipino nationals as long as the formal
nuptial contracts are to be determined by the lex loci. EXCEPTIONS: and essential requisites are complied with.
1. Cases within the prohibition of positive law; and o Includes valid marriage license + publication and registration.
2. Cases involving polygamy or incest in a degree regarded generally as

Ish Guidote Page 51 of 107


o Also applicable to Filipino-Alien as long as the alien complies ! Immigration laws are still applicable and the marriage
with the requisites under his national law. does not excuse the alien from her failure to depart
o Additionally, the alien must present a Certificate of Legal the country upon the expiration of her extended stay
Capacity to Contract Marriage issued by his here as an alien.
diplomatic/consular office. • Restatement 2d: Wife who lives with her husband has the same
o If one is stateless, he must submit an affidavit setting forth domicile as his, except when special circumstances of the wife make
circumstances showing his legal capacity to marry in lieu of such result unreasonable.
the affidavit. o Previous chapter: constructive domicile assigned to wife
constitutes gender-based discrimination.
4. EFFECTS OF MARRIAGE
Property Relations of Spouses
Personal Relations Between the Spouses • Hague Convention: Property relations to be governed by—
• Includes: o Internal law designated by the spouses before the marriage;
o Mutual fidelity or
o Respect o Internal law of the state in which both spouses fix their first
o Support habitual residence.
o Cohabitation • Here, FC80 states:
o Support
o Right to use the husband’s surname In the absence of a contrary stipulation in a marriage settlement, the
• These are governed by the national law of the parties. property relations of the spouses shall be governed by Philippine
o If they are of different nationalities, generally, the husband’s laws, regardless of the place of the celebration of the marriage and
national law prevails as long as it is not contrary to law, their residence.
morals, good customs of the forum.
• FC69 provides: This rule shall not apply:

The husband and wife shall fix the family domicile. In case of (1) Where both spouses are aliens;
disagreement, the court shall decide.
(2) With respect to the extrinsic validity of contracts affecting
The court may exempt one spouse from living with the other if the property not situated in the Philippines and executed in the country
latter should live abroad or there are other valid and compelling where the property is located; and
reasons for the exemption. However, such exemption shall not apply
if the same is not compatible with the solidarity of the family. (110a) (3) With respect to the extrinsic validity of contracts entered into in
the Philippines but affecting property situated in a foreign country
o Valid reason: legal impediment of continued residence in the whose laws require different formalities for its extrinsic validity.
PH of the foreigner spouse. (124a)
o Djumantan v. Domingo: Filipino married an Indonesian
woman in Indonesia. They arrived in the PH with the intention • Such provision generally follows the rule of lex rei sitae (NCC16).
of staying. • Where only one of the spouses is Filipino, Philippine law would still
! HELD: There is no law guaranteeing aliens married to apply regardless of whether he or she later changes citizenship
Filipino citizens the right to be admitted, much less to (principle of immutability).
be given permanent residency, in the Philippines. o Hague Convention: applicable law continues notwithstanding
change of nationality or residence.

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B. DIVORCE AND SEPARATION o This practice is followed whether the choice-of-law approach
• Two kinds: used is traditional or policy-centered.
o Absolute
o Limited 1. DIVORCE DECREES OBTAINED BY FILIPINOS
• Absolute divorce – Termination of the legal relationship between the • Decrees of absolute divorce obtained by Filipinos abroad are of no
spouses by an act of law. validity and are not recognized in the PH.
• Relative divorce/legal separation – separation from bed and board • Marriage between Filipino and foreigner is susceptible to divorce if
which does not affect the dissolution of the marital ties. obtained only by the alien spouse.
o Modifies the incidents of the marriage; spouses no longer • ¶2, FC26 provides:
required to live with each other.
o Since the court may order the payment of support by one Where a marriage between a Filipino citizen and a foreigner is validly
spouse, it must have personal jurisdiction over such spouse celebrated and a divorce is thereafter validly obtained abroad by the
and the property it seeks to affect by its decree. alien spouse capacitating him or her to remarry, the Filipino spouse
• NO CONFLICT WHEN: Spouses are nationals of the same country, shall have capacity to remarry under Philippine law. (As amended by
domiciled and divorced there. Executive Order 227)
• When any one of those factors is governed by the laws of another
state, a conflict arises. • This provision has the effect of partial recognition of divorce.
o Problems: • If it is obtained by the Filipino spouse, it is of no effect.
! Recognition of decree • Rationale: uneven status of Filipino nationals whose alien spouses
! Division of marital property obtained divorce abroad and remarried other persons while the
! Claim to custody Filipino spouses remained married to them in the eyes of PH law.
! Provisions for support
• Most countries exercise divorce jurisdiction on the basis of: Tenchavez v. Escaño
o Domicile of one of the parties; or
o Matrimonial domicile. Escaño married Tenchavez without the knowledge of her parents. She later
• Rationale: Divorce, being a matter of concern of the state, should be filed for divorce in the US, and a Nevada court issued a divorce decree. She
governed by the law of the place where the person is most intimately remarried and acquired US citizenship. Back in the Philippines, Tenchavez
concerned, the place where he dwelleth and hath his home. filed for legal separation. Escaño pleaded the divorce granted by the Nevada
o Forum court must have substantive contract with the court. The trial court dismissed the action for legal separation but relieved
relationship which by its laws it will decide whether or not to Tenchavez from the obligation to give support.
dissolve.
• Hague Convention: Granting of divorce/separation must comply with HELD: The divorce granted by the Nevada court is not valid in the Philippines.
the national law of the spouses AND the law of the place where the At the time Escaño obtained the decree, she was still a Filipino citizen. Hence,
application for divorce is made. Art. 15 of the Civil Code applies. To recognize the foreign divorce would be in
• Codigo Bustamante/Siamese law: patent violation of the declared public policy of the State. Furthermore, it
o Right to divorce – national law of the spouses would result in discrimination in favor of wealthy citizens who can afford to
o Grounds – forum law, provided the parties were domiciled go abroad to get divorce. It is irrelevant that Tenchavez appeared before the
there. Nevada court. Mere appearance of a non-resident cannot confer jurisdiction
• Grounds are dictated by lex fori. where the court originally had none.
o Many states refuse to recognize a foreign ground for divorce
unless it is also a ground under forum law.

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Van Dorn v. Romillo Republic v. Orbecido III

Alice Reyes-Van Dorn, a Filipina, married Richard Upton, an American. They Orbecido and Villanueva, both Filipinos, were married in Ozamis City. They
obtained a divorce in the US. Thereafter, petitioner married Theodore Van had two children. Villanueva moved to the US with their son. Later, Orbecido
Dorn. In the Philippines, Upton filed a complaint for accounting before the learned that Villanueva was naturalized as a US citizen. She also obtained a
RTC of Pasay concerning alleged conjugal properties. Petitioner filed a divorce and married a certain Stanley. Cipriano thereafter filed a petition for
motion to dismiss and pleaded the foreign divorce which stated that they had authority to remarry before the RTC, invoking ¶2 of Art. 26, Family Code. The
no community property. The motion was denied. trial court granted the petition.

HELD: The divorce is valid in the Philippines. It is true that NCC15 prohibits HELD: Orbecido may remarry. On its face, ¶2, Art. 26 appears to apply only to
Filipinos from obtaining divorces. However, the alien spouse may validly do mixed marriages. Note however the CBCP’s comment that the provision
so provided such is allowed by their national law. Pursuant to US law, Upton discriminates against those whose spouses are Filipinos who divorce them
is no longer petitioner’s husband. To maintain that she is still married to him abroad. They cannot remarry while the spouses of foreigners who validly
cannot be just. Petitioner should not be discriminated against in her own divorce them abroad can. According to Sempio-Diy, the intent of the law is to
country. avoid the absurd situation where the Filipino spouse remains married to the
alien spouse who, after obtaining a divorce, is no longer married to the Filipino
Pilapil v. Ibay-Somera spouse. The twin elements for application of ¶2, Art. 26 are:
1. A valid marriage between a Filipino citizen and a foreigner; and
Pilapil, a Filipina, was married to Geiling, a German. The husband initiated 2. A valid divorce obtained abroad by the alien spouse capacitating him
divorce proceedings in Germany, while the wife filed an action for legal or her to remarry.
separation before the CFI of Manila. The German court granted the divorce. The reckoning point is not the citizenship of the parties at the time of the
Geiling later filed a criminal complaint for adultery against Pilapil. The latter celebration of the marriage, but their citizenship at the time the divorce is
filed a motion to quash, but the same was denied. obtained. Here, Cipriano has not adduced sufficient proof as to the foreign
divorce decree and the naturalization of Villanueva. Hence, his petition for
HELD: The trial court was without jurisdiction to try the criminal case. authority to remarry cannot be granted.
Adultery is a private crime which must be prosecuted by the offended spouse.
At the time Geiling filed the complaint, he was already divorced from EAP: The court arrived at the correct conclusion using the wrong legal basis.
petitioner. He being no longer the husband of Pilapil, had no legal standing to ¶2, Art. 26 applies only to mixed marriages. While the Court correctly ruled
commence the case. that the reckoning point is the parties’ citizenship at the time the divorce was
obtained, the applicable provision of law is Art. 15 of the Civil Code
Quita v. Court of Appeals (nationality principle) and not Art. 26 of the Family Code.

Fe Quita married Arthur Padlan in the Philippines. She went to California and San Luis v. San Luis
obtained a divorce. Quita remarried twice. Padlan died intestate in the
Philippines. During the estate proceedings, one Dandan asserted that she Felicisimo San Luis contracted three marriages. His first wife predeceased
was Padlan’s legitimate spouse. She presented the divorce decree between him, while his second wife, an American named Merry Lee, obtained a divorce
Quita and Padlan. in Hawaii. Felicisimo married his third wife, Felicidad, in California. After
Felicisimo died, Felicidad filed a petition for issuance of letters of
HELD: The case must be remanded for determination of Quita’s citizenship at administration. One of the children of the first marriage opposed alleging that
the time the divorce was granted. If she was a Filipino, Tenchavez would the marriage between Felicisimo and Felicidad was void for being bigamous.
apply and the divorce would be invalid. But if Quita was already an American, The trial court dismissed the petition on the ground that the divorce obtained
then the applicable ruling would be that in Van Dorn. by Merry Lee cannot be recognized in the Philippines. CA reversed.

Ish Guidote Page 54 of 107


he failed to include a copy of the Canadian law on divorce, the case must be
HELD: A Filipino spouse is capacitated to remarry by vitrtue of a decree of remanded to the RTC for futher proceedings.
absolute divorce obtained by an alien spouse. However, in this case, there is
no adequate proof as to the validity of the divorce and the validity of 2. VALIDITY OF FOREIGN DIVORCE BETWEEN FOREIGNERS
Felicisimo’s marriage to Felicidad under US law. The case must be remanded • Hague Convention: foreign divorce will be recognized in all
to the trial court for further reception of evidence. contracting states if, at the date of the institution of proceedings:
o Respondent/petitioner had his habitual residence there;
Bayot v. Court of Appeals o Both spouses were nationals of that state; or
o If only the petitioner was a national, he should have his
Vicente and Rebecca Bayot were married in Mandaluyong City. Rebecca was habitual residence there.
an American citizen, having been born in Guam to American parents. She • US:
obtained a divorce in the Dominican Republic. Rebecca subsequently filed a o State has the duty to recognize divorce pronounced by
petition for declaration of nullity of marriage under Art. 36 before the RTC. another state where both parties are domiciled there.
Vicente filed a motion to dismiss for failure to state a cause of action. The o If it is only the plaintiff, other conditions must be satisfied
trial court denied the MTD. (e.g. service of process to defendant).
o A divorce rendered by a foreign country is not subject to the
HELD: The petition for declaration of nullity should be dismissed. At the time full faith and credit clause, but would be recognized under the
Rebecca obtained the divorce, she was an American citizen. Even if she later same circumstances that a sister state’s divorce decree is
acquired Filipino citizenship, she chose her US citizenship to govern her given recognition.
marital relationship. She was bound by the laws of the US, a country that ! Jurisdiction of foreign court based on domicile.
allows divorce. It follows that as a result of the issuance of the divorce • PH:
decree, the marital bond between the spouses was severed. Rebecca o No specific provision.
therefore has no cause of action against Vicente. o Foreign divorce between foreigners should be recognized
under the principle of comity.
Corpuz v. Sto. Tomas ! Provided it does not violate a strongly held policy of
the Philippines.
Corpuz was a natural-born Filipino who became a naturalized Canadian
citizen. He returned to the Philippines and married Sto. Tomas. When he C. ANNULMENT AND DECLARATION OF NULLITY
discovered that his wife was having an affair, he instituted divorce • Also affects the status and domestic relations of the parties.
proceedings in Canada. A divorce decree was issued. Several years later, • Based on defects existing at the time of celebration of marriage.
Corpuz wished to marry another Filipina. He tried to register the divorce o In divorce, ground occurs after celebration.
decree with the Civil Registrar, but registration was refused. Corpuz then filed • For states whose choice-of-law approach is traditional, the grounds
a petition for judicial recognition of the foreign divorce. The RTC denied the follow lex loci celebrationis.
petition on the ground that ¶2 of Art. 26 can only be invoked by the Filipino • For those who follow the policy-centered approach, applicable law is
spouse. the law of the state of marital domicile.
o Has the most significant interest in the status of the spouses.
HELD: ¶2, Art. 26 does not extend to aliens the right to petition a Philippine
• In both approaches, lex fori plays no substantial role since the action
court for recognition of a foreign divorce. The substantive right is established turns on the validity of the marriage.
in favor of the Filipino spouse. Our courts cannot make a declaration as to the
• The following states can claim adequate jurisdictional basis to hear a
capacity of the alien spouse to marry in view of the nationality principle.
conflicts case:
Nonetheless, Corpuz is possessed of sufficient legal interest to enable him to
o State where marriage was celebrated;
file for recognition of the foreign divorce under the Rules of Court. But since
o State where parties have their marital domicile.

Ish Guidote Page 55 of 107


• Whealton v. Whealton: even a court which acquires only personal illegitimate, unless otherwise provided in this Code. (n)
jurisdiction over the parties can grant an annulment decree.
• Example of conflicts annulment case: • Personal law of illegitimate child is governed by the personal law of
o Both parties are domiciliaries of State A, 18 years old. the mother.
o Married in State B without knowledge of parents. • If legitimated, personal law follows that of the father.
o Annulment brought in State C, husband’s residence. • Common law:
o What law applies? o Now provides that children born of certain invalid marriages
! Following lex loci celebrationis, State B law. If such may still be legitimate.
law requires parental consent, then annulment may o Illegitimate children may be legitimated by events occurring
be granted. after their birth.
! If the most significant relationship approach is used, • Differences in some states give rise to choice of law problems.
State A law (marital domicile). If the law states that o Child may be legitimate as to one parent but illegitimate as to
they have full capacity, no ground for annulment. the other.
! Choice of law rule of State C is irrelevant. • Restatement 2d:
o §287. Child legitimate if this would be his status under the
D. PARENTAL RELATIONS law of the state where:
• Issue of legitimacy is submitted to the personal law of the parents. ! Parent was domiciled when the child’s status of
• Personal law of father is used to determine legitimate relationship. legitimacy is claimed to have been created; or
o German law: head of the family ! Child was domiciled when the parent acknowledged
• Paternity – civil status of the father/mother with respect to the child the child as his own.
begotten by him/her. o §288. A state usually gives the same incidents to a status of
• Filiation – status of the child in relation to his parents. legitimacy created by a foreign law under the principles
• PH law: legitimacy of child governed by the national law of the stated in §28 that it gives to the status when created by its
parents. own local law.
o If different, national law of the father. ! Persons legitimated may inherit land in the forum to
the same extent and under the same circumstances
Determination of Legitimacy of a Child as those legitimated under forum law.

Art. 163, Family Code. The filiation of children may be by nature or by Parental Authority Over the Child
adoption. Natural filiation may be legitimate or illegitimate. (n) • Roman law concept of patria potestas.
• Personal law of the father controls the rights and duties of parents
Art. 164. Children conceived or born during the marriage of the parents are and children.
legitimate. • Joint exercise of parental authority is mandated by FC211.
• If child is illegitimate, mother exercises parental authority under
Children conceived as a result of artificial insemination of the wife with the FC176.
sperm of the husband or that of a donor or both are likewise legitimate • Scope:
children of the husband and his wife, provided, that both of them authorized o Care and rearing of children for civic consciousness and
or ratified such insemination in a written instrument executed and signed by efficiency and the development of their moral, mental and
them before the birth of the child. The instrument shall be recorded in the civil physical character and development.
registry together with the birth certificate of the child. (55a, 258a) o Actions for support.
o Requirements of parental consent to marriage.
Art. 165. Children conceived and born outside a valid marriage are o Discipline and chastisement.

Ish Guidote Page 56 of 107


E. ADOPTION ! (c) One who is married to a Filipino citizen and seeks
• Adoption – the act by which relations of paternity and affiliation are to adopt jointly with his or her spouse a relative by
recognized as legally existing between persons not so related by consanguinity of the latter.
nature. ! Aliens not included in the foregoing exceptions may
o Judicial act creating between two persons a relationship adopt Filipino children in accordance with the rules
similar to that which results from legitimate paternity and on inter-country adoptions as may be provided by
affiliation. law.
• Adoption originally considered to supply solace to those who: • RA 8552 (Domestic Adoption Law) introduced significant changes in
o Had no children; the adoption law.
o Lost their children. o §7(b) provides:
• Now, adoption is given a social and moral purpose.
o Even those with biological children and single people can Any alien possessing the same qualifications as above stated
adopt. for Filipino nationals: Provided, That his/her country has
• The process of adoption affects the status of the parties, thus diplomatic relations with the Republic of the Philippines, that
governed by lex domicilii. he/she has been living in the Philippines for at least three (3)
• Problem: if adopter is domiciled in one state and the child, in another. continuous years prior to the filing of the application for
o What court has power to create adoptions whose effects adoption and maintains such residence until the adoption
would be recognized outside its jurisdiction? decree is entered, that he/she has been certified by his/her
o What law is applicable to adoption of or by a foreigner in the diplomatic or consular office or any appropriate government
forum? agency that he/she has the legal capacity to adopt in his/her
• Since the main object of adoption is to provide for the welfare of the country, and that his/her government allows the adoptee to
child, then his personal law should apply. enter his/her country as his/her adopted
• Use of the child’s personal law is weakened where his domicile is son/daughter: Provided, Further, That the requirements on
merely constructed or if he is a citizen of a state where he does not residency and certification of the alien's qualification to adopt
actually reside in. in his/her country may be waived for the following:
o No basis for the courts to protect the interest of the child.
o Cannot supervise the relations between the child and the (i) a former Filipino citizen who seeks to adopt a relative
adopters. within the fourth (4th) degree of consanguinity or affinity; or
o This has led many states to consider the adopter’s personal
law as having reasonable basis for exercising jurisdiction, (ii) one who seeks to adopt the legitimate son/daughter of
either exclusively or concurrently. his/her Filipino spouse; or
• May an alien adopt a child in the Philippines?
o GENERAL RULE: No, because they have very different family (iii) one who is married to a Filipino citizen and seeks to adopt
orientation, cultures, customs and traditions which could jointly with his/her spouse a relative within the fourth (4th)
degree of consanguinity or affinity of the Filipino spouse;
pose a problem for Filipinos to adapt themselves to a new
environment.
o EXCEPTIONS: FC184 provides: o Aliens must also present certification of legal capacity to
! (a) A former Filipino citizen who seeks to adopt a adopt, and that their state laws allow entry of an adoptee to
relative by consanguinity; the adopter’s country as an adopted son or daughter.
! (b) One who seeks to adopt the legitimate child of his ! May be waived if adoptee is relative.
or her Filipino spouse; or • RA 8043 establishes rules for adoption of Filipino children by aliens
and Filipino citizens permanently residing abroad.

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o Passed in consideration of obligations under the Hague • Decree granting adoption is a foreign judgment, hence, principles on
Convention. recognition and enforcement of foreign judgment shall govern.
o Objectives of the Convention:
! To establish safeguards to ensure that inter-country Uggi Lindamand Therkelsen v. Republic
adoptions takes place in the best interests of the
child and with respect for his or her fundamental Petitioner is Danish and a permanent resident of the Philippines. He is
rights as recognized in international law; married to Blancaflor, a Filipina. The spouses seek to adopt Blancaflor’s
! To establish a system of cooperation amongst natural child. The Juvenile and Domestic Relations Court denied the petition
Contracting States to ensure that those safeguards because it would not result in the minor’s acquisition of Danish citizenship.
are respected and thereby prevent the abduction, the
sale of, or traffic in children; HELD: The petition for adoption must be granted. The law does not require
! To secure the recognition in Contracting States of that the adoption must result in the minor child’s acquisition of the
adoptions made in accordance with the Convention. citizenship of the adopter. The citizenship of the adopter is a matter political,
• Prior to RA 8043, what applied were the “Rules and Regulations on not civil, in nature, and the ways in which it should be conferred lay outside
Foreign Adoption” which implemented PD 603 and bilateral the ambit of the Civil Code.
agreements with foreign countries.
Ng Hian v. Collector of Customs
Republic v. Court of Appeals
Ng Hian is the son of Ng Chion Tue by his first marriage. The latter married
Hughes, an American, married Mabunay, a Filipina. Mabunay was later Jiongco, a woman born in the Philippines to a Filipina mother and a Chinese
naturalized as a US citizen. The spouses sought to adopt Mabunay’s niece father. Jiongco adopted Ng Hian and decided to take him to the Philippines to
and nephew who have been living with them even prior to the filing of the study. The Board of Special Inquiry refused Ng Hian the right to enter.
petition. The minors and their parents consented to the adoption.
HELD: Ng Hian has the right to enter the Philippines. As an adopted child of a
HELD: The spouses cannot adopt. Hughes, an alien, does not fall under any of person who has a right to enter the Philippines, he enjoys the same right.
the exceptions in Art. 184 of the Family Code. On the other hand, while Adopted children stand on equal footing with natural children. Since one can
Mabunay falls under the exception of a “former Filipino citizen seeking to bring his natural child to the United States, it follows that he can also bring
adopt a relative by consanguinity,” she cannot adopt alone as husband and his adopted child to the United States.
wife must jointly adopt if one of the spouses is an alien.
Chapter XIII
Effects of Adoption CHOICE OF LAW IN PROPERTY
• Body of rights and other legal effects may be governed by two laws
depending on which law governed the creation of the adoption. A. THE CONTROLLING LAW
o If adopter’s personal aw applied, same law governs effects. • The classification of whether a particular piece of property is movable
o If child’s personal law applied, such law will cease to regulate or immovable usually determines the applicable legal system.
parent-child relations and will yield to the personal law of the • For immovables: lex situs.
parents. o Rationale: The characterization of immovable property as an
• Adoption relates to a civil right and does not effect changes in the isolated object of rights so that the interests of various
political rights of the adopter. persons are determined by the law of the place where the
o Citizenship of adopter not automatically given to adopted property is situated.
child. o The connecting factor is the immovable itself and not the
parties concerned.

Ish Guidote Page 58 of 107


• For movables: may be lex domicilii, lex situs, lex loci actus, or the o Even if one uses the modern approach, the place where the
property law of transfer. property is located is still the state that is closely and
o Old law: mobilia sequuntur personam – rights over movables significantly related to the issue in question.
are governed by the domiciliary law of the owner. o The rule governs the following issues:
! Rationale: Objects could be moved from place to ! Sale
place, difficult to anticipate where they may be ! Mortgage
situated at a given time. ! Barter
! For purposes of simplicity and convenience. ! Exchange
o Lex situs ! Lease assignment
! Basis is the exercise of power. State where property ! Any form of alienation
is located has the sole power to decide the validity ! Effects of co-ownership
and effects of the transfer of property. ! Quieting of title
! Policy-centered rationale: Parties’ legitimate ! Taxation
expectations are protected. ! Registration
• Normal expectation is for the contract to be ! Prescription
governed by the law of the state where the o Code Commission: Great increase in the amount and variety
object is located. of personal property not connected with the person of the
• Parties should know at time of conveyance owner makes it advisable to adopt the doctrine of lex sitae
whether there is a valid transfer and the also to movables.
nature of such. o Personal property may be separated from its owner, who may
o Lex loci actus – law of the place where the transaction was be taxed on its account at the place where the property is
located. located, although he is not a domiciliary, citizen or resident of
o Proper law of the forum – law of the state which has the most the state which imposed the tax.
real connection with the transfer.
• The Civil Code provides: B. CAPACITY TO TRANSFER OR ACQUIRE PROPERTY
• This is governed by the law of the place where the property is located.
Article 414. All things which are or may be the object of appropriation
are considered either: Llantino v. Co Liong Chong

(1) Immovable or real property; or The Llantinos leased land to Juan Molina, then a Chinese citizen who went by
the name Co Liong Chong. The parties disagreed as to the expiration of the
(2) Movable or personal property. (333) lease contract, thus, the Llantinos filed a complaint for quieting of title. The
trial court dismissed the complaint upon finding that the 60-year lease
Article 16. Real property as well as personal property is subject to the provided in the contract was valid. The Llantinos allege that Molina being a
law of the country where it is situated. Chinese citizen at the time the lease was entered into, the contract is void.

• A conflicts problem will have to be resolved by Philippine courts only HELD: The lease contract is valid. Under the Constitution, lease to an alien for
where the property is located in a foreign country which has a law a reasonable time is valid. A lease may only be considered invalid if there are
that distinguishes between real and personal property. circumstances attendant to its execution which are used as a scheme to
circumvent the constitutional prohibition. Even assuming that the lease
• Thus, the Philippines follows the lex rei sitae rule.
contract was invalid at its inception, it can no longer be challenged in view of
o Rationale: Being physically part of the country, the property
private respondent’s acquisition of Filipino citizenship.
should be governed by the laws thereof.

Ish Guidote Page 59 of 107


Cheesman v. Intermediate Appellate Court her favor. Even assuming that this would satisfy the requirements of the Civil
Code, the document cannot be admitted in evidence. It has not been proven
Thomas Cheesman, an American, was married to Criselda Cheesman, a as a public/official record in accordance with the Rules of Court.
Filipina. They bought real property from one Altares in 1974, but the Deed of
Sale was executed in favor of Criselda only. Likewise, the property was D. EXCEPTIONS TO LEX SITUS RULE
declared for tax purposes under Criselda’s name. After the parties separated,
Criselda sold the property to Padilla. Thomas sued for the annulment of the 1. Where the transaction does not affect transfer of title to or ownership of
sale. The trial court ruled in his favor. the land.
• Governing law is lex intentionis or lex voluntatis.
HELD: The sale to Padilla was valid. The property was purchased using
Criselda’s personal funds, thus, it does not form part of the conjugal property Liljedahl v. Glassgow
of the spouses. Furthermore, the Constitution prohibits the sale of residential
land to aliens; Thomas was charged with knowledge of this prohibition. Bailey mortgaged a parcel of land in Colorado to Liljedahl as security for a
Assuming that it was his intention to buy the property together with his wife, debt payable in Iowa. He later sold the same to Glasgow. The deed of sale
he knowingly violated the Constitution by doing so. Hence, the sale to him is provided that the vendee would assume the mortgage debt. Glassgow, in turn,
null and void. If the Court were to declare the property as conjugal, it would sold the land to Hiatt and Hiatt sold the land to Hilger. Liljedahl sued
amount to a circumvention of the constitutional prohibition. Glassgow for payment of the debt. Under Colorado law, Glassgow would not
be liable while under Iowa law, he became liable upon acceptance of the deed.
C. EXTRINSIC AND INTRINSIC VALIDITY OF CONVEYANCES
• Formalities are governed by lex situs. HELD: Iowa law applies. Contracts made and to be performed in a particular
• Any transfer which requires registration of title cannot be accepted by state are made with reference to the law of that state, which the parties must
the Register of Property unless the formal requirements of the lex be presumed to have had in mind at the time of making the contract. Liljedahl
situs are complied with. and Glassgow are both residents of Iowa. The contract was made there, and
• Validity and effect of conveyance of property are treated as a the deed was delivered there. Likewise, payment of the debt was to be made
question of property rather than contract. in Iowa. Here we are concerned with the assumption of mortgage clause,
• Lex situs also applies to the essential validity of the transfer unless which deals only with consideration and not title to the property per se. It
the lex intentionis is clearly established. could have been the subject of a separate contract, and it must be construed
• Likewise, lex situs governs the effects of the conveyance of and given effect according to the laws of Iowa.
properties.
2. In contracts where real property is offered by way of security for the
Spouses Alcantara v. Nido performance of an obligation such as loan.
• Principal contract is loan, accessory contract is mortgage.
Revelen Srivastava verbally authorized her mother, herein respondent Nido, to • Mortgage governed by lex situs but loan contract is governed by rules
sell a parcel of land in Rizal. Petitioners-spouses offered to buy the same. on ordinary contracts.
They paid the down payment but later defaulted. Nido filed a case to recover
possession of the lot from petitioners. The RTC ordered rescission of the 3. Testate or intestate succession and capacity to succeed are governed by
contract. The CA reversed holding that the unlawful detainer case should the national law of the decedent.
have been filed with the MTC. Also, rescission is not proper because the
contract is void for want of written authority to sell as required by NCC1874. • Under a policy-centered approach the forum court is not bound to
look at the law of the situs when the situs of the movable property at
HELD: The contract is void. A special power of attorney is required under Arts. the time of transfer was insignificant or incidental.
1874 and 1878 of the Civil Code. Nido only had a general power of attorney in

Ish Guidote Page 60 of 107


o If chosen for mere convenience of the parties, but both jurisdiction of its courts, and they have the right to adjudicate title thereto,
parties knew that the property would be used principally in enforce liens thereon, and subject it to the payment of the debts of its owners,
another location. whether resident or not. The modern tendency is to make no distinction
! Then the governing law would be the law of the place between mobility and immobility of property established by the principles of
of principal use. lex rei sitae and mobilia sequuntur personam.
• Where the issue involves considerations other than the validity and
effect of the transfer itself, law of the state which has a real interest in 2. SITUS OF MONEY
applying its law governs. • Leon v. Manufacturers Life Insurance Co.: A contract was entered into
• Rudow v. Fogel: Issue was not with respect to title to property but to in Canada and was endorsed in an annuity.
WoN the conveyance would result in a constructive trust among o HELD: Situs of the money was in Canada, hence, outside the
family members. probate jurisdiction of the Manila courts.
o Since all the family members were residing in another state, o The defendant in this case was only a branch office of the
the forum court applied the domiciliary laws of the parties Canada company who held the funds.
(trustor and trustees) instead of the lex situs of the property. ! Its only duty is to deliver checks issued and made out
by the home office to the annuitant.
E. SITUS OF CERTAIN PROPERTIES o No showing that the funds have been transferred to the
Manila branch.
1. SITUS OF PERSONAL PROPERTY FOR TAX PURPOSES
• Mobilia sequuntur personam 3. SITUS OF DEBTS
o Mere fiction of law. • Two kinds of movable property:
o Based on convenience and public policy. o Choses in possession – embraces all kinds of tangible
• Cannot be applied to limit the right of the state to tax property within physical objects.
its jurisdiction. o Choses in action – refers to intangible objects.
• Yields to established facts of legal ownership, actual presence, and ! Rights of actions – ex. Debt arising from a loan.
control elsewhere. ! Rights represented by documents – those capable of
• Cannot be applied if it would result in inescapable and patent delivery and susceptible to negotiation as a separate
injustice. legal entity.

Asiatic Petroleum v. Co Quico Harris v. Balk

Asiatic appointed Co as its commission agent. The latter became indebted to Harris owed Balk $180. They were both residents of North Carolina. Balk
the former in the amount of P2,123. Without rendering an accounting, he went owned Epstein, a Maryland resident, more than $300. When Harris came to
to China. Asiatic filed a collection suit and succeeded in having Co’s property Baltimore to buy merchandise, Epstein served him with a writ attaching the
attached. The trial court issued a writ of attachment over Co’s deposit with debt which he owed Balk. Harris did not contest. However, back in North
the Mercantile Bank of China. Summons was served by publication. The trial Carolina, Balk sued Harris for collection of the $180. Harris pleaded the
court rendered default judgment against Co and levied upon the bank deposit. Maryland judgment garnishing the debt. The court ruled for Balk finding that
Co’s counsel entered a special appearance. The court declared the the Maryland court had no jurisdiction to garnish the debt, its situs being in
proceedings null and void for want of jurisdiction over Co, since the complaint North Carolina.
was an action in personam.
HELD: The Maryland court had jurisdiction. If the court acquires jurisdiction
HELD: The trial court had jurisdiction to decide the case. Service of summons over the garnishee, it can garnish the debt due from him to the debtor of the
by publication was sufficient. All property within a state is subject to the plaintiff and condemn it. The only condition is that the garnishee could

Ish Guidote Page 61 of 107


himself be sued by the creditor in that state. That Harris was only in Baltimore Collector of Internal Revenue v. Anglo California National Bank
temporarily is of no moment—the obligation to pay his debt clings to and
follows the debtor wherever he goes. Anglo California National Bank is the trustee of CSEI, a resident foreign
corporation. The CIR assessed CSEI deficiency income taxes based on capital
• This conclusion was based on two holdings: gains derived from the sale of certain PASUMIL shares. The CTA cancelled
o Debt, though intangible, is subject to seizure like tangible the assessment as the capital gains constituted income from sources without
property; and the Philippines.
o The debt is located where the debtor is located because it is
where he can be sued and the debt collected. HELD: The income derived from the sale of the PASUMIL shares is not taxable
• Prof. Beale’s criticism: The decision did injustice to the creditor. in the Philippines. While the rule with respect to the situs of shares of stock is
o The creditor is actually the owner of the property. mobilia sequuntur personam, here we are concerned not with the shares
o Yet, he has no control over where his own property is located themselves but with the sale of such shares. The negotiation, perfection, and
because the debtor may travel all over. consummation of the sale were all done in California. In accordance with the
• This issue remains unsettled in this jurisdiction. NIRC, the profit derived therefrom shall be treated as derived entirely from
o It is suggested that the law which governs the contract from sources within the country in which sold.
which the debt arises should also govern the transfer of the
debt. F. PATENTS, TRADEMARKS, TRADE NAME, AND COPYRIGHT
• 27 Sept. 1965: Philippines became party to the Union Convention for
4. SITUS OF CORPORATE SHARES OF STOCKS the Protection of Industrial Property.
o Art. 8: a “trade name shall be protected in all the countries of
Section 63, Corporation Code. Certificate of stock and transfer of shares. - the Union without the obligation of filing of registration,
The capital stock of stock corporations shall be divided into shares for which whether or not it forms part of the trade name.”
certificates signed by the president or vice president, countersigned by the • Western Equipment and Supply Co. v. Reyes:
secretary or assistant secretary, and sealed with the seal of the corporation o Western Electric Co. (WEC), Inc. is a foreign corporation duly
shall be issued in accordance with the by-laws. Shares of stock so issued are organized under the laws of NY.
personal property and may be transferred by delivery of the certificate or ! Not licensed to do business in the Philippines.
certificates indorsed by the owner or his attorney-in-fact or other person o A Nevada corporation imported WEC’s products into the
legally authorized to make the transfer. No transfer, however, shall be valid, Philippines.
except as between the parties, until the transfer is recorded in the books of o Later, defendants Herman, et al. filed with the SEC articles of
the corporation showing the names of the parties to the transaction, the date incorporation for a corporation to be known as Western
of the transfer, the number of the certificate or certificates and the number of Electric Company, Inc.
shares transferred. ! Purpose: manufacture and dealing in electrical and
telephone apparatus and supplies.
No shares of stock against which the corporation holds any unpaid claim o WEC filed a case to restrain the issuance of the certificate of
shall be transferable in the books of the corporation. incorporation to defendants.
o HELD: Although WEC has not done in the Philippines, it has
• The next case distinguishes between: the right to protect its reputation.
o Situs of the shares themselves; and ! Use of a company’s corporate and trade name is a
o Situs of the income derived from the sale of such shares. property right which may be asserted against the
whole world.
! Hanover Star Milling v. Allen: “Since it is the trade and
not the mark that is to be protected, a trademark

Ish Guidote Page 62 of 107


acknowledges no territorial boundaries of Emerald Garment Manufacturing Corporation v. Court of Appeals
municipalities or states or nations, but extends to
every market where the trader’s goods have become H.D. Lee, a Delaware corporation, sought to cancel petitioner’s trademark
known and identified by the use of the mark.” registration for the trademark “STYLISTIC MR. LEE.” It claimed that
• RA 8293 was passed in 1998 prescribing the Intellectual Property petitioner’s trademark “so closely resembled” private respondent’s, “LEE,” as
Code and establishing the Intellectual Property Office. previously registered and used in the Philippines. The Bureau of Patents
o §123 (what cannot be registered): names “well known cancelled the registration. Petitioner now claims that H.D. Lee failed to prove
internationally and in the Philippines, whether or not it is prior commercial use of the mark before filing its application for registration.
registered here, as being already a mark of a person other
than the applicant for registration, and used for identical or HELD: H.D. Lee is not entitled to the cancellation of petitioner’s trademark
similar goods or services.” registration. The trademark should be considered as a whole. The
o §3 provides: dissimilarities between the two marks become conspicuous, noticeable and
substantial enough to matter. Also, private respondent failed to prove prior
International Conventions and Reciprocity. - Any person who actual commercial use of the mark “LEE” prior to the filing of its application.
is a national or who is domiciled or has a real and effective Hence, it has not acquired ownership over said mark. For a foreign
industrial establishment in a country which is a party to any corporation to have capacity to sue for infringement, it must prove actual use
convention, treaty or agreement relating to intellectual and prior registration. On the other hand, petitioner has adequately proven
property rights or the repression of unfair competition, to actual use since 1976 as evidenced by sales invoices.
which the Philippines is also a party, or extends reciprocal
rights to nationals of the Philippines by law, shall be entitled Chapter XIV
to benefits to the extent necessary to give effect to any CHOICE OF LAW IN CONTRACTS
provision of such convention, treaty or reciprocal law, in
addition to the rights to which any owner of an intellectual • Pertinent provisions of the Civil Code involving contracts:
property right is otherwise entitled by this Act. (n)
Article 1305. A contract is a meeting of minds between two persons
! Thus, a foreign corporation may bring an action under whereby one binds himself, with respect to the other, to give
§160 of the IP Code. something or to render some service. (1254a)
o However, §156 of the Act allows only owners of registered
marks to recover damages from any person who infringes his Article 1315. Contracts are perfected by mere consent, and from that
rights. moment the parties are bound not only to the fulfillment of what has
been expressly stipulated but also to all the consequences which,
Philips Export B.V. v. Court of Appeals according to their nature, may be in keeping with good faith, usage
and law. (1258)
PEBV is a foreign corporation not engaged in business in the Philippines. It
filed a letter-complaint against Standard Philips Corp. before the SEC asking Article 1356. Contracts shall be obligatory, in whatever form they may
for cancellation fo the word “PHILIPS” from Standard Philips’ corporate name. have been entered into, provided all the essential requisites for their
validity are present. However, when the law requires that a contract
HELD: PEBV is entitled to the removal of the word. The use of a corporate be in some form in order that it may be valid or enforceable, or that a
name and trade name is a right in rem—it can be asserted and protected contract be proved in a certain way, that requirement is absolute and
against the whole world. It is regarded as a property right which cannot be indispensable. In such cases, the right of the parties stated in the
impaired or defeated by subsequent appropriation by another corporation in following article cannot be exercised. (1278a)
the same field.

Ish Guidote Page 63 of 107


• Principal purposes of contract law: • NCC17 provides:
o Protect the reasonable expectations of parties to the
contract; and The forms and solemnities of contracts, wills, and other public
o Secure stability in commercial transactions. instruments shall be governed by the laws of the country in which
they are executed. x x x
A. CONTRACTS INVOLVING A FOREIGN ELEMENT
• Due to modern means of communications, there are now more • These principles are derived from a broader proposition that the place
contracts being entered into by people of varying nationalities, thus governs the act (locus regit actum).
giving rise to problems in conflict of laws. • What about contracts entered into by cablegram, telex or fax? What is
• States may have different rules regarding: the place of execution?
o Formalities of a contract; o NCC1319, par. 2 states:
o Capacity of parties;
o Essential requisites for intrinsic validity; Acceptance made by letter or telegram does not bind the
o Interpretation of contracts; and offerer except from the time it came to his knowledge. The
o Law governing execution of contracts. contract, in such a case, is presumed to have been entered
• Forum court presented with a contract involving a foreign element into in the place where the offer was made. (1262a)
must be aware that the parties to the contract may have intended a
particular State law to govern. o Engel v. Velasco: Where telegraphic communications are
o Must be ready to displace its own law with that earlier relied followed by letters expressly referring to the telegrams and
upon by the parties. confirming the same, such telegrams become admissible as
• Moreover, many specific provisions in contracts (e.g. interpretations part of the correspondence between the parties.
of contracts) are merely designed to carry out the general policies of
contract law common to all states. C. INTRINSIC VALIDITY OF CONTRACTS
o Applied only when the lex loci intentionis of the parties • Refers to the nature, content and effects of the agreement.
cannot be ascertained. • NCC1318 states:
• Contract law does not reflect strong state policies grounded on a
particular society’s values. Article 1318. There is no contract unless the following requisites
o Thus the forum court is not prevented from supplanting concur:
forum law with another state law.
(1) Consent of the contracting parties;
B. EXTRINSIC VALIDITY OF CONTRACTS
• Governed by lex loci celebrationis. (2) Object certain which is the subject matter of the contract;
• A contract is valid as to form “if in accordance with any form
recognized as valid by the law of the country where made.” (3) Cause of the obligation which is established. (1261)
o Corollarily, no contract is valid which is not made in
accordance with the local form. • Three possible laws:
• If the contract does not comply with the formal requirements of the o Law of the place of the making;
lex loci celebrationis, it does not come into existence. o Law of the place of performance;
• Restatement 2d considers acceptable “formalities which meet the o Law intended by the parties.
requirements of the place the parties executed the contract.”

Ish Guidote Page 64 of 107


1. LEX LOCI CONTRACTUS • NCC1306 provides:
• Refers to the law of the place where the contract is made.
• To determine where the contract is made, we look to the place where The contracting parties may establish such stipulations, clauses,
the “last act is done which is necessary to bring the binding terms and conditions as they may deem convenient, provided they are
agreement into being insofar as the acts of the parties are not contrary to law, morals, good customs, public order, or public
concerned.” policy. (1255a)
• Advantage: relative ease in establishing the place of contracting.
o Certainty and stability are achieved. • When the parties stipulate that the contract be governed by a specific
• Disadvantage: may lead to unjust results where the place of making law, such will be recognized unless there are cogent reasons not to
is incidental or casual and has no significant relationship with the (e.g. the public policy exception).
contract or its performance. • Questions of construction and interpretation of contracts are within
the contractual capacity of the parties. The following are relevant
2. LEX LOCI SOLUTIONIS NCC provisions:
• Law of the place of performance.
• Governs all matters relating to the time, place and manner of Article 1370. If the terms of a contract are clear and leave no doubt
performance, sufficiency of performance and valid excuses for non- upon the intention of the contracting parties, the literal meaning of its
performance. stipulations shall control.
o Connected to the contract in a significant way.
• Criticism: to allow the state where the contract is to be performed to If the words appear to be contrary to the evident intention of the
determine the validity of a contract made in another state is to give parties, the latter shall prevail over the former. (1281)
extraterritorial effects to the laws of the former.
• Disadvantage: Not helpful when the contract is to be performed in Article 1371. In order to judge the intention of the contracting parties,
two or more states with conflicting laws on validity of contracts. their contemporaneous and subsequent acts shall be principally
considered. (1282)
Macmillan and Bloedel v. T.H. Valderama and Sons
• Parties may not have stopped and considered the effects of their
T.H. Valderama through its agent, Splane, entered into a contract in agreement.
Vancouver with Macmillan for the purchase of railroad equipment. Among the o Thus, the law looks at their acts and circumstances to
terms of the contract was that Valderama should obtain an import license to determine which among them could have possibly exerted
be able to open a letter of credit. He failed to do so, thus, Macmillan cancelled influence upon their actions, and assumes that their
the contract. It sought to recover damages from Valderama. intentions are in harmony with such acts and circumstances.
o Rule on implied intention of parties finds application when the
HELD: The governing law is Canadian law. It is both the lex loci contractus issue is the validity of the contract. Parties presumed to have
and the lex loci solutionis. Splane was fully authorized by Valderama to enter contemplated entering into a valid contract.
into the contract in Canada. On the other hand, the sale was FOB Vancouver, ! Forum court should apply the law of the place which
thus the place of performance is in Vancouver. would sustain the contract’s validity.

3. LEX LOCI INTENTIONIS D. CAPACITY TO ENTER INTO CONTRACTS


• Dicey and Cheshire: the intrinsic validity of a contract should be • Personal law of the parties applies (national or domiciliary law).
governed by the law intended by the parties. • In Insular Government v. Frank, Court disregarded lex nationalii and
• Intention may be expressed in a choice-of-law provision in the instead applied lex loci celebrationis.
contract.

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o The result, however, would have been the same had it applied this case, it is only a matter of enforcing the contract between the parties.
lex nationalii, because according to Frank’s national law, he
was already capacitated to enter into the contract. Hong Kong and Shanghai Banking Corporation v. Sherman

E. CHOICE OF LAW ISSUES IN CONFLICTS CONTRACTS CASES Respondents guaranteed Eastern Book Supply’s loan obligation to HSBC.
• Under the principle of freedom of contract, parties may stipulate on When the principal debtor defaulted, HSBC filed suit before the RTC of Quezon
the law to govern their agreement. City to enforce the guaranty. Respondents invoke the choice-of-forum clause
• Most troublesome: in the guaranty agreement in favor of Singapore.
o Validity of choice of law regarding venue in litigation and
arbitration; HELD: The choice-of-forum clause cannot oust the RTC of jurisdiction. The
o Contracts with adhesion clauses. parties did not stipulate that ONLY the courts of Singapore, to the exclusion
of all the rest, have jurisdiction.
1. CHOICE OF FORUM CLAUSE
• In King Mau, the court held that “there is no conflict of laws involved
Compagnie De Commerce v. Hamburg Amerika in this case.”
o This statement disregards the concept of conflict of laws as
Compagnie (French corporation) entered into a charter party with Hamburg encompassing all cases which have at least one foreign
(German corporation). The vessel which was to dock in Saigon received element.
orders to proceed to a neutral port for refuge due to rumors of impending war o Since the contract was executed in NY and the parties were
between France and Germany. The vessel docked in Manila. Compagnie filed also based in NY, it is obvious that there are foreign elements
for damages arising from breach of contract before the CFI of Manila. involved.
Hamburg invoked the arbitration clause in the charter party requiring o In saying that “it is only a question of enforcing an obligation
submission of all disputes to a Board of Arbitration in England. created by or arising from contract,” the court must have
meant that there is only an APPARENT conflict.
HELD: The CFI of Manila has jurisdiction, notwithstanding the arbitration ! Using interest analysis, it could have determined that
clause. There is an absence of averment and proof that under English law, the Philippines has no significant interest in applying
compliance with, or an offer to comply with an [arbitration clause] constitutes its own law.
a condition precedent to the institution of judicial proceedings for the ! Thus, there is a false conflict and the law to be
enforcement of the contract. Also, the issue of jurisdiction was raised only on applied is that of the interested state which is the lex
appeal. loci celebrationis.
• Parties may stipulate on the venue of the suit in case of litigation
King Mau v. Sycip concerning the contract.
o GENERAL RULE: Plaintiff decides venue.
King Mau was appointed as Sycip’s agent in New York. The agreement was o EXCEPTION: A case arising from the contract will be litigated
embodied in a letter sent by King Mau from New York, which was accepted by only in the forum chosen by the parties if the choice of forum
Sycip. After King Mau successfully sold 1,000 tons of coconut emulsion, he clause specifically identifies it as the ONLY venue.
filed a collection suit before the CFI for his commission. Sycip claims that the o In Compagnie de Commerce, the Court upheld the jurisdiction
CFI has no jurisdiction as the agency agreement was perfected in New York. of the Philippine court in the absence of any showing that
compliance with the arbitration clause was a condition
HELD: CFI has jurisdiction. A non-resident may sue a resident before precedent for the enforcement of the contract.
Philippine courts where the defendant may be summoned and his property
may be levied upon in case of judgment debt. There is no conflicts issue in

Ish Guidote Page 66 of 107


o Likewise, in HSBC, the Court held that the parties failed to accordingly dismissed the case.
designate Singapore as the exclusive forum to the exclusion
of the rest. HELD: The dismissal of the case was proper. Petitioner derives its rights from
• Restatement Second clarifies the extent to which choice-of-forum the bill of lading. The arbitration clause being incorporated into such bill of
clauses will be recognized: lading, its provisions must be respected. Unless the agreement is such as to
absolutely close the doors of the courts against the parties, which agreement
Action in Another Place by Agreement. – If the parties have agreed in would be void, the courts will look with favor upon such amicable
writing that an action on a controversy shall be brought only in arrangements.
another state and it is brought in a court of this state, the court will
dismiss or stay the action, as appropriate, unless: The Bremen, et al. v. Zapata Off-Shore Company
1. The court is required by statute to entertain the action;
2. The plaintiff cannot secure effective relief in the other state, for Zapata entered into a contract with Unterweser for the towing of is rig from
reasons other than delay in bringing the action; Louisiana to Italy. The rig was badly damaged, thus, Zapata filed a case
3. The other state would be a substantially less convenient place for before the District Court of Tampa. Unterweser moved to dismiss invoking the
the trial of the action than this state; forum-selection clause in favor of London. Its motion was denied.
4. The agreement as to the place of the action was obtained by
misrepresentation, duress, the abuse of economic power, or other HELD: The case must be remanded for determination of the validity of the
unconscionable means; or forum-selection clause. A contractual choice-of-forum clause should be held
5. It would for some other reason be unfair or unreasonable to unenforceable if enforcement would contravene a strong public policy of the
enforce the agreement. forum in which the suit is brought, whether declared by statute or judicial
decision. A forum clause may also be considered unreasonable if the venue
• There may be abuse of economic power in cases of contracts of chosen is “seriously inconvenient” for the trial of the action.
adhesion.
• In 1912, the New York Arbitration Law was passed providing that
2. CONTRACTS WITH ARBITRATION CLAUSE arbitration contracts shall be “valid, enforceable and irrevocable.”
• Question: May one party compel the other to submit to arbitration? • Hence, under US law, arbitration clauses are no longer considered as
• Meacham v. Jamertone, Franklin and Clearfield R.R. Co.: contrary to the public policy of the forum.
o Arbitration clause: designated the Chief Engineer as arbiter to • There is nothing inherently wrong, immoral or against natural justice
decide all matters in dispute arising out of the contracts. in arbitration agreements; on the contrary, the modern tendency of
! His decisions were to be final and conclusive the court is to look with favor upon such agreements.
between the parties thereto. • American courts: choice-of-law and choice-of-venue provisions do
! Each and every party waives all rights of actions. not oust them of jurisdiction.
o American court declared this clause as contrary to the o Same view taken by Philippine courts.
declared policy of the courts.
Korea Technologies Co., Ltd. v. Lerma
Puromines, Inc. v. Court of Appeals
KOGIES and PGSMC entered into a contract for the manufacture and
Puromines contracted with Philip Brothers for the purchase of urea. The operation of LPG cylinders. PGSMC failed to pay under the terms of the
contract contained an arbitration clause stating that all disputes should be contract and sought to rescind the same. KOGIES invoked the arbitration
settled in London. Since the urea arrived in bad order, Puromines filed a case clause arguing that the contract cannot be unilaterally rescinded without first
before the RTC against Philip Brothers and Maritime Factors, the shipagent. referring the dispute for arbitration in Korea.
Philip Brothers moved to dismiss invoking the arbitration clause. The RTC

Ish Guidote Page 67 of 107


HELD: The arbitration clause is valid. The Supreme Court has sanctioned the instances when a carrier shall be held liable for breach of contract or as an
validity of arbitration clauses in a catena of cases. In this case, the arbitration absolute limit of the extent of liability. It does not preclude the application of
clause has not been shown to be contrary to any law, or against morals, good the Civil Code or other pertinent laws. Here, PAL was so grossly negligent that
customs, public order or public policy. The RTC is not ousted of jurisdiction it amounted to bad faith. The award of moral damages was therefore proper.
because under the ADR law, it must still confirm the foreign arbitral award.
• Fricke v. Isbrandtsen Co.:
3. ADHESION CONTRACTS o A steamship ticket written in English which called for the
• Adhesion contract – one not negotiated by the parties, having been application of US law was issued in Germany to a German
drafted by the dominant party and usually embodied in a plaintiff.
standardized form. o The Court ruled that the provision cannot be enforced unless
• Called a contract of adhesion because the only participation of the the party urging enforcement proved the other literate in the
other party is to sign it. language of the contract with knowledge of what was
• Also known as a “take it or leave it” contract. intended.
• Examples: • Where there is an undue advantage made by a dominant party,
o Insurance contract usually in a huge corporation or business monopoly, the principle of
o Bill of lading contracting party autonomy does not apply.
o Contract of sale of land from real estate firms o Court may invoke public interest/public policy.
o Airline tickets o Ambiguity to be resolved in favor of the party impugning it.
• Saludo v. Court of Appeals:
Pan Am World Airways v. Rapadas o Even if the contract is one of adhesion and must be construed
strictly against the party who drafted it, it will be struck down
Rapadas was boarding a Pan Am flight from Guam to Manila when he was as void and unenforceable only where the weaker party is
forced to check-in his Samsonite attaché case. It never arrived in Manila. He imposed upon in dealing with the dominant bargaining party
filed for damages placing the value of the contents of the case at $42,403.90. and is reduced to the alternative of taking it or leaving it,
Pan Am averred that it could only be liable for $160, as the “Notice of completely deprived of the opportunity to bargain on equal
Baggage Liability Limitations” provides for a limit of $20/lb. footing.
• Sweet Lines v. Teves:
HELD: Rapadas is bound by the terms as printed on the ticket. The Warsaw o It is hardly just and proper to expect the passengers to
Convention applies. Contracts of adhesion are not entirely prohibited, as one examine their tickets received from crowded/congested
who adheres to a contract is free to reject it entirely. However, since Rapadas counters, more often than not during rush hours, for
was compelled to check-in his bag against his will, it should be considered as conditions that may be printed much charge them with
unchecked baggage, liability for loss of which is limited by the Warsaw having consented to the conditions, so printed, especially if
Convention to $400. there are a number of such conditions in fine print, as in this
case.
Philippine Airlines v. Court of Appeals o Again, it should be noted that Condition No. 14 was prepared
solely at the instance of the petitioner, respondents had no
Mejia shipped a microwave from San Francisco to Manila. When it arrived, the say in its preparation.
front glass door was broken. She filed suit against PAL. The trial court ! They could not examine the same before buying the
awarded actual and moral damages. tickets.
! Unlike in insurance contracts, where the would-be
HELD: The air waybill, despite being a contract of adhesion, is valid. However, insured is given full opportunity to examine and
the Warsaw Convention does not operate as an exclusive enumeration of the consider the fine print.

Ish Guidote Page 68 of 107


o It should also be stressed that slapping companies are o Oct. 12, 1929
franchise holders of certificates of public convenience and o For the regulation and establishment of uniform rules and
therefore, posses a virtual monopoly over the business of regulations on the liability of international airline carriers in
transporting passengers between the ports covered by their case of death, injuries of passengers or loss/damage of
franchise. cargo.
! Since they have a virtual monopoly, the passengers o Amendments:
are often left without a choice. ! Hague Convention
o Finally, judicial notice may be taken of the fact that the bulk of ! Guadalajara
those who board these inter-island vested come from the ! Montreal Agreement
low-income groups and are less literate, and who have little ! Guatemala Protocol
or no choice but to avail of petitioner's vessels. ! Montreal Protocol
o Philippines became a party to the Convention on Feb. 7, 1951.
4. SPECIAL CONTRACTS o Applies to all international transportation of persons,
• There are special types of contracts with special characteristics baggage or goods performed by aircraft for hire.
which are governed by specific rules. o Enumerates the instances where the carrier is liable, fixing
o Sales – lex situs the maximum amount of damages.
o Simple loan – law of the permanent place of business of the ! By special contract, parties may agree to greater
financial institution liability.
o Loan by private individual – law of the place where the loan ! Negligence of the passenger may relieve the carrier
was obtained. from liability.
o Pledge/mortgage/antichresis – lex situs o Carrier liable for death/injury of a passenger if the accident
took place:
Carriage of Goods by Sea ! On the aircraft;
! While embarking or disembarking.
American President Lines, Ltd. v. Klepper o Carrier liable for loss/damage to checked in luggage, if the
damage took place during the transportation by air.
Klepper sued APL for damages after its shipment arrived in bad order. The ! Period of responsibility includes the time during
trial court ordered petitioner to pay for the total value of the goods damaged + which the baggage/goods are in the charge of the
sentimental value. It now claims that its liability cannot exceed $500 under carrier.
the COGSA. o Liability for death/injury = $75,000.
! Limits do not apply where the carrier’s
HELD: The COGSA is not controlling in this case. NCC1735 provides that the employee/agents acted recklessly or with intent to
law of the country to which the goods are to be transported shall govern the cause damage, or with knowledge that damage would
liability of the common carrier. Hence, the Civil Code applies. However, probably result.
Klepper, having accepted the bill of lading, is bound by the terms thereof. o Liability for lost/damaged luggage:
Among such terms is a stipulation limiting the carrier’s liability to $500. ! $20/kg. for checked luggage;
! $400 for unchecked luggage.
Contracts for International Transportation o Passenger ticket is prima facie evidence of the contract of
• Claims for damages arising from contracts of international air carriage.
transportation – a comparatively new subject in Conflict of Laws. o Checked baggage is prima facie evidence of the registration
• Warsaw Convention (Convention for the Unification of Certain Rules of the luggage and the condition thereof.
Relating to International Transportation by Air) o Venue:
! Domicile of the carrier
Ish Guidote Page 69 of 107
! Principal place of business of the carrier from plaintiffs the fact of said cancellation. In this case, Pan Am’s employees
! Place of business of the carrier through which the exhibited gross negligence amounting to bad faith. Thus, the award of moral
contract was made damages is proper.
! Place of destination
o Procedural rules of the forum court apply. KLM Royal Dutch Airlines v. Court of Appeals
o Prescription: 2 years from—
! Date of arrival at destination The Mendozas bought tickets to Europe from KLM. The Barcelona-Lourdes
! Date on which the aircraft ought to have arrived leg was to be serviced by Aer Lingus. However, only the daughter and niece
! Date on which the transportation stopped were allowed to board. Plaintiffs were constrained to take the train to Lourdes
o In case of several carriers: instead. Upon their return to Manila, they filed for damages against KLM. KLM
! Each of the successive carriers is bound by the rules disclaims liability invoking Art. 30 of the Warsaw Convention. It claims that
set in the Convention, deemed to be a contracting since it was Aer Lingus which performed that part of the transportation, such
party only insofar as said carrier deals with the part airline should be held liable.
of transportation which it performed.
! Passenger can take action only against the carrier HELD: Art. 30 is inapplicable. The tickets issued to the Mendozas provide that
who performed the transportation during which the the carriage is to be regarded as a single operation. They dealt only with KLM.
accident/delay occurred. Since KLM knew that respondents would be flown by various carriers, it was
• Exception: if first carrier assumed liability for the former’s liability to inform the latter of the conditions prescribed in the
whole journey. tickets, or at the very least, ascertain that they read the conditions. KLM did
! FOR GOODS: not exert any effort to discharge this responsibility.
• Consignor has right of action against first
carrier. • Sabena Belgian World Airlines v. Court of Appeals:
• Consignee has right of action against last o Lower court applied “usual rules” on recovering damages
carrier. beyond Warsaw limitations.
• Both can take action against the carrier who o Common carrier held liable for all damages which can be
performed the transportation during which reasonably attributed, although unforeseen, to the non-
the loss, damage or delay took place. performance of the obligation, including moral and exemplary
• Jointly and severally liable. damages.
• Most SC decisions involved malice, bad faith and discriminatory acts. • Northwest Airlines v. Court of Appeals:
Thus, the Court refused to apply the Warsaw Convention. o Remanded to trial court for reception of evidence.
o In moving for summary judgment, Northwest admitted that its
Lopez v. Pan Am World Airways liability was limited to the maximum allowed in Art. 22(2) of
the Convention.
The Lopezes held first class tickets to San Francisco. However, Pan Am o However, it should be allowed to prove that it was liable ONLY
refused to let them board as they allegedly had no reservations in first class to the maximum amount.
but only in economy. When Sen. Lopez arrived back in Manila, he filed a o The Convention does not regulate or exclude liability for other
complaint for damages against Pan Am. Pan Am raises the defense of good breaches of contract or misconduct of officers or employees.
faith. • Another issue arising from the Convention is the character of Art. 28
(1). The Court ruled that it is a matter of jurisdiction.
HELD: Pan Am is liable for damages. It acted in bad faith by representing to
the Lopezes that their first class tickets were confirmed when in reality, their
bookings were cancelled. To make matters worse, it intentionally withheld

Ish Guidote Page 70 of 107


Santos III v. Northwest Orient Airlines the Convention, the action may be brought either in the UK or Rome. British
Airways is domiciled in the UK. The ticket was purchased in Rome, and the
Santos purchased a round-trip ticket SFO-MNL-SFO. When he checked in, he final destination was Rome. The case of Santos is squarely applicable.
was informed that he had no reservation. He was placed on the waitlist.
Santos sued Northwest for damages. Northwest moved to dismiss for lack of EAP: Compare this case with PAL v. CA. In this case, the Court made no
jurisdiction citing Art. 28 (1) of the Warsaw convention. The trial court determination that there was willful misconduct amounting to bad faith.
dismissed the case.
F. THE APPLICABLE LAW IN THE ABSENCE OF AN EFFECTIVE CHOICE
HELD: Art. 28 (1) is not merely a rule of venue but a rule of jurisdiction. Art. 32, • Restatement 2d: In the absence of an effective choice of law by the
which indicates the places where the action for damages “must” be brought, parties, consideration will be given to the following factors to
underscores its mandatory nature. The characterization is also consistent determine the state with which the contract has its most significant
with the object of the Warsaw Convention to “regulate in a uniform manner relationship:
the conditions of international transportation by air.” Finally, the Convention o (a) the place of contracting,
does not contain any other provision prescribing rules of jurisdiction. o (b) the place of negotiating of the contract,
o (c) the place of performance,
Manila is not the place of destination. It is merely an agreed stopping place. o (d) the situs of the subject matter of the contract,
Neither is it the carrier’s domicile, its principal place of business, or a place of o (e) the domicile, residence, nationality, place of incorporation
business through which the contract was made. Hence, the RTC did not have and place of business of the parties, and
jurisdiction. o (f) the place under whose local law the contract will be most
effective.
Philippine Airlines v. Hon. Savillo • If (a), (b) and (c) are the same, the local law of that state ordinarily
determines the validity of the contract.
Griño and his companions bought tickets to Jakarta to join a golf tournament. o Exception: usury
The Singapore-Jakarta leg was to be serviced by Singapore Airlines. They • The Restatement directs the forum court to single out the state of the
were not allowed to board the flight. Griño was forced to buy a ticket from most significant relationship with the contract:
Garuda instead. He fell ill and was not able to participate in the golf o As a whole; or
tournament. When he returned to Manila, he filed a complaint for damages o With a specific issue arising therefrom.
against PAL. PAL filed an MTD alleging prescription under the Warsaw • Court localizes the contract by examining factual contacts with the
Convention (two years). concerned state.
o Example: deterioration of goods in transit – place of
HELD: Griño’s claims are not governed solely by the Warsaw Convention; the destination
Civil Code applies. Griño prayed for moral damages arising from PAL’s gross • If the place of making and performance are the same, it is presumed
negligence. Following NCC1146, the prescriptive period is four years. that it is that state which is most significantly related to the contract.
• Where there are significant contacts with a transaction, the court will
Lhuillier v. British Airways apply its own law following a policy-centered approach.
o The court should also consider the legitimate expectation of
Lhuillier filed a suit for damages against British Airways. She alleged that she the parties.
was rudely treated by the flight attendants during a flight from the UK to
Rome. The RTC dismissed the complaint for lack of jurisdiction. G. LIMITATIONS TO CHOICE OF LAW
• Generally, parties may not select a law to govern their contract if said
HELD: The RTC has no jurisdiction. Tortious conduct as ground for the law has no connection at all with the transaction or the parties.
petitioner’s complaint is within the purview of the Warsaw Convention. Under
• If the law selected changes, the law as changed should govern.

Ish Guidote Page 71 of 107


o Exception: if the change is so revolutionary that it was never • Osorio v. Posadas: A will is a disposition made:
contemplated by the parties. o By a competent testator,
o In such a case, the governing law is that originally intended. o In the form prescribed by law,
• Parties may select the law to govern the contract but such selection o Of property over which he has legal power of disposition.
cannot oust the court of jurisdiction over the parties and subject • From a conflicts perspective, a will is an involuntary transfer of
matter previously acquired. property.
• Manila Resources Development Corporation v. NLRC: o Execution of a will is a voluntary act but that in itself does not
o Ruben Manahan was hired to work as a mechanical engineer transfer title.
in Riyadh. o Will comes into effect upon the death of the testator, and it is
o Upon arrival, it was discovered that his qualifications did not only then that transfer of title is effected.
meet the requirements of the job. o Governing law:
o Salary reduced from USD1k to USD360. ! Domiciliary law (for common law countries)
o He was repatriated. ! National law (for civil law countries)
o HELD: Philippine laws cannot be rendered illusory by the
parties agreeing on some other law to govern their EAP: Two kinds of succession—
relationship. • Universal – governed by the personal law of the decedent regardless
! Thus, counter-balancing the principle of autonomy of of whether the property is movable or immovable.
contracting parties is the equally general rule that • Split – as to movables, lex domicilii, but as to immovables, lex situs.
provisions of applicable law, especially provisions
relating to matters affected with public policy are A. EXTRINSIC VALIDITY OF WILLS
deemed written into the contract. • Filipino executes will abroad:
! The governing principle is that parties may not o Lex loci celebrationis – pursuant to NCC815, which follows
contract away applicable provisions of law especially the rule in NCC17:
peremptory provisions heavily impressed with public
interest. When a Filipino is in a foreign country, he is authorized to
• Use of cognovit clauses make a will in any of the forms established by the law of the
o Cognovit clause – debtor may agree to be subject to the country in which he may be. Such will may be probated in the
jurisdiction of a specific court/s in case he breaches the Philippines. (n)
contract or defaults in payment.
o Cognovit note waives debtor’s right to receive notice, o Lex nationalii – no specific provision in the Civil Code.
authorizes entry of judgment against him. ! Tolentino: If an alien is allowed to execute a will in a
o Also known as confession-of-judgment clause. foreign country following Philippine law on
! Valid only if the parties were of equal bargaining formalities, with more reason should the Filipino be
power and the debtor agreed to it voluntarily. allowed to do so.
! Law did not intend to put the Filipino in a worse
Chapter XV position than the alien in relation to Philippine law.
CHOICE OF LAW IN WILLS, SUCCESSION AND ADMINISTRATION OF ESTATES ! Code should have expressly stated this considering
the rule in NCC17.
Article 783, Civil Code. A will is an act whereby a person is permitted, with the
formalities prescribed by law, to control to a certain degree the disposition of
this estate, to take effect after his death. (667a)

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In Re Estate of Johnson, supra o In accordance with NCC819, the will should not be probated if
it affects heirs in the Philippines.
Johnson was a US citizen. He died in Manila leaving a holographic will which
was signed by only two witnesses instead of three as required by the Code of Extrinsic Validity of Holographic Wills
Civil Procedure. The will was admitted to probate as it was found to have
complied with Illinois law, the decedent being a citizen of that state. His Article 816. The will of an alien who is abroad produces effect in the
daughter seeks to annul probate of the will. Philippines if made with the formalities prescribed by the law of the place in
which he resides, or according to the formalities observed in his country, or in
HELD: The will was correctly admitted to probate. The Code of Civil Procedure conformity with those which this Code prescribes. (n)
provides that if a will is executed in accordance with the national law of the
testator, and was probated and allowed there, it may be proved, allowed and Article 817. A will made in the Philippines by a citizen or subject of another
recorded in the Philippines. However, the trial court erred in taking judicial country, which is executed in accordance with the law of the country of which
notice of the Illinois statute because only an annotation was presented in he is a citizen or subject, and which might be proved and allowed by the law
court. This notwithstanding, the decision can no longer be disturbed as it has of his own country, shall have the same effect as if executed according to the
not been alleged that the Illinois law is different from what the court found. laws of the Philippines. (n)

Extrinsic Validity of Joint Wills • These provisions are applicable to holographic wills.
• A holographic will is defined in NCC810:
Article 818, Civil Code. 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 A person may execute a holographic will which must be entirely
third person. (669) written, dated, and signed by the hand of the testator himself. It is
subject to no other form, and may be made in or out of the
• Joint wills executed by Filipinos anywhere (even if the foreign country Philippines, and need not be witnessed. (678, 688a)
allows it) are VOID on grounds of public policy.
• Dacanay v. Florendo: Joint wills are prohibited because— • A holographic will is also known as an autographic will.
o A will is a purely personal and unilateral and this is defeated if o Introduced by the NCC to facilitate the secret expression of
two or more persons make their will in the same instrument; the desire by the testator.
o It is contrary to the revocable character of a will; o Simplest and most convenient method for making a last
o A joint will may expose a testator to undue influence and may testament.
even tempt one of the testators to kill the other. o JBL Reyes: the simplicity of holographic wills is an invitation
• Purpose of NCC818 is to prevent overreaching especially between the to forgery.
husband and wife.
o The spouse who is more aggressive or dominant is liable to Babcock Templeton v. Rider Babcock
dictate the terms of the will for his or her own benefit or for
that of third persons whom he or she desires to favor. Babcock Templeton filed a petition for the probate of an alleged holographic
o Reciprocal wills – one spouse may be tempted to kill of or will executed by Jennie Rider Babcock. Since the will was not executed in
dispose of the other. compliance with the Code of Civil Procedure, it was alleged that California
• If a joint will is admitted to probate upon the death of the husband, law, as the testatrix’s domiciliary law, should govern its extrinsic validity. The
the decree of probate affects only the estate of the husband. trial court admitted the will to probate.
o Wife would then die intestate.
• NCC says nothing about a joint will executed in the Philippines by HELD: California law applies. The trial court correctly found that the testatrix
aliens whose national laws do not prohibit it. was a domiciliary of California. It was shown that she abandoned the same

Ish Guidote Page 73 of 107


and subsequently acquired a new domicile. While she resided in the o The Court, in applying the doctrine of processual
Philippines before her death, she had no intention staying here permanently. presumption, disregarded the clear intention of the testator.
Her repeated declarations show her intent to return ultimately to the US. o It is submitted that the Court should have used a policy-
centered approach in addressing the issue instead of the
B. INTRINSIC VALIDITY OF WILLS mechanical application of lex nationalii.
• Governed by the national law of the decedent. NCC16 provides: o Using the most significant relationship approach, Philippine
law would have applied:
xxx ! Decedent was a resident of the PH.
! He executed his will here.
However, intestate and testamentary successions, both with respect ! He desired PH law to govern.
to the order of succession and to the amount of successional rights ! The properties subject of the will were located in the
and to the intrinsic validity of testamentary provisions, shall be PH.
regulated by the national law of the person whose succession is o In the alternative, the Court could have used “disingenuous
under consideration, whatever may be the nature of the property and characterization”:
regardless of the country wherein said property may be found. (10a) ! Issue characterized as one of property instead of
succession.
• Miciano v. Brimo: ! Thus, lex rei sitae would apply.
o Re: the following condition in the testator’s will—
Cayetano v. Leonidas
Second. I likewise desire to state that although, by law, I am a
Turkish citizen, this citizenship having been conferred upon Adoracion Campos died leaving her father Hermogenes and siblings as her
me by conquest and not by free choice, nor by nationality and, heirs. Hermogenes, believing himself to be the only compulsory heir, executed
on the other hand, having resided for a considerable length of an affidavit of self-adjudication. Adoracion’s sister, Nenita, later filed a
time in. the Philippine Islands where I succeeded in acquiring petition for reprobate of a will allegedly executed by the deceased in the US.
all of the property that I now possess, it is my wish that the At the time of her death, Adoracion was allegedly a Pennsylvania citizen.
distribution of my property and everything in connection with Hermogenes opposed claiming that he would be deprived of his legitime as
this, my will, be made and disposed of in accordance with the the testatrix’s forced heir. The trial court admitted the will to probate, as the
laws in force in the Philippine Islands, requesting all of my law of Pennsylvania does not provide for legitimes.
relatives to respect this wish, otherwise, I annul and cancel
beforehand whatever disposition found in this will favorable to HELD: Hermogenes is not entitled to receive anything by way of legitime. Art.
the person or persons who fail to comply with this request. 16, par. 2 of the Civil Code provides that the intrinsic validity of a will shall be
governed by the decedent’s national law. The testatrix being a national of
o The condition is void for being violative of Art. 10, OCC. Pennsylvania, the laws of that state apply. Under such laws, she was free to
o Assuming said condition was legal and valid, any legatee who dispose of her entire estate by will.
fails to comply with it, as the herein oppositor who, by his
attitude in these proceedings has not respected the will of the C. INTERPRETATION OF WILLS
testator, as expressed, is prevented from receiving his legacy. • Pursuant to the nationality principle embodied in the Civil Code, the
o Said condition is considered unwritten, and the institution of interpretation of a will must be governed by the rules of interpretation
legatees in said will is unconditional and consequently valid of the decedent’s national law.
and effective even as to the oppositor. • Where the terms are clear and unambiguous, the lex intentionis
• Criticism: should be followed.
• If there is ambiguity, refer to:

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o The context of the instrument itself; or (1) By implication of law; or
o The testator’s contemporaneous and subsequent acts in
keeping with the nature and object of the document. (2) By some will, codicil, or other writing executed as provided in case
• Presumptions may be resorted to if the intentions of the testator of wills; or
cannot be ascertained.
o First, the ambiguity should be resolved in keeping with the (3) By burning, tearing, cancelling, or obliterating the will with the
laws and customs of that state most probably in the mind of intention of revoking it, by the testator himself, or by some other
the testator when he used the words, and with which he is person in his presence, and by his express direction. If burned, torn,
presumed to be most familiar. cancelled, or obliterated by some other person, without the express
! If it is apparent that the testator had a specific state direction of the testator, the will may still be established, and the
law in mind, such will control the interpretation of the estate distributed in accordance therewith, if its contents, and due
will. execution, and the fact of its unauthorized destruction, cancellation,
o Second, in case a will admits of different interpretations, the or obliteration are established according to the Rules of Court. (n)
interpretation by which the disposition is to be operative shall
be preferred (NCC788). • Problem: Testator is domiciled in State A, revokes his will there. He
! Most favorable construction to accomplish the changes domicile to State B, where he dies. What if the revocation
purpose intended by the testator. was valid according to the laws of State A, but not of State B? Which
! Presumed that the testator intended a lawful thing. law applies?
o Common law jurisdictions: law of domicile at the time of the
D. REVOCATION testator’s death governs, revocation is invalid.
o Philippines: law of the place of revocation. Revocation valid.
Article 828. A will may be revoked by the testator at any time before his death. (But what is the statutory basis for this?)
Any waiver or restriction of this right is void. (737a)
E. PROBATE
• According to NCC829, a revocation done outside the Philippines, by a • Probate – an adjudication that the last will and testament of a person
person who does not have his domicile in this country, is valid when it was executed with all the formalities required by law.
is done according to: • Generally, does not pass upon the intrinsic validity of the will.
o The law of the place where the will was made (lex loci • Probate is synonymous with authentication of a will.
celebrationis); or • Since the disallowance of a will is procedural in character, the law of
o The law of the place in which the testator had his domicile at the forum will govern procedural matters.
the time (lex domicilii). • But again, since probate is concerned with the extrinsic validity of a
• If a will is revoked abroad by a domiciliary of the Philippines, the will, the forum court will have to use lex loci celebrationis pursuant to
governing law is: NCC17, 816 and 817.
o Law of the domicile (Philippine law); or • Grounds for disallowance are provided in Rule 76, §9 of the Rules of
o Law of the place of the revocation (lex loci actus). Court:
• If the revocation takes place in the Philippines, it is valid when it is in
accordance with the provisions of the Civil Code. Grounds for disallowing will. — The will shall be disallowed in any of
• NCC 830 provides instances wherein a will is considered revoked, the following cases:
thus:
(a) If not executed and attested as required by law;
No will shall be revoked except in the following cases:
(b) If the testator was insane, or otherwise mentally incapable to

Ish Guidote Page 75 of 107


make a will, at the time of its execution; 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
(c) If it was executed under duress, or the influence of fear, or threats; executed according to the laws of the Philippines. (n)

(d) If it was procured by undue and improper pressure and influence, • Common law conflicts rule:
on the part of the beneficiary, or of some other person for his benefit; o If the will is allowed at the testator’s last domicile, it is valid
everywhere with respect to movable property.
(e) If the signature of the testator was procured by fraud or trick, and ! This is because with respect to movable property, lex
he did not intend that the instrument should be his will at the time of domicilii governs.
fixing his signature thereto. o However, with respect to real property, the probate of the will
in the testator’s last domicile does not affect the conveyance
• Wills executed in a foreign country may be probated in the PH upon a of land which is governed by lex situs.
showing of:
o Due execution in accordance with the lex loci celebrationis; Suntay v. Suntay, supra
and
o Testamentary capacity at the time of execution of the will. Suntay was a Filipino who died in China. He allegedly executed a will in China
! Under NCC799, there is testamentary capacity where in 1931. His son, Federico, filed a petition for probate of the will, which had
“the testator was able at the time of making the will allegedly been filed, recorded and probated before the District Court of Amoy,
to know the nature of the estate to be disposed of, the China. The petition was denied by the trial court.
proper objects of his bounty, and the character of the
testamentary act.” HELD: The will cannot be admitted to probate. The following must be proven
• Philippine courts may order the allowance of wills already probated in as facts:
foreign countries, thus, Rule 77, §1 provides: 1. That the Amoy district court is a probate court;
2. The procedural law of China on the probate/allowance of wills; and
Will proved outside Philippines may be allowed here. — Wills proved 3. The legal requirements for the execution of a valid will in China in
and allowed in a foreign country, according to the laws of such 1931.
country, may be allowed, filed, and recorded by the proper Court of Federico merely presented an Order issued by the court which consisted of a
First Instance in the Philippines. statement that the parties underwent depositions. Since there was no proof
of Chinese law presented, the doctrine of processual presumption applies.
• §3 provides for the effect of allowance: Philippine law requires notice to all interested parties. There is no showing
that such parties were notified.
When will allowed, and effect thereof. — If it appears at the hearing
that the will should be allowed in the Philippines, the shall so allow it, Vda. De Perez v. Tolete
and a certificate of its allowance, signed by the judge, and attested by
the seal of the court, to which shall be attached a copy of the will, The Sps. Perez were Filipinos who later became US citizens. The husband
shall be filed and recorded by the clerk, and the will shall have the executed a will bequeathing his entire to estate, with a proviso that should
same effect as if originally proves and allowed in such court. she predecease him, his estate will go to his children and grandchildren, with
his brother Rafael as trustee. The wife similarly executed a will of her own.
• In connection, NCC817 states: The spouses perished in a fire, thus, Rafael filed a petition for probate of the
wills before a New York court. He was appointed administrator. In Bulacan,
A will made in the Philippines by a citizen or subject of another Mrs. Perez’s mother filed a petition for reprobate of the wills. The trial court
country, which is executed in accordance with the law of the country denied reprobate because the will was only signed by two witnesses.

Ish Guidote Page 76 of 107


the Philippines, hence, it is the ancillary administrator who is entitled to
HELD: Mrs. Perez’s mother should be given an opportunity to prove New York possess the same.
law. Proof of foreign law is required because our courts cannot take judicial
notice of such laws. Moreover, the wills should be jointly probated. What the G. TRUSTS
Civil Code prohibits are joint wills, whereas here there were two distinct wills. • Trust – a right of property, real or personal, held by one party for the
The Rules should be liberally construed in order to promote their object and to benefit of another.
assist the parties in obtaining just, speedy and inexpensive determination of o Deed – during the lifetime of the trustor.
every action and proceeding. o Will
• Conflicts issues arise when:
F. ADMINISTRATION OF ESTATES o They involve interests or properties in a place other the
• Duties: decedent’s domicile;
o Manage and settle decedent’s debts; o Questions as to the validity of the propriety of the trust arise;
o Distribute the residuum of the estate to the deceased’s heirs. or
• Probate court has the duty, upon allowance of the will, to issue letters o There is an issue as to compliance with formalities.
testamentary to the person named in the will upon the latter’s • Governing law:
application. o If there is a choice-of-law clause: law chosen by the creator
• Where there is no will, the court may appoint an administrator. of the trust.
• Title vested in the administrator results from law. o If there is none, the law that will sustain the validity of the
o PRIMARY PURPOSE: Protection of creditors trust. May be:
o INCIDENTAL PURPOSE: Distribution of the estate to the next ! Law of the state where the trust is being
of kin. administered; or
• Title of a domiciliary administrator has no extraterritorial force. ! Law of the state where the trustor was domiciled.
• Ancillary administrator – appointed by the court of the foreign o In the case of testamentary trusts, the controlling law as to
country where the assets or property are located. capacity and extrinsic validity is the same as that of the will
which created them.
Tayag v. Benguet Consolidated Mining Company, Inc. ! Characterized as an issue of property, thus, as to
intrinsic validity, lex situs applies.
Perkins died leaving two stock certificates covering some 30,000 shares in
the Benguet Consolidated Mining Company (BCMC). The New York probate Chapter XVI
court appointed the County Trust Company of New York (CTC) as domiciliary CHOICE OF LAW IN TORTS AND CRIMES
administrator. CTC had possession of the stock certificates. Meanwhile,
Sanidad instituted ancillary proceedings before the CFI. Tayag was appointed • “Tort” is derived from the French word torquere or “to twist.”
ancillary administrator. CTC refused to surrended the BCMC stock certificates • It is an act or omission producing injury to another without any
to him. Tayag then petitioned the court to declare the stock certificates lost. previous existing lawful relation of which the act or omission may be
The trial court granted his petition. said to be a natural outgrowth or incident.
• Anglo-American law/jurisprudence: Tort includes malice and willful
HELD: Tayag, as ancillary administrator, is entitled to possession of the stock intent.
certificates. When a person dies and he leaves properties in his domicile as • Spanish concept of quasi delict excludes obligations arising from
well as in a foreign country, administration proceedings are instituted in both contract.
countries. Principal administration takes place in the decedent’s domicile, • NCC provisions:
while any other administration is termed the ancillary administration. Since
BCMC is a domestic corporation, the actual situs of the shares of stock is in Article 20. Every person who, contrary to law, willfully or negligently

Ish Guidote Page 77 of 107


causes damage to another, shall indemnify the latter for the same. o Difference in product liability laws.
o Varying judicial interpretations in the extent of liability.
Article 2176. Whoever by act or omission causes damage to another, • Interstate accidents:
there being fault or negligence, is obliged to pay for the damage done. o Concerned states are those where:
Such fault or negligence, if there is no pre-existing contractual ! The victims and tortfeasor reside; or
relation between the parties, is called a quasi-delict and is governed ! The enterprise has business activity.
by the provisions of this Chapter. (1902a) o It is in these states that the effects of granting/denying
damages will be greatly felt.
A. POLICIES BEHIND CONFLICTS TORT LAW • Other states which may be considered concerned states on the
• Policies underlying substantive tort law: grounds of strongly held state policies:
o To deter socially undesirable or wrongful conduct; and o State where the liability creating conduct occurred; or
o To rectify the consequences of the tortious act by distributing o State where the injury occurred.
the losses that result from accident and products liability.
• Thus, the policy behind tort law will most likely be a strongly held B. LEX LOCI DELICTI COMMISSI
policy of the state. • The law of the place where the alleged tort was committed
o As a result, courts will be less inclined to displace forum law determines tort liability in matters affecting conduct and safety.
with foreign law. o Traffic rules and speed limits further state policies of
• Considerations in determining the applicable law in conflicts torts deterring socially unproductive conduct.
cases: • The locus delicti is not easily determined where the liability producing
o Needs of interstate and international systems including the conduct occurs in one state but the injuries are sustained in another.
policies of: • Common law: where the last event necessary to make an actor liable
! Upholding the justified expectation of parties; and for an alleged tort occurs.
! Minimizing the adverse consequences that might o Adheres to the vested rights theory.
follow from subjecting a party to the law of more than o If there is no harm, then there is no tort.
one state. o Negligence in itself is not actionable unless there is injury.
o Discouraging forum shopping • Civil law: where the tortious conduct was committed.
o Achieving decisional harmony o Legality or illegality of a person’s act should be determined by
• Ordinarily, parties to a tort case could not have had a specific state the law of the state where he is at the time he does such act.
law in mind, since accidents are fortuitous. o If he falls short of the standard of conduct prescribed, he is
o Nonetheless, they may have anticipated the possibility of liable for any injury caused even if it takes place in another
liability and insured against it. state.
• In the same vein, corporations may expect that the laws of the state • Whether the situs of the tort is the place of conduct or the place of
where it has continuous and systematic business activities will be injury, the traditional view is that an actor liable by the lex loci delicti
applicable. is liable everywhere, in accordance with the vested rights theory.
o But it cannot comply with various laws without o Lex loci delicti will not be enforced in the forum where it
reincorporating in each state. violates state policy.
• In such cases, the courts should lessen the adverse effects of o However, absence of a similar law in the forum imposing
applying the laws of several states on the parties. liability does not preclude the grant of relief under a foreign
• When will a conflicts tort problem arise? tort claim.
o Place where tortious conduct and resulting injury occurred • Alabama Great Southern Railroad v. Carroll:
are different. o Negligent act – failure to inspect the links – occurred in
o One state imposes higher standards than the other. Alabama.

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o Injury – occurred in Mississippi. o Place where the relationship of the parties are centered.
o Since under Mississippi law, no recovery could be had, it • Two-fold purpose of determining contacts:
follows that the plaintiff had no rights which could be o To identify the interested state; and
enforced by the Alabama courts. o To evaluate the relevance of these contacts to the issue in
question.
Loucks v. Standard Oil Company • Strength is not drawn in numbers. Rather, the court localizes the state
of the most significant relation.
Loucks was a domiciliary of New York who was killed in a car accident in o It then assesses the event or transaction in light of the
Massachusetts, purportedly due to the negligence of Standard Oil’s relevant policy considerations of the interested states and
employees. His widow and children filed suit for damages before a New York their underlying policies.
court. Massachusetts law grants a right of action against the employer for the • Babcock v. Jackson:
negligence of its agents or servants. New York law does not provide for o NY contacts were more significant than Ontario contacts.
similar liability. ! Only connection with Ontario was that the accident
occurred there.
HELD: The right of action under Massachusetts law may be enforced in a New o Guest-host relationship was formed in NY, trip commenced
York court. A foreign statute is not law in this state, but it gives rise to an and was to terminate there.
obligation which, if transitory, follows the person and may be enforced
wherever the person may be found. While NY law does not provide for similar Saudi Arabian Airlines v. Court of Appeals
liability, the Massachusetts law has not been found to be contrary to any
public policy of the state. The fundamental public policy is perceived to be Morada, a flight attendant of SAUDIA, went to a disco with her fellow
that rights lawfully vested shall be everywhere maintained. Only exceptional attendants, Thamer and Allah, while on a stopover in Jakarta. One of her
circumstances should lead one of the states to refuse a right acquired in companions, Thamer, attempted to rape her. Both men were arrested but
another. were subsequently released upon intervention of the Saudi government. When
Morada flew to Saudi, her passport was confiscated and was released only
• The application of lex loci commissi leads to uniformity of results. after she agreed to drop the case against Thamer and Allah. When she was
• Prof. Weintraub’s criticism: If the object of conflicts law is to achieve about to depart from Riyadh, she was apprehended and taken to a court. To
uniformity of results, then there must be uniformity of rules in each Morada’s surprise, she was convicted of violation of Islamic law. She filed a
possible forum. complaint against SAUDIA under Arts. 19 and 21 of the Civil Code.
o Unreasoned application of the lexi loci delicti commissi to
achieve uniformity of results independent of fairness to the HELD: Philippine law applies. This dispute should be characterized as one of
parties frustrates the ends of justice. tort. Morada alleged that SAUDIA misrepresented to her that she was being
taken to Jeddah only to testify against Thamer and Allah, when in truth she
C. MODERN THEORIES ON FOREIGN TORT LIABILITY was the one made to face trial for very serious charges. Following the
traditional approach, the applicable law is Philippine law since it is the lex loci
1. THE MOST SIGNIFICANT RELATIONSHIP delicti commissi. The acts alleged to have been violative of the Civil Code
• Considers the state’s contacts with the: took place in the Philippines. Even under the modern approach (most
o Occurrence significant relationship), Philippine law would still govern. Morada is a
o Parties Filipina, working with SAUDIA, a resident foreign corporation.
• Contacts to be considered:
o Where the tortious conduct occurred 2. INTEREST ANALYSIS
o Where the injuries were sustained • Considers the relevant concerns that the state may have in the case
o Domicile, residence or nationality of the victim and tortfeasor and its interest in having its law applied on that issue.

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• First step: determine if there is a false or true conflict. Sorrenson became intoxicated.
o False conflict – if only one state has an interest in having its
law applied and failure to apply the other state’s law would • Schmidt illustrates the imposition of liability under a substantive rule
not impair the policy reflected in that law. of tort law that has a strong underlying admonitory policy.
o True conflict – where both states have an apparent interest in
applying their respective laws to the case. American Contributions to Conflicts Tort Law
! Check if the interests are substantial. • Law of the tort – applicable to matters involving regulation of
• Babcock presented a false conflict. conduct.
o Canada had no interest in applying its guest statute to the • Domiciliary law of the parties – governs in matters relating to loss
case because the policy behind the law was to protect hosts distribution or financial protection.
from suits by ungrateful guests or insurance companies from • Applying these principles, Babcock would be decided on the basis of
collusive suits. the parties’ domiciliary law, which is New York law.
! The parties to the case were both non-domiciliaries. o Award of damages centered around the parties’ domicile.
! The insurance was registered in NY. o A state’s loss distribution policy benefits its domiciliaries
o Application of NY law will advance state policies without even when they act outside the state borders.
impairing the policy of Canada.
D. FOREIGN TORT CLAIMS
3. CAVER’S PRINCIPLE OF PREFERENCE • Tortious liability is transitory—it is deemed personal to the tortfeasor
• Third principle in torts deals with rules that sanction some kind of and follows him wherever he goes.
conduct engaged in by a defendant in one state and extends the o Compensation may be exacted from him in any tribunal which
benefit of this higher standard of conduct and financial protection to can obtain jurisdiction over his person.
the plaintiff even if the state of injury does not create analogous o Enforcement of claim not limited to the place where the cause
liabilities. of action arises.
• Thus, an action for tort may be brought wherever the tortfeasor is
Schmidt v. Driscoll Hotel subject to suit.

In Wisconsin, Driscoll Hotel sold liquor to Sorrensen resulting in the latter’s 1. CONDITIONS FOR THE ENFORCEMENT OF TORT CLAIMS
intoxication. Despite this, he drove an automobile which turned over resulting • Requisites:
in injury to Schmidt, his passenger. This accident occurred in Wisconsin. 1. The foreign tort is based on a civil action and not on a crime;
Schmidt sued Driscoll Hotel in Minnesota. The trial court dismissed the 2. The foreign tort is not contrary to the public policy of the
complaint on the ground that the Minnesota Civil Damage Act permits forum; and
recovery only when the illegal sale of liquor is followed by an injury in the 3. The judicial machinery of the forum is adequate to satisfy the
state. On the other hand, the lexi loci delicti commissi does not have a civil claim.
damage act. • As opposed to contracts, the defendant in a transnational tort is
usually sued before a foreign court against his will.
HELD: Schmidt can still recover. Under the Restatement, the law of the place o Questions often arise as to jurisdiction, especially in issues
of the wrong governs. But if this were to be applied in the case at bar, Schmidt involving products liability.
would be without a remedy against Driscoll Hotel. In conformity with the
principles of equity and justice, it is Minnesota law which should apply—all 2. PRODUCTS LIABILITY OF THE FOREIGN MANUFACTURER
the parties were residents of Minnesota, and Driscoll Hotel was licensed to
• State laws on basis and extent of liability for defectively
operate under Minnesota law. The illegal sale took place in Minnesota.
manufactured products vary significantly, giving rise to conflicts torts
Wrongful conduct was complete in this state when, as a result thereof,
cases.

Ish Guidote Page 80 of 107


o Possible bases: o The widow of the Brunei resident brought suit against the
! Negligence Malaysian company before a Brunei court, and against
! Strict liability Aerospatiale and its affiliate in Texas.
! Breach of warranty against hidden defects o Jurisdiction in Texas was asserted on the basis of
• In a typical products liability case, the plaintiff purchases a fungible Aerospatiale’s doing business there.
or non-fungible product from an out-of-state manufacturer. If he ! Texas appeared to have more favorable laws on
suffers injury after ingesting/using the product, he may bring an products liability.
action against the manufacturer in his home state. ! Aerospatiale filed MTD, denied.
o Forum court has real interest in applying its own law in order o Aerospatiale filed proceedings before a Brunei court to enjoin
to allow its injured domiciliary to recover damages. plaintiff from continuing with the Texas case.
! This principle was not followed in Asahi Metal ! Brunei was the natural forum for the trial.
Industry. ! It would be oppressive for the plaintiffs to continue
with the TX proceedings as Aerospatiale would not be
Asahi Metal Industry Co. v. Superior Court of California able to pursue legal proceedings against the
Malaysian company.
Asahi manufactured tire valve assemblies in Japan which it sold to Cheng • Bier v. Mines de Potasse d’ Alsac: A Dutch market gardener operating
Shin, a Taiwanese company. Cheng Shin incorporated the valve assemblies nurseries using water from the Rhine river filed suit against a French
into tires that were sold in the US. An accident occurred in California wherein mining company before a Dutch court.
a motorcycle driver lost control of his vehicle and collided with a tractor. The o He alleged that the French company had been dumping
driver filed a products liability action against both Asahi and Cheng Shin in chloride into the river causing pollution damage.
California. Asahi moved to dismiss for lack of jurisdiction. o Where did the harmful event occur, as required by the
Brussels Convention?
HELD: The California court has no jurisdiction over Asahi. The test of whether ! Where the wrongful conduct occurred (France)
an exercise of personal jurisdiction comports with due process is whether the ! Where the effects were felt (Netherlands)
defendant purposely established minimum contacts in the forum state. The o Dutch court originally declined to exercise jurisdiction.
placement of a product in the stream of commerce, without more, is not an o European Court held that the plaintiff could at its election, sue
act of the defendant purposely directed toward the forum state. Here, at either place.
respondents have not demonstrated that Asahi purposely availed itself of the
California market. It has no office, agents, employees or property in California, Sovereignty as Basis of Jurisdiction
neither does it advertise or solicit business in this state. • Jurisdiction
o An aspect of sovereignty.
EAP: This case distinguished between stream of commerce and purposeful o Refers to judicial, legislative and administrative competence.
availment. The latter is a higher standard, and must be met for purposes of • Exercise of civil jurisdiction over aliens presents the same problems
exercising jurisdiction over a non-resident. as in criminal cases.
• Common law: Tag jurisdiction
• Societe Nationale Industrille Aerospatiale v. Lee Kui Jak: A helicopter o Used to justify the exercise of personal jurisdiction over a
manufactured by Aerospatiale crashed in Brunei killing a Brunei defendant present in the territory, however short.
resident. o Pennoyer v. Neff: “Every state possesses exclusive
o Aerospatiale is a French company, owned by an English jurisdiction and sovereignty over persons and property within
company and operated by a Malaysian company. its territory… No state can exercise direct jurisdiction and
authority over persons and property not within its territory.”

Ish Guidote Page 81 of 107


• Worldwide Volkswagen Corp. v. Woodson: US courts have jurisdiction o Case recognized that tort liability is transitory.
over a foreign corporation which introduces its products into the o Other pertinent issues discussed in the case involved:
stream of commerce with the expectation that they will be purchased ! Lex loci delicti commissi
by consumers in the forum state. ! Statute of limitations
! Command responsibility
Worldwide Volkswagen Corporation v. Charles Woodson ! Exhaustion of remedies

The Robinsons were residents of New York. They purchased a vehicle from Hilao, et al. v. Estate of Ferdinand Marcos
Seaway Volkswagen, a New York-based dealer. The spouses met a car
accident in Oklahoma purportedly due to the defective design and placement A class suit for damages was filed against Ferdinand Marcos before the
of their car’s gas tank and fuel system. The Robinsons sued before an District Court of Hawaii. The plaintiffs allegedly suffered torture,
Oklahoma court. “disappearance,” and summary execution during Marcos’ tenure as President.
The court ruled in favor of plaintiffs, awarding nearly $2 million in damages.
HELD: The Oklahoma court has no jurisdiction. Exercise of personal
jurisdiction over a non-resident may be justified only if there exist minimum HELD: The district court had jurisdiction over the plaintiffs’ claims. There are
contacts between the defendant and the forum state. There is a total absence three requisites for the exercise of jurisdiction under the Alien Tort Statute:
of such contacts in this case. Petitioners carry on no activity whatsoever in 1. A claim by an alien;
Oklahoma. The only connection with that state is that the accident occurred 2. A tort; and
there. This alone cannot justify the exercise of jurisdiction. 3. A violation of international law.
The ATS applies to conduct that occurred abroad in the absence of any
3. THE ALIEN TORT ACT limitation as to the locus of the injury.

28 U.S.C. §1350. The district courts shall have original jurisdiction of any civil Filartiga v. Peña-Irala
action by an alien for a tort only, committed in violation of the law of nations
or a treaty of the United States. The Filartigas were Paraguayan citizens who sought political asylum in the
US. There, they filed a suit for wrongful death against Peña-Irala, likewise a
• The Alien Tort Statute was enacted in 1789. citizen of Paraguay. Plaintiffs alleged that Peña-Irala caused the kidnapping
o Rationale: “compliance with the law of nations was a and torture of Filartiga’s son as retaliation for his political activities.
fundamental concomitant of Nationhood… and the nation’s Summons was served on Peña-Irala in Brooklyn, where he was facing
obligation to comply with a particular legal duty was deportation. The trial court dismissed the complaint for lack of jurisdiction
supplemented by a moral duty.” over the subject matter.
o Purposes:
! Stability of commercial relations and national HELD: The US courts may exercise jurisdiction under the ATS. Common law
security. courts of general jurisdiction adjudicate transitory tort claims between
! Recognition of the obligation of every state to the law individuals over whom they exercise personal jurisdiction, wherever the tort
of nations as a means to avert war and chaos. occurred. A state or nation has a legitimate interest in the orderly resolution
• Hilao v. Estate of Ferdinand Marcos: Victims of human rights abuses of disputes among those within its borders, and where the lex loci delicti
during the Marcos administration filed suit for damages before the commissi is applied, it is an expression of comity to give effect to the laws of
District Court of Hawaii. the stat where the wrong occurred. In the case at bar, the acts complained of,
o US Court of Appeals upheld jurisdiction over a tort claim of an if proven, would constitute a violation of Paraguayan law.
alien against an official of his own government for torture
committed within that government’s internal jurisdiction.

Ish Guidote Page 82 of 107


• Trajano v. Marcos: Agapita Trajano sued Imee Marcos and Fabian Ver internationally recognized rights and so does not constitute a violation of the
for the wrongful death of her son Archimedes. District Court awarded law of nations.
$4.4 million in damages.
o US DOJ filed an amicus brief with a narrowed interpretation of • Violation of human rights is a universal evil which warrants the
the scope of the ATS. exercise of jurisdiction over completely foreign tort cases under the
! US jurisdiction over foreign tort actions limited to ATS. This is so even though:
those which the US might be held accountable to the o There are no significant contacts between the forum, the
offended nation if it did not extend protection of its parties and the events; or
laws. o There is no substantial state interest in the case other than
• If accountability were to be made the basis of jurisdiction under the compliance with international law.
ATS, it would present a significant setback to the advancement of • In order for the ATS to apply, it must be established that the tortious
international law. conduct violated an internationally protected human right.
• Furthermore, it has been recognized that individuals are subjects of
PIL and are protected against abuses committed by their own 4. PHILIPPINE RULE ON FOREIGN TORTS
governments. • There is no specific statutory law governing the enforcement of
• In 1789, when the ATS was passed, the drafters of the Judiciary Act claims for damages arising from foreign torts.
could not have expected the provision to extend to a case like o It is submitted that Philippine courts may exercise jurisdiction
Filartiga because they could not have imagined international law over such cases provided the defendant can be served with
extending so far. summons in the Philippines.
o How could a tort committed by a citizen of a foreign country • It is suggested that we should follow the English Rule – tort
on a fellow citizen within that country ever amount to a committed abroad is actionable in the country where it was
violation of international law? committed and also under Philippine law.
• In Guinto v. Marcos, the US District Court excluded free speech claims o There would be no choice of law problem because the
from the coverage of the ATS. Philippine law on torts would be applicable regardless of the
forum chosen.
Guinto v. Marcos o Phillips v. Eyre: Plaintiff was arrested and imprisoned in
Jamaica upon orders of the defendant who was then the
Plaintiffs, Filipinos residing in California, filed suit against Ferdinand Marcos Governor of Jamaica. He brought suit for damages before an
alleging violation of their First Amendment rights. Particularly, Pres. Marcos English court.
seized and restrained distribution of the film 100 Days in September, which ! Defense: martial law was declared, acts were lawful.
plaintiffs produced and directed. Marcos arranged for plaintiffs’ arrest, ! HELD: Defendant not liable.
prompting them to flee the country. Marcos filed a motion to dismiss on the ! In order to found a suit in England for a wrong alleged
ground of lack of jurisdiction, among others. to have been committed abroad, two conditions must
be fulfilled:
HELD: The District Court of California has no jurisdiction over the subject • First, the wrong must be of such a character
matter of the complaint. Among the requisites for exercise of jurisdiction that it would have been actionable if
under the ATS is a violation of international law. A violation of the law of committed in England; and
nations arises only when there has been a violation by one or more • Second, the act must not have been
individuals of those standards, rules or customs (a) affecting the relationship justifiable by the law of the place where it
between states or between an individual and a foreign state, and (b) used by was done.
those states for their common good and/or in dealings inter se. A violation of
the First Amendment right of free speech does not rise to the level of

Ish Guidote Page 83 of 107


• Time v. Reyes was an opportunity for the Philippine SC to clarify the F. LEX LOCI DELICTI
Philippine conflicts torts rule. But instead, it characterized the issue • Nullum crimen sine lege (no crime without law) – in order for a person
as one of procedure than of PrIL. to be punished for an act, such act should have been made
punishable as a crime by law.
Time, Inc. v. Reyes, et al. • Crimes may be defined by:
o Municipal law; and
Villegas and Enrile filed a libel suit against the publisher of Time Magazine, a o More recently, international law.
US corporation having its principal office in New York. The case was filed • NCC14 provides:
before the CFI of Rizal. Time filed a motion to dismiss on the ground that
venue was improperly laid. The trial court deferred action on the MTD as the Penal laws and those of public security and safety shall be obligatory
grounds raised by Time did not appear indubitable. Time then filed a petition upon all who live or sojourn in the Philippine territory, subject to the
for prohibition. principles of public international law and to treaty stipulations. (8a)

HELD: Venue was improperly laid. The Revised Penal Code lays down the • As a general rule, criminal laws have no extraterritorial effect.
rules on venue in libel cases. If the offended party is a public officer, it may • What if the offender was never physically present in the jurisdiction
only be filed (1) where he holds office, or (2) where the libelous article was where the crime was consummated?
first printed and published. The private complainants in this case held office o US courts: constructive presence is sufficient.
in Manila. Hence, the case should have been filed before the CFI of Manila. • Lex loci delicti (law of the place where the crime is committed) is
The alternative venue cannot be availed of because the libelous article was controlling since it determines the specific law by which the criminal
first printed and published outside the Philippines. is to be penalized and designates the state that has jurisdiction to
punish him.
• If the Court had characterized Time as a conflicts torts case: o Also known as locus regit actum
o Following lex loci delicti commissi, Philippine law would not
apply since tortious conduct took place in another country. Exceptions to the territoriality rule
o Following the modern approach (most significant
relationship), Philippine law would apply because of the 1. Crimes committed by state officials, diplomatic representatives and
contacts between the forum and the parties. officials of recognized international organizations.
• Basis is the doctrine of state immunity from suit.
E. DISTINGUISHING BETWEEN TORTS AND CRIMES • US v. Guinto: doctrine applies to acts committed by officials in their
official capacity.
TORT CRIME o Garcia v. Chief of Staff: if the judgment against such officials
Local – perpetrator can be sued only will require the state itself to perform an affirmative act to
Transitory and personal – tortfeasor
in the state where the crime was satisfy the same, such as the appropriation of the amount
may be sued wherever he is found
committed needed to pay the damages awarded against them, the suit
Injury to the state – an affront against must be regarded as against the state itself although it has
Injury to an individual who may be the sovereignty and good order of the not been formally impleaded.
situated in any place state within whose jurisdiction it • A distinction is made between acts performed in a sovereign capacity
occurs (jure imperii) and private, commercial or proprietary acts (jure
Purpose of a penal law is to punish gestionis).
Purpose of tort law is to indemnify
and reform perpetrators and to deter • Wylie v. Rarang: Wylie and Williams caused the publication of a US
the victim for injuries sustained
them from violating the law Navy Newsletter mentioning [Auring] Rarang as “a disgrace to her
division and to the Office of the Provost Marshal.” She sued for libel.

Ish Guidote Page 84 of 107


o Court held that ultra vires acts cannot be part of official duty. good order of the territorial sea;
o Killing a person in cold blood while on patrol duty, running
over a child while driving with reckless imprudence on an (c) if the assistance of the local authorities has been requested by the
official trip, or slandering a person during office hours could master of the ship or by a diplomatic agent or consular officer of the
not possibly be covered by the immunity agreement. Our laws flag State; or
and, we presume, those of the United States do not allow the
commission of crimes in the name of official duty. (d) if such measures are necessary for the suppression of illicit traffic
in narcotic drugs or psychotropic substances.
Liang v. People
2. The above provisions do not affect the right of the coastal State to
Liang worked as an economist with the ADB. He called one of the clerks a take any steps authorized by its laws for the purpose of an arrest or
bitch. Two cases for grave oral defamation were filed against him. The MeTC investigation on board a foreign ship passing through the territorial
received an “office of protocol” from the DFA stating that Liang was covered sea after leaving internal waters.
by immunity from legal process under §45 of the agreement between the ADB
and the Philippine Government. The MeTC dismissed the cases. 3. In the cases provided for in paragraphs 1 and 2, the coastal State
shall, if the master so requests, notify a diplomatic agent or consular
HELD: Liang does not enjoy immunity from suit. Courts cannot blindly adhere officer of the flag State before taking any steps, and shall facilitate
and take on its face the communication from the DFA that petitioner is contact between such agent or officer and the ship's crew. In cases
covered by any immunity. The due process rights of the prosecution were of emergency this notification may be communicated while the
violated when the MeTC dismissed the cases motu proprio. Even assuming measures are being taken.
that petitioner is indeed immune from suit, the immunity extends only to acts
done in “official capacity.” Slandering a person cannot possibly be part of 4. In considering whether or in what manner an arrest should be
official duty. made, the local authorities shall have due regard to the interests of
navigation.
2. Crimes committed on board a foreign vessel even if it is within the
territorial waters of the coastal state. 5. Except as provided in Part XII or with respect to violations of laws
• Philippine courts do not acquire jurisdiction over offenders. and regulations adopted in accordance with Part V, the coastal State
• Philippine laws cannot apply unless the crime disturbs our peace and may not take any steps on board a foreign ship passing through the
order. territorial sea to arrest any person or to conduct any investigation in
• UNCLOS, Art. 27 provides: connection with any crime committed before the ship entered the
territorial sea, if the ship, proceeding from a foreign port, is only
Criminal jurisdiction on board a foreign ship passing through the territorial sea without entering internal waters.

1. The criminal jurisdiction of the coastal State should not be EAP: The UNCLOS follows the French Rule.
exercised on board a foreign ship passing through the territorial sea
to arrest any person or to conduct any investigation in connection United States v. Fowler
with any crime committed on board the ship during its passage, save
only in the following cases: Fowler was accused of theft of 16 bottles of champagne on board the Lawton,
a US vessel then navigating the high seas. The complaint was filed before the
(a) if the consequences of the crime extend to the coastal State; CFI of Manila. Fowler filed a demurrer claiming lack of jurisdiction as the
crime was committed on the high seas. The CFI dismissed the case.
(b) if the crime is of a kind to disturb the peace of the country or the

Ish Guidote Page 85 of 107


HELD: The CFI had no jurisdiction. Act No. 400 confers jurisdiction upon the 3. Crimes which, although committed by Philippine nationals abroad, are
CFIs over any offense committed on the high seas, or within any of the punishable under Philippine law.
navigable waters of the Philippine Archipelago, on board a ship or watercraft • RPC2 provides:
of any kind registered or licensed in the Philippine Islands. The vessel Lawton
was of US registry. Application of its provisions. — Except as provided in the treaties and
laws of preferential application, the provisions of this Code shall be
People v. Wong Cheng enforced not only within the Philippine Archipelago, including its
atmosphere, its interior waters and maritime zone, but also outside of
Wong Cheng allegedly smoked opium on board the English merchant vessel its jurisdiction, against those who:
Changsa while it was docked in Manila Bay. The CFI dismissed the case for
lack of jurisdiction. 1. Should commit an offense while on a Philippine ship or airship;

HELD: The CFI had jurisdiction. Under the French Rule, crimes committed 2. Should forge or counterfeit any coin or currency note of the
aboard foreign merchant vessels should not be prosecuted in the courts of Philippine Islands or obligations and securities issued by the
the country within whose territorial jurisdiction they were committed, unless Government of the Philippine Islands;
their commission affects the peace and security of the territory. But under the
English Rule, which is followed in this jurisdiction, crimes perpetrated under 3. Should be liable for acts connected with the introduction into these
such circumstances are in general triable in the courts of the country within islands of the obligations and securities mentioned in the presiding
territory they were committed. Here, the crime was committed within the number;
territorial jurisdiction of the City of Manila, 2.5 miles from the shore.
4. While being public officers or employees, should commit an
United States v. Look Chaw offense in the exercise of their functions; or

Cebu port authorities inspected the steamship Erroll which was of English 5. Should commit any of the crimes against national security and the
nationality. There they found two sacks of opium. Look Chow admitted that law of nations, defined in Title One of Book Two of this Code.
he bought the opium from Hong Kong and intended to sell the same in Mexico
or Vera Cruz. A complaint was filed against him before the CFI of Cebu for • Reason for extraterritorial application of penal laws: national interest
possession and sale of opium. The CFI overruled Look Chow’s demurrer is imperiled by the acts enumerated.
grounded upon lack of jurisdiction.
Chapter XVII
HELD: The CFI had jurisdiction. GENERAL RULE: Mere possession of a thing CHOICE OF LAW AFFECTING CORPORATIONS
of prohibited use in these Islands, aboard a foreign vessel in transit, in any of AND OTHER JURIDICAL ENTITIES
their ports, does not constitute a crime triable by the courts of this country, on
account of such vessel being considered as an extension of its own A. CORPORATIONS
nationality. EXCEPTION: When the article, whose use is prohibited within the
Philippine Islands, in the present case a can of opium, is landed from the Section 2, Corporation Code. Corporation defined. - A corporation is an
vessel upon Philippine soil, thus committing an open violation of the laws of artificial being created by operation of law, having the right of succession and
the land. This case falls under the exception. the powers, attributes and properties expressly authorized by law or incident
to its existence. (2)
EAP: This case applied the French Rule.
Section 123. Definition and rights of foreign corporations. - For the purposes
of this Code, a foreign corporation is one formed, organized or existing under

Ish Guidote Page 86 of 107


any laws other than those of the Philippines and whose laws allow Filipino Alabama. The court ruled in favor of Earle holding that since the Bank was
citizens and corporations to do business in its own country or state. It shall incorporated in Georgia, it could not lawfully exercise its power in Alabama.
have the right to transact business in the Philippines after it shall have
obtained a license to transact business in this country in accordance with this HELD: Bank of Augusta may sue in Alabama. Under the principle of comity,
Code and a certificate of authority from the appropriate government agency. English law has recognized the right of foreign corporations to enter into
(n) contracts within its jurisdiction. There is no reason to exclude them when the
contracts are not contrary to state policy or injurious to its interests. In the
1. PERSONAL LAW OF A CORPORATION case at bar, there is no showing that the contract entered into by the parties is
• Law of the state where it is incorporated. repugnant to some public policy of Alabama. The parties entered into the
• Since a corporation is an artificial being, it only has the rights and contracts in good faith, and no suspicion was entertained by either of them
powers conferred upon it in its charter. that these engagements could not be enforced.
• The state of incorporation may withhold from a corporation the power
to enter into certain contracts. • Four basic theories drawn from the case of Bank of Augusta:
o If it enters into such contract in another state, the contract is 1. A corporation, being a creature of law, has no legal status
void. beyond the bounds of the sovereignty within which it was
created;
M.E. Gray v. Insular Lumber Company 2. A corporation cannot exercise powers not granted by its
corporate charter or by the laws of the state of incorporation;
Gray is a stockholder of Insular Lumber, a resident foreign corporation 3. No state is under any obligation to adhere to the doctrine of
organized under the laws of New York. He filed a complaint to be allowed to comity. Every state has the power to refuse to recognize or
inspect the corporate books. The corporation opposed invoking the New York prevent the foreign corporation from acting within its
Stock Corporation Law which granted the right of inspection only to jurisdiction; and
stockholders owning 3% of the capital stock of the corporation. The CFI 4. A state is not obliged to grant to a foreign corporation the
dismissed the complaint. privileges and immunities common to the citizen of that
state.
HELD: Gray has no right to examine the corporate books. Insular Lumber • A corporation has no legal status beyond the bounds of the
being a corporation organized in New York, the laws of that state apply. He sovereignty by which it was created.
would have been allowed to exercise the right of inspection under common o It cannot migrate to another sovereignty.
law had he alleged that: o But a corporation can act in another state with the latter’s
• He seeks the information for an honest purpose; express or implied consent.
• Inspection would protect his rights as a stockholder; or o In many US and PH court decisions, it has been held that a
• He would exercise the right in good faith, for a specific or honest foreign corporation may sue in the courts of another state.
purpose. ! But how can an entity that does not exist sue in a
Gray did not allege any of these. foreign state if such state does not recognize the
legal personality of the principal?
Anglo-American Legal Theory on Corporation • Paul v. Virginia: a state may impose any term it may desire as a
prerequisite to admission.
Bank of Augusta v. Earle o Exception: commerce clause – prohibits a state from
imposing conditions on corporations engaged in interstate
The Bank of Augusta incorporated in Georgia. Earle, a resident of Alabama, commercial activities and provides the basis of federal power
discounted bills of exchange with an agent of the Bank in Alabama. When the to regulate interstate commerce.
notes fell due, Earle failed to pay. The Bank thereafter filed a collection suit in

Ish Guidote Page 87 of 107


o A corporation is also a “person” protected by the due process twenty-five years, and under such terms and conditions as may be
and equal protection clauses of the constitution. provided by law. In cases of water rights for irrigation, water supply
o A state cannot impose “unconstitutional conditions” which fisheries, or industrial uses other than the development of water
require the corporation to give up its constitutional rights power, beneficial use may be the measure and limit of the grant.
either as a prerequisite to doing business in the state or to
avoid being removed therefrom. The State shall protect the nation's marine wealth in its archipelagic
o Although a corporation is a person, it is not deemed a waters, territorial sea, and exclusive economic zone, and reserve its
“citizen” entitled to privileges given by the state to individual use and enjoyment exclusively to Filipino citizens.
citizens.
! A grant of corporate existence is a grant of special The Congress may, by law, allow small-scale utilization of natural
privileges to the corporations, enabling them to act resources by Filipino citizens, as well as cooperative fish farming,
for certain designated purposes as a single individual, with priority to subsistence fishermen and fish- workers in rivers,
and exempting them from individual liability. lakes, bays, and lagoons.
! If the right asserted of the foreign corporation, when
composed of citizens of one State, to transact The President may enter into agreements with foreign-owned
business in other States were even restricted to such corporations involving either technical or financial assistance for
business as corporations of those States were large-scale exploration, development, and utilization of minerals,
authorized to transact, it would still follow that those petroleum, and other mineral oils according to the general terms and
States would be unable to limit the number of conditions provided by law, based on real contributions to the
corporations doing business therein. economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of
2. EXCEPTIONS TO THE RULE OF INCORPORATION TEST local scientific and technical resources.

a. Constitutional and Statutory Restrictions The President shall notify the Congress of every contract entered into
• A state may by legislation exclude a foreign corporation altogether, in accordance with this provision, within thirty days from its
subject to constitutional limitations, or prescribe any conditions it execution.
may see fit as prerequisite to the corporation’s right to do business
within its territory. Section 10. The Congress shall, upon recommendation of the
• Art. XII of the 1987 Constitution provides: economic and planning agency, when the national interest dictates,
reserve to citizens of the Philippines or to corporations or
Section 2. All lands of the public domain, waters, minerals, coal, associations at least sixty per centum of whose capital is owned by
petroleum, and other mineral oils, all forces of potential energy, such citizens, or such higher percentage as Congress may prescribe,
fisheries, forests or timber, wildlife, flora and fauna, and other natural certain areas of investments. The Congress shall enact measures
resources are owned by the State. With the exception of agricultural that will encourage the formation and operation of enterprises whose
lands, all other natural resources shall not be alienated. The capital is wholly owned by Filipinos.
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may In the grant of rights, privileges, and concessions covering the
directly undertake such activities, or it may enter into co-production, national economy and patrimony, the State shall give preference to
joint venture, or production-sharing agreements with Filipino citizens, qualified Filipinos.
or corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a The State shall regulate and exercise authority over foreign
period not exceeding twenty-five years, renewable for not more than investments within its national jurisdiction and in accordance with its

Ish Guidote Page 88 of 107


national goals and priorities. • Daimler Co. v. Continental Tire and Rubber Co.: A business
corporation incorporated in England, with a British secretary, but
Pedro Palting v. San Jose Petroleum, Inc. whose shares were controlled by Germans, was considered an enemy
corporation.
San Jose Petroleum is a corporation organized under the laws of Panama. It o Thus, prohibited from trading in England.
petitioned the SEC for registration and licensing for sale of voting trust o Place of incorporation is not conclusive in determining
certificates. The proceeds of the sale would be used to finance the operations whether a corporation is an enemy corporation.
of San Jose Oil Co., a mining corporation. Petitioners are prospective o The company itself is incapable of enmity or amity, since
investors in Petroleum. They opposed the registration for being violative of such are attributable only to human beings.
the foreign ownership restrictions in the Constitution. o The company had the predominant character of its
shareholders who were Germans.
HELD: San Jose Petroleum is not an American enterprise, hence, it is not
entitled to parity rights under the Constitution. It is not directly controlled by EAP: The court in Daimler ruled the same way as in Filipinas but it “looked
US citizens because it is owned and controlled by Oil Investments, a into the feelings” of the stockholders.
Panamanian corporation. Neither is it indirectly controlled by US citizens,
because Oil Investments is in turn owned by two Venezuelan corporations. 3. DOMICILE OR RESIDENCE OF FOREIGN CORPORATIONS
The nationality of the stockholders of the two Venezuelan corporations
cannot be determined at any given time as the stocks of such corporations Article 51, Civil Code. When the law creating or recognizing them, or any other
are being traded in the New York Stock Exchange. There is a difficulty in provision does not fix the domicile of juridical persons, the same shall be
determining “indirect” control as the ownership or control cannot be traced ad understood to be the place where their legal representation is established or
infinitum. where they exercise their principal functions. (41a)

b. Control Test During War • A foreign corporation that has been licensed to do business in the
• In wartime, the courts may pierce the veil of corporate fiction and look Philippines acquires a domicile here.
into the nationality of the controlling stockholders to determine the o Domicile is synonymous with residence in this case. Although
“citizenship” of the corporation. traditionally:
! Domicile – state of incorporation
Filipinas Compañia de Seguros v. Christern, Huenefeld & Co., Inc. ! Residence – where the center of control reposes
• Why does the Corporation Code require a foreign corporation to
Respondent obtained an insurance policy from petitioner covering obtain a license before it can do business here?
merchandise in a building in Binondo. During the Japanese military o To prevent such corporations from acquiring domicile here
occupation, the building and the merchandise were burned. Respondent without first taking the steps necessary to render them
submitted its claim to petitioner but the same was denied because it was an amenable to suit in the local courts.
enemy corporation controlled by German nationals. Hence, the policy ceased
to be effective. State Investment House, Inc. v. Citibank, N.A.

HELD: Petitioner is not obligated to pay respondent. Majority of the Three creditor banks filed a petition for the involuntary insolvency of
stockholders of respondent are German subjects. As such, the corporation Consolidated Mines, Inc. (CMI). Petitioner State Investment House (SIHI)
became an enemy corporation upon the outbreak of World War II. However, opposed as the Banks were not “resident creditors” of CMI in contemplation
petitioner should return to respondent any premiums paid after the of the Insolvency Law. The trial court dismissed the case for lack of
declaration of war. jurisdiction, but the CA reversed.

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HELD: The Banks are “resident creditors” for purposes of the Insolvency Law. 10. Such additional information as may be necessary or appropriate
Under the NIRC, a resident foreign corporation is a foreign corporation in order to enable the Securities and Exchange Commission to
engaged in trade or business in the Philippines. They are likened to domestic determine whether such corporation is entitled to a license to
corporations. A corporation may have a residence (where it transacts transact business in the Philippines, and to determine and assess the
business) separate from its domicile (state of incorporation). What makes a fees payable.
corporation a resident is not the grant of a license but its actually being in the
Philippines and doing business here. Attached to the application for license shall be a duly executed
certificate under oath by the authorized official or officials of the
4. JURISDICTION OVER FOREIGN CORPORATIONS jurisdiction of its incorporation, attesting to the fact that the laws of
• The dictum in Bank of Augusta v. Earle to the effect that a corporation the country or state of the applicant allow Filipino citizens and
has no existence outside the incorporating state has been abandoned corporations to do business therein, and that the applicant is an
in view of foreign investments. existing corporation in good standing. If such certificate is in a
• Prevailing view: With the consent of a state, a foreign corporation foreign language, a translation thereof in English under oath of the
shall be recognized and will be allowed to transact business in that translator shall be attached thereto.
state.
• Relevant provisions of the Corporation Code provide: The application for a license to transact business in the Philippines
shall likewise be accompanied by a statement under oath of the
Section 125. Application for a license. - A foreign corporation president or any other person authorized by the corporation, showing
applying for a license to transact business in the Philippines shall to the satisfaction of the Securities and Exchange Commission and
submit to the Securities and Exchange Commission a copy of its other governmental agency in the proper cases that the applicant is
articles of incorporation and by-laws, certified in accordance with solvent and in sound financial condition, and setting forth the assets
law, and their translation to an official language of the Philippines, if and liabilities of the corporation as of the date not exceeding one (1)
necessary. The application shall be under oath and, unless already year immediately prior to the filing of the application.
stated in its articles of incorporation, shall specifically set forth the
following: Foreign banking, financial and insurance corporations shall, in
addition to the above requirements, comply with the provisions of
xxx existing laws applicable to them. In the case of all other foreign
corporations, no application for license to transact business in the
3. The name and address of its resident agent authorized to accept Philippines shall be accepted by the Securities and Exchange
summons and process in all legal proceedings and, pending the Commission without previous authority from the appropriate
establishment of a local office, all notices affecting the corporation; government agency, whenever required by law. (68a)

4. The place in the Philippines where the corporation intends to Section 126. Issuance of a license. - If the Securities and Exchange
operate; Commission is satisfied that the applicant has complied with all the
requirements of this Code and other special laws, rules and
5. The specific purpose or purposes which the corporation intends to regulations, the Commission shall issue a license to the applicant to
pursue in the transaction of its business in the Philippines: Provided, transact business in the Philippines for the purpose or purposes
That said purpose or purposes are those specifically stated in the specified in such license. Upon issuance of the license, such foreign
certificate of authority issued by the appropriate government agency; corporation may commence to transact business in the Philippines
and continue to do so for as long as it retains its authority to act as a
xxx corporation under the laws of the country or state of its incorporation,
unless such license is sooner surrendered, revoked, suspended or

Ish Guidote Page 90 of 107


annulled in accordance with this Code or other special laws. principal office. The sending of such copy by the Commission shall be
necessary part of and shall complete such service. All expenses
xxx incurred by the Commission for such service shall be paid in advance
by the party at whose instance the service is made.
Section 127. Who may be a resident agent. - A resident agent may be
either an individual residing in the Philippines or a domestic In case of a change of address of the resident agent, it shall be his or
corporation lawfully transacting business in the Philippines: Provided, its duty to immediately notify in writing the Securities and Exchange
That in the case of an individual, he must be of good moral character Commission of the new address. (72a; and n)
and of sound financial standing. (n)
Foreign Corporations Doing Business are Bound by Philippine Law
Section 128. Resident agent; service of process. - The Securities and • §129, Corporation Code states:
Exchange Commission shall require as a condition precedent to the
issuance of the license to transact business in the Philippines by any Law applicable. - Any foreign corporation lawfully doing business in
foreign corporation that such corporation file with the Securities and the Philippines shall be bound by all laws, rules and regulations
Exchange Commission a written power of attorney designating some applicable to domestic corporations of the same class, except such
person who must be a resident of the Philippines, on whom any only as provide for the creation, formation, organization or dissolution
summons and other legal processes may be served in all actions or of corporations or those which fix the relations, liabilities,
other legal proceedings against such corporation, and consenting responsibilities, or duties of stockholders, members, or officers of
that service upon such resident agent shall be admitted and held as corporations to each other or to the corporation.
valid as if served upon the duly authorized officers of the foreign
corporation at its home office. Any such foreign corporation shall • §12, Rule 14, ROC as amended by A.M. No. 11-3-6-SC embodies the
likewise execute and file with the Securities and Exchange rules with regard to service of summons:
Commission an agreement or stipulation, executed by the proper
authorities of said corporation, in form and substance as follows: Section 12. Service upon foreign private juridical entity. —When the
defendant is a foreign private juridical entity which has transacted
"The (name of foreign corporation) does hereby stipulate
business in the Philippines, service may be made on its resident
and agree, in consideration of its being granted by the
agent designated in accordance with law for that purpose, or, if there
Securities and Exchange Commission a license to transact
business in the Philippines, that if at any time said be no such agent, on the government official designated by law to
corporation shall cease to transact business in the that effect, or on any of its officers or agents within the Philippines.
Philippines, or shall be without any resident agent in the
Philippines on whom any summons or other legal If the foreign private juridical entity is not registered in the Philippines
processes may be served, then in any action or proceeding or has no resident agent, service may, with leave of court, be effected
arising out of any business or transaction which occurred out of the Philippines through any of the following means:
in the Philippines, service of any summons or other legal
process may be made upon the Securities and Exchange
a) By personal service coursed through the appropriate court in the
Commission and that such service shall have the same
force and effect as if made upon the duly-authorized
foreign country with the assistance of the Department of Foreign
officers of the corporation at its home office." Affairs;

Whenever such service of summons or other process shall be made b) By publication once in a newspaper of general circulation in the
upon the Securities and Exchange Commission, the Commission country where the defendant may be found and by serving a copy of
shall, within ten (10) days thereafter, transmit by mail a copy of such the summons and the court order by-registered mail at the last
summons or other legal process to the corporation at its home or known address of the defendant;

Ish Guidote Page 91 of 107


Atlantic Mutual Insurance Co. v. Cebu Stevedoring Co., Inc.
c) By facsimile or any recognized electronic means that could
generate proof of service; or Atlantic and Continental insured shipments of copra to be delivered by Cebu
Stevedoring to P&G. The shipments arrived in bad order. Plaintiffs paid the
d) By such other means as the court may in its discretion direct. consignees and were subrogated to the rights of the latter. They filed suit to
collect from Cebu Stevedoring. The CFI dismissed the complaint but gave
• Summons may also be served through diplomatic channels. plaintiffs 10 days to amend their complaint to include an averment that they
• Recall International Shoe: Minimum contacts required between were licensed to do business in the Philippines.
defendant and state so as not to offend traditional notions of fair play
and substantial justice. HELD: Capacity to sue must be averred in the complaint. The general rule
under the old Rules of Court is that such averment is not necessary except to
5. RIGHT OF FOREIGN CORPORATIONS TO BRING SUIT the extent required to show jurisdiction of the court. However, an exception
• A foreign corporation may not file a case before a Philippine court arises where the law denies a foreign corporation to maintain suit unless it
unless it has a license to transact business in the Philippines. has previously complied with a necessary requirement. In such a case,
• §133 of the Corporation Code provides: compliance with the requirement, or the fact that the corporation is exempt
therefrom, becomes a necessary averment in the complaint. In the case at
Doing business without a license. - No foreign corporation bar, Atlantic must either show that (1) it is engaged in business in the
transacting business in the Philippines without a license, or its Philippines and has a license for that purpose, or (2) it is not so engaged and
successors or assigns, shall be permitted to maintain or intervene in is suing upon an isolated transaction.
any action, suit or proceeding in any court or administrative agency of
the Philippines; but such corporation may be sued or proceeded Aboitiz Shipping Corporation v. Insurance Company of North America
against before Philippine courts or administrative tribunals on any
valid cause of action recognized under Philippine laws. (69a) ICNA insured a shipment of wooden work tools and benches to be deliverd by
Aboitiz to STIP. The cargo was damaged upon arrival. ICNA paid the
Home Insurance Company v. Eastern Shipping Lines, Inc. consignee and was issued a subrogation receipt. It sued Aboitiz. Aboitiz
moved to dismiss on the ground that ICNA was doing business without a
Petitioner sued respondent as the subrogee of shippers whose items arrived license.
in bad order due to the fault or negligence of respondent. The trial court
dismissed the complaints as Home Insurance was a foreign corporation not HELD: ICNA, as subrogee of the consignee, is the real-party-in-interest
licensed to do business in the Philippines. clothed with personality to file the present suit. Its cause of action is founded
on the right of subrogation under Art. 2207 of the Civil Code. It cannot be
HELD: Home Insurance had capacity to sue. §69 of the Corporation Code considered doing business in the Philippines. Hence, it may maintain suit
does not provide that contracts entered into without the requisite license from even without the requisite license. Aboitiz is liable for damages under Art.
the SEC are null and void. The only consequence of the lack of a license is 1735 of the Civil Code, as it failed to prove that it exercised extraordindary
that the foreign corporation cannot sue before Philippine courts. In this case, diligence as required by law.
Home Insurance did not have a license to do business at the time it entered
into the insurance contracts. However, by the time it filed the complaint, it Cargill, Inc. v. Intra Strata Assurance Co.
already had a license. Its subsequent registration cured the lack of capacity
at the time of the execution of the contracts. Cargill purchased molasses from NMC. Intra Strata issued a performance
bond to ensure compliance with the obligation. As NMC defaulted, Cargill filed
a complaint against Intra Strata. The RTC held Intra Strata liable to Cargill, but
the CA reversed as Cargill had no license to do business in the Philippines.

Ish Guidote Page 92 of 107


and PH patent offices. It sued Jacinto for manufacturing
HELD: As Cargill was not doing business in the Philippines, it did not need to “Custombuilt” shoes of identical appearance as Chuck Taylor.
have a license before it could sue. The burden was on Intra Strata to show o HELD: Converse has capacity to sue.
that Cargill’s activities in the Philippines were not just casual or occasional, ! GENERAL RULE: A foreign corporation doing business
but so systematic and regular as to manifest continuity and permanence of without a license cannot seek redress from our
activity to constitute doing business in the Philippines. This, it failed to do. courts “to enforce any legal or contract rights arising
from, or growing out, of any business which it has
6. EXCEPTIONS TO THE LICENSE REQUIREMENT transacted in the Philippine Islands.”
! EXCEPTION: Where the purpose of a suit is "to protect
a. Isolated Transactions its reputation, its corporate name, its goodwill,
• Isolated business transaction – occasional, incidental and casual, not whenever that reputation, corporate name or goodwill
of a character to indicate a purpose to engage in business. have, through the natural development of its trade,
• Does not constitute doing business as contemplated by law. established themselves," an unlicensed foreign
• An activity is isolated if there is no continuity of conduct and intention corporation may sue in the Philippines. (Western
on the part of the foreign corporation to establish a continuous Equipment & Supply Co. v. Reyes)
business within the state. o Converse does not have a branch office in the Philippines nor
does it do business here. Hence, it is not disqualified from
Eastboard Navigation, Ltd. v. Juan Ysmael and Company, Inc. filing and prosecuting this action for unfair competition.
! Furthermore, it has a cause of action pursuant to the
A charter party was executed between Eastboard as shipowner and Juan Paris Convention for the Protection of Industrial
Ysmael as charterer. The contract contained an arbitration clause in favor of Property. Both the Philippines and the US are
New York. A dispute was submitted to arbitration whereby Juan Ysmael was signatories to such convention.
ordered to pay Eastboard $53,037. Eastboard Navigation sued Juan Ysmael
before the CFI to enforce the arbitration decree. Leviton Industries v. Salvador

HELD: Eastboard had personality to sue even without a license as it was Leviton Manufacturing is a US corporation whose products are exported to
suing on an isolated transaction. Although Eastboard has already entered into the Philippines. It filed a complaint for unfair competition against Leviton
a previous charter party with the NARIC, these two isolated transactions do Industries, a domestic corporation. The latter filed a motion to dismiss on the
not constitute doing business within the Philippines within the purview of §69 ground of lack of capacity to sue.
of the Corporation Law.
HELD: Leviton Manufacturing failed to establish its capacity to sue. Under
b. Action to protect trademark, trade name, goodwill, patent or for unfair §21-A of RA 166, the foreign corporation must have registered the trademark
competition with the Philippine Patent Office, or at the very least, be the assignee of such
• A foreign corporation doing business without a license may file a trademark before it may seek redress from our courts. Said section further
complaint for unfair competition. requires that the country of which the plaintiff foreign corporation or juristic
person is a citizen or domiciliary, grants to Filipino corporations or juristic
• Why? Equity considerations—
entities the same reciprocal treatment, either thru treaty, convention or law.
o To enjoin the unfair trader from pursuing the unlawful
Here, all that Leviton Manufacturing alleged was that it was a foreign
competition; and
corporation.
o To enable the aggrieved party to recover damages.
• Converse Rubber Corp. v. Jacinto Rubber and Plastic Co., Inc.:
Converse, a US corporation, was the manufacturer of “Converse
Chuck Taylor All Star” shoes, a trademark registered with both the US

Ish Guidote Page 93 of 107


c. Agreements fully transacted outside the Philippines Philippine Columbia Enterprises v. Lantin
• Policy: stabilization of commercial transactions.
• Universal Shipping Lines v. IAC: “On the issue of jurisdiction, we Katoh & Co., Ltd., a Japanese corporation, filed a complaint for the collection
uphold the appellate court's ruling that the private respondent may of a sum of money against Philippine Columbia Enterprises. The latter filed a
sue in Philippine courts upon the marine insurance policies issued by motion to dismiss alleging Katoh’s incapacity to sue. The trial court deferred
it abroad to cover international-bound cargoes shipped by a ruling on the motion as the grounds raised therein did not appear to be
Philippine carrier, even if it has no license to do business in this indubitable. Hence, Philippine Columbia filed this present petition for
country, for it is not the lack of the prescribed license (to do business certiorari. It objects to the deferment order issued by the trial court on the
in the Philippines) but doing business without such license, which ground that if it files a counterclaim against Katoh, it would constitute
bars a foreign corporation from access to our courts.” recognition of the latter’s capacity to sue.
• Furthermore, holding otherwise would make our country a haven for
unprincipled businessmen who enter into contracts in foreign HELD: Filing of a counterclaim would not constitute recognition of Katoh’s
countries. capacity to sue. A counterclaim partakes of the nature of a complaint and/or
cause of action against the plaintiff, so that if Philippine Columbian should
Hang Lung Bank, Ltd. v. Saulog file a counterclaim, the Katoh, would be a defendant thereto, in which case the
said foreign corporation would not be maintaining a suit and, consequently,
Cordova Chin Shin guaranteed Worlder Enterprises’ obligation to Hang Lung §69 of the Corporation Law would not apply.
Bank. When Worlder defaulted, the Bank sued Cordova before a Hong Kong
court. Default judgment was rendered against Cordova. The Bank thereafter 7. DEFINITION AND SCOPE OF “TRANSACTING BUSINESS”
sent a demand letter to his Philippine address. After it received no reply, it • A corporation has the capacity to act and contract, through its agent,
filed a collection suit before the RTC of Makati. in a state or country other than that in which it was created, with the
express or implied consent of that country or state.
HELD: Hang Lung Bank had capacity to sue. §69 of the Corporation Law • GENERAL RULE: A corporation can do business in a foreign state, the
applies only when the foreign corporation is doing business in the Philippines. state consent being presumed.
Here, Hang Lung Bank was not engaged in business in the Philippines; it • EXCEPTIONS:
merely pursued its claims against private respondent for a contract which o Where it is prohibited by express statutory authority or
was entered into and consummated outside the Philippines. Otherwise, the constitutional enactment;
court will be hampering the growth and development of business relations o Where it is seeking to perform acts contrary to the public
between Filipino citizens and foreign nationals. Worse, it will be allowing the policy of the state;
law to serve as a protective shield for unscrupulous Filipino citizens who have o Where it is seeking to exercise extraordinary and special
business relationships abroad. franchises; and
o Where it is seeking to perform acts which are not authorized
d. Petition filed is merely a corollary defense in a suit against it by the law of the state of its incorporation.
• Time, Inc. v. Reyes: By filing a petition for prohibition to prevent the • The Foreign Investments Act of 1991 defines “doing business,” thus:
trial court from exercising jurisdiction, a foreign corporation is not
“maintaining any suit” but is merely defending one against itself. [T]he phrase "doing business" shall include "soliciting orders, service
o No need to allege and prove capacity to sue. contracts, opening offices, whether called ‘liaison’ offices or
• Philippine Columbia Enterprises v. Lantin: If a domestic corporation branches; appointing representatives or distributors domiciled in the
files a counterclaim against a foreign corporation, there is no implied Philippines or who in any calendar year stay in the country for a
recognition of the latter’s capacity to sue. This is because the foreign period or periods totalling one hundred eighty (180) days or more;
corporation (original plaintiff), is now the defendant. Hence, the participating in the management, supervision or control of any
prohibition does not apply. domestic business, firm, entity or corporation in the Philippines; and

Ish Guidote Page 94 of 107


any other act or acts that imply a continuity of commercial dealings • Avon Insurance PLC v. CA: A reinsurance company is not doing
or arrangements, and contemplate to that extent the performance of business in a certain state merely because the property or lives which
acts or works, or the exercise of some of the functions normally are insured by the original insurer are located in that state.
incident to, and in progressive prosecution of, commercial gain or of o Reinsurance contract is separate and distinct from the
the purpose and object of the business organization: Provided, original insurance contract.
however, That the phrase ‘doing business’ shall not be deemed to
include mere investment as a shareholder by a foreign entity in Wang Laboratories, Inc. v. Mendoza
domestic corporations duly registered to do business, and/or the
exercise of rights as such investor; nor having a nominee director or Wang Laboratories, Inc. (WLI) is a US corporation. Its products are distributed
officer to represent its interests in such corporation; nor appointing a in the Philippines by Exxbyte Technologies Corporation (ETC). ETC contracted
representative or distributor domiciled in the Philippines which with ACCRA Law Office to install certain computer hardware and software.
transacts business in its own name and for its own account. ACCRA filed a complaint for breach of contract, impleading WLI, the US
corporation. WLI filed a motion to dismiss, but the same was denied as the
• It is important to determine whether a corporation is doing business RTC found that it had voluntary submitted itself to the court’s jurisdiction.
in the Philippines because it is the basis of the exercise of the courts’
jurisdiction over such corporation. HELD: The trial court has jurisdiction over the person of WLI. It was doing
o Exercise of jurisdiction is justified based on the corporation’s business in the Philippines as evidenced by the following acts: (1) installing at
“presence” within the forum state or on its consent to be least 26 different products in various domestic corporations, (2) registering
sued. its trade name with the PPO, (3) its controller visiting the Philippines to
• Quantum of business necessary to constitute “doing business” is conduct training programs, and (4) allowing ETC to use WLI’s registered logo
determined by the law of the state. and trademark. A single act is not necessarily an isolated transaction. Where
• A corporation may be considered to be doing business in a certain a single act or transaction of a foreign corporation is not merely incidental or
state if the latter is “a community into whose business life the casual but is of such character as distinctly to indicate a purpose to do other
defendant had significantly entered as determined by the quality, business in the State, such act constitutes doing business within the meaning
substantiality, continuity and systematic nature of its activities.” of statutes prescribing the conditions under which a foreign corporation may
• Bryant v. Finnish National Airline: The test for doing business is a be served with summons.
simple pragmatic one which leads us to conclude that the defendant
is suable in that state. Commissioner of Internal Revenue v. Japan Air Lines, Inc.
• Top-Weld Manufacturing, Inc. v. ECED, S.A.:
o There is no general rule to determine what constitutes “doing Japan Air Lines (JAL) appointed Philippine Airlines (PAL) as its resident agent
business.” in Manila. PAL sold plane tickets and reservations for cargo spaces on behalf
o Each case must be judged in light of its peculiar of JAL. The latter received a notice of assessment from the CIR for
circumstances. delinquency income taxes. The assessment was cancelled by the Court of
o Casual, isolated transactions do not come within the meaning Tax Appeals.
of the law.
o But when a single transaction is not merely incidental or HELD: JAL was doing business in the Philippines for purposes of income tax.
casual but is indicative of the foreign corporation’s intention For the source of the income to be considered as coming from the
to do business in the Philippines, such single act or Philippines, it is sufficient that the income is derived from activities within this
transaction constitutes “doing” or “engaging in” or country regardless of the absence of flight operations within Philippine
“transacting” business in the Philippines. territory. Sale of tickets is the lifeblood of the airline business.

Ish Guidote Page 95 of 107


Revocation of License to Transact Business proceeding in any court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before Philippine courts or
Section 134, Corporation Code. Revocation of license. - Without prejudice to administrative tribunals on any valid cause of action recognized under
other grounds provided by special laws, the license of a foreign corporation to Philippine laws. (69a)
transact business in the Philippines may be revoked or suspended by the
Securities and Exchange Commission upon any of the following grounds: • Contracts entered into may be valid as between the parties but may
not be enforced in Philippine courts.
xxx
Merrill Lynch Futures, Inc. v. Court of Appeals
2. Failure to appoint and maintain a resident agent in the Philippines as
required by this Title; The Lara spouses entered into futures contracts with Merrill Lynch Futures,
Inc. (MLFI). They transmitted their orders through Merrill Lynch Philippines,
3. Failure, after change of its resident agent or of his address, to submit to the Inc. (MLPI), MLFI’s company servicing account. As the spouses incurred
Securities and Exchange Commission a statement of such change as required losses in three transactions, they became indebted to MLFI. MLFI then filed
by this Title; suit before the RTC of Quezon City. The Laras filed a motion to dismiss which
the trial court granted.
xxx
HELD: The dismissal of the case was proper. MLFI is doing business in the
7. Transacting business in the Philippines outside of the purpose or purposes Philippines without a license. It dealt with futures contracts in exchanges in
for which such corporation is authorized under its license; the United States in behalf and for the account of the Lara Spouses, and on
several occasions the latter received account documents and money in
8. Transacting business in the Philippines as agent of or acting for and in connection with those transactions. However, the case must be remanded for
behalf of any foreign corporation or entity not duly licensed to do business in determination of whether the Lara spouses are estopped to deny MLFI’s
the Philippines; or corporate existence after having dealt with the corporation for 7 years.

9. Any other ground as would render it unfit to transact business in the Granger Associates v. Microwave Systems, Inc.
Philippines. (n)
Granger Associates, a US corporation, authorized Microwave Systems, Inc.
• No. 9 is a catch-all which gives the SEC wide latitude to determine (MSI) to manufacture and sell its products in the Philippines. As MSI
WoN it should suspend or revoke the license. defaulted on its obligations, Granger filed suit before the RTC of Pasay. The
• Procedure: court dismissed the complaint upon motion of MSI.
o There must be notice and hearing.
o SEC issues certificate of revocation. HELD: Granger was doing business in the Philippines without a license, hence,
! Copy given to government agency in charge. it is barred from filing suit under §133 of the Corporation Code. It is now
! Copy given to foreign corporation at its office in the settled that even one single transaction may be construed as doing business
Philippines. under certain circumstances. A single act may bring the corporation within
the purview of the statute where it is an act of the ordinary business of the
Effect of Failure to Secure License to Transact Business corporation. In such a case, the single act or transaction is not merely
incidental or casual, but is of such character as distinctly to indicate a
Section 133. Doing business without a license. - No foreign corporation purpose on the part of the foreign corporation to do other business in the
transacting business in the Philippines without a license, or its successors or state, and to make the state a base of operations for the conduct of a part of
assigns, shall be permitted to maintain or intervene in any action, suit or the corporations’ ordinary business.

Ish Guidote Page 96 of 107


B. SPECIAL CORPORATIONS 4. That the religious society or religious order, or diocese, synod, or district
organization desires to incorporate for the administration of its affairs,
1. RELIGIOUS SOCIETIES AND THE CORPORATION SOLE properties and estate;

Section 109. Classes of religious corporations. - Religious corporations may 5. The place where the principal office of the corporation is to be established
be incorporated by one or more persons. Such corporations may be classified and located, which place must be within the Philippines; and
into corporations sole and religious societies.
6. The names, nationalities, and residences of the trustees elected by the
Religious corporations shall be governed by this Chapter and by the general religious society or religious order, or the diocese, synod, or district
provisions on non-stock corporations insofar as they may be applicable. (n) organization to serve for the first year or such other period as may be
prescribed by the laws of the religious society or religious order, or of the
Section 110. Corporation sole. - For the purpose of administering and diocese, synod, or district organization, the board of trustees to be not less
managing, as trustee, the affairs, property and temporalities of any religious than five (5) nor more than fifteen (15). (160a)
denomination, sect or church, a corporation sole may be formed by the chief
archbishop, bishop, priest, minister, rabbi or other presiding elder of such • Register of Deeds of Rizal v. Ung Siu Si Temple: The Ung Siu Si
religious denomination, sect or church. (154a) Temple is a non-stock corporations whose members were Chinese
nationals.
Section 116. Religious societies. - Any religious society or religious order, or o HELD: RD properly denied registration of agricultural land in
any diocese, synod, or district organization of any religious denomination, view of the constitutional prohibition against aliens owning
sect or church, unless forbidden by the constitution, rules, regulations, or real property in the Philippines. At least 60% of the members
discipline of the religious denomination, sect or church of which it is a part, or (since there is no capital stock) should be Filipino citizens.
by competent authority, may, upon written consent and/or by an affirmative o To permit religious societies controlled by aliens to acquire
vote at a meeting called for the purpose of at least two-thirds (2/3) of its agricultural lands would be to drive the opening wedge to
membership, incorporate for the administration of its temporalities or for the revive religious holdings in this country.
management of its affairs, properties and estate by filing with the Securities • Roman Catholic Apostolic Administrator of Davao v. Land
and Exchange Commission, articles of incorporation verified by the affidavit Registration Commissioner: The petitioner is a corporation sole, but is
of the presiding elder, secretary, or clerk or other member of such religious a Canadian citizen.
society or religious order, or diocese, synod, or district organization of the o HELD: Registration allowed. In a corporation sole, the head of
religious denomination, sect or church, setting forth the following: the diocese is not the OWNER of the land but merely the
ADMINISTRATOR thereof. He administers the church’s
1. That the religious society or religious order, or diocese, synod, or district properties on behalf of the faithful who are Filipino citizens.
organization is a religious organization of a religious denomination, sect or
church; 2. TRANSNATIONAL CORPORATIONS
• Transnational corporations – clusters of several corporations, each
2. That at least two-thirds (2/3) of its membership have given their written with a separate entity, existing and spread out in several countries
consent or have voted to incorporate, at a duly convened meeting of the body; but controlled by the headquarters in a developed state where it was
originally organized.
3. That the incorporation of the religious society or religious order, or diocese, o Not organized under international law (treaty).
synod, or district organization desiring to incorporate is not forbidden by o All the locally incorporated branches are joined together by
competent authority or by the constitution, rules, regulations or discipline of common control and management of higher officials in the
the religious denomination, sect, or church of which it forms a part; home state.
• What is the personal law applicable to a transnational corporation?

Ish Guidote Page 97 of 107


o Originally, the law of the foreign state where it was originally • Conversely, if a state has jurisdiction over the parent, does it have
organized. jurisdiction over the subsidiary? YES, if—
o However, by associating with local entrepreneurs and o The subsidiary’s separate corporate existence has not been
incorporating under the laws of the host state, it becomes a adequately maintained; or
domestic corporation of such state. o The parent has acted within the state as the subsidiary’s
o Still, major decisions regarding operation and management of agent.
the corporation come from the parent corporation in the
industrialized state. C. PARTNERSHIPS
• It is not unusual for transnationals to drive unfair bargains with local
employees, customers, and suppliers. Article 1767, Civil Code. By the contract of partnership two or more persons
o Only the local corporation will be held liable but not the parent bind themselves to contribute money, property, or industry to a common fund,
corporation. with the intention of dividing the profits among themselves.

Derivative Jurisdiction Over Foreign Corporations Two or more persons may also form a partnership for the exercise of a
• If a state has jurisdiction over a subsidiary, does it have jurisdiction profession. (1665a)
over the parent?
o Is ownership by the parent over the subsidiary’s stock • Choice-of-law questions often arise from the determination of the
enough to confer jurisdiction? rights, duties and liabilities of
o Will a subsidiary’s activities in a state give that state o The partners inter se as agents and fiduciaries; and
jurisdiction over the parent? o The partnership and partners in dealing with third persons.
• Restatement: Jurisdiction over the parent will exist if the parent • The extent of liability of parties to a partnership are wholly dependent
controls and dominates the subsidiary. on the governing law.
• Considerations in determining whether the subsidiary is maintaining • NCC51 states:
a separate corporate existence:
o Does it have its own— When the law creating or recognizing them, or any other provision
! Records does not fix the domicile of juridical persons, the same shall be
! Assets understood to be the place where their legal representation is
! Employees established or where they exercise their principal functions. (41a)
! Advertising
! Payroll • If a partnership is formed in one state but conducts its business in
! Accounting another, it may be considered to be domiciled in the latter state.
o Are its directors the same as the parent corporation? • As to capacity to contract, the governing law is still the law of the
o Does it share an office with the parent corporation? state where the partnership was formed.
• US courts: Jurisdiction over the parent corporation may be acquired o According to Art. 15 of the Code of Commerce, PH law still
when the subsidiary does not maintain a separate corporate applies in:
existence. ! The creation of the partnership’s establishments
o The activities of the subsidiary in a state will provide basis for within PH territory;
jurisdiction over the parent if these activities: ! Their mercantile operations; and
! Provide a basis for jurisdiction over the subsidiary; ! The jurisdictions of the courts of the nation.
and • As to the existence of a partnership, it is also the personal law of the
! Can be said to have been done in the course for the partnership which applies.
parent corporation or on its behalf. o Conditions and formalities (extrinsic validity)

Ish Guidote Page 98 of 107


• As to grounds for dissolution, it is still the partnership’s personal law PART FIVE: FOREIGN JUDGMENTS
which is applicable.
• In a limited partnership, the Civil Code provides that the limite Chapter XVIII
partners are not bound by the obligation of the partnership. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS
• King v. Sarria: A partnership was forged in Cuba whose laws provide
that only general partners are liable for partnership obligations. The
A. DISTINCTION BETWEEN RECOGNITION AND ENFORCEMENT
partnership entered into a contract in NY. It was sued before a NY
• Foreign judgment – all decisions rendered outside the forum.
court, and among the parties impleaded was Sarria, a limited partner
o Includes judgments, decrees and orders of:
domiciled in Cuba.
! Foreign courts
o HELD: Sarria cannot be held liable, following the law of the
! Sister states in a federal system
creation of the partnership and not the lex loci contractus.
• If the successful plaintiff fails to obtain satisfaction of a judgment in
the court which granted it, he may try to enforce it in another state
Extraterritorial Enforcement of In Personam Judgments Against Partnerships
where the defendant can be located.
• Is service of summons on a partner sufficient to acquire jurisdiction
• If the defendant wins and asserts that decision to preclude plaintiff
over the partnership?
from suing on the same cause of action in another court, he is asking
o Restatement:
for recognition of the original judgment.
! A state in which a partnership or other
unincorporated associations is subject to suit in the
firm or common name has power to exercise judicial RECOGNITION ENFORCEMENT
jurisdiction over the partnership or association if Does not necessarily require filing of
Requires filing of an action in F2
under the circumstances it would exercise judicial an action in F2
jurisdiction over and individual. Ex. F1 renders judgment on a
! A valid judgment rendered against a partnership or collection suit. A suit must be filed in
Ex. Divorce decree issued in Italy to
association is a binding adjudication as to the liability F2 on the F1 judgment and a new
an Italian gives him capacity to
of the partnership or association with respect to its judgment handed down by F2 before
remarry in the Philippines.
assets in every state. the debtor’s property may be
• Rule 14, ROC provides: attached.

Section 11. Service upon domestic private juridical entity. — When the B. BASES OF RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS
defendant is a corporation, partnership or association organized • Comity (Hilton v. Guyot)
under the laws of the Philippines with a juridical personality, service o Cheshire: It would appear that, in order to obtain reciprocal
may be made on the president, managing partner, general manager, treatment from the courts of other countries, we are
corporate secretary, treasurer, or in-house counsel. (13a) compelled to take foreign judgments as they stand and to
give them full faith and credit.
o Effect: reciprocity among concerned jurisdictions
• “The obligation of foreign judgments”
o Derived from the Vested Rights Theory.
o Considers a judgment of a foreign court as imposing a duty or
obligation on the losing litigant.
! Ex. Judgment on debt owing to plaintiff is handed
down by F1. F2 considers this judgment as evidence

Ish Guidote Page 99 of 107


of the debt. Thus, an action may be brought in F2 to • Thus, Rule 39 provides:
enforce it.
Section 40. Effect of foreign judgments or final orders. — The effect of
Godard v. Gray a judgment or final order of a tribunal of a foreign country, having
jurisdiction to render the judgment or final order, is as follows:
The plaintiffs (Frenchmen) sued defendants (Englishmen) before a French
court upon a charter party entered into in England. The contract contained a (a) In case of a judgment or final order upon a specific thing, the
clause which limited the penalty for non-performance to the estimated judgment or final order is conclusive upon the title of the thing; and
amount of freight. The French court ruled for plaintiffs. They sought to
enforce the French judgment before an English court. Under English law, a (b) In case of a judgment or final order against a person, the judgment
penal clause such as the one above is idle and inoperative. or final order is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title.
HELD: The English interpretation of the charter party does not bar the action
for enforcement of the French court’s judgment. France does no enforce the In either case, the judgment or final order may be repelled by evidence
judgments of other countries in the absence of reciprocity, However, in of a want of jurisdiction, want of notice to the party, collusion, fraud,
England, such judgments are enforced not by virtue of any treaty or statute, or clear mistake of law or fact. (50a)
but upon the following principle: Where a court of competent jurisdiction has
adjudicated a certain sum to be due from one person to another, a legal • Apart from res judicata, consider also the concepts of “merger” and
obligation arises to pay that sum, on which an action of debt to enforce the “bar.”
judgment may be maintained. It is in this way that the judgments of foreign o Merger – considers the cause of action as merged in the
and colonial courts are supported and enforced. The following are acceptable judgment.
defenses to an action for enforcement: (1) the forum court acted without or in ! Thus, cannot relitigate claim.
excess of jurisdiction, (2) the judgment was obtained by fraud, or (3) the o Bar – when a successful defendant interposes the judgment
foreign court knowingly and perversely disregarded the rights given to an in his favor to avert a second action by the plaintiff on the
English subject by English law. In the present case, it appears that the French same claim.
courts, judicially, honestly, and with the intention to arrive at the right o Direct estoppel – the relitigation of all matters decided are
conclusion, and having heard the facts as stated before them they came to a precluded.
conclusion which justified them in France in deciding as they did decide. o Collateral estoppel – all essential issues of fact actually
litigated in the suit decided on by the foreign court are
C. POLICIES UNDERLYING RECOGNITION AND ENFORCEMENT rendered conclusive.
• Ground: res judicata ! Concerned with issue preclusion by barring
o Those who have contested an issue shall be bound by the relitigation on an issue already litigated on in a prior
result of the contest. proceeding.
o Matters once tried and decided with finality in one jurisdiction ! Compare with res judicata which seeks to end
shall be considered settled as between the parties. litigation by disallowing a suit on the same claim.
o Anglo-American jurisprudence: Foreign judgments are not
open to reexamination on the merits when placed in issue D. REQUISITES FOR RECOGNITION OR ENFORCEMENT
before local courts.
! Rule is subject to a few exceptions. 1. The foreign judgment was rendered by a judicial or a quasi-judicial tribunal
• Policies involved: which had jurisdiction over the parties and the case in the proper judicial
o To give finality to litigation proceedings.
o To protect the legitimate expectations of the parties • For in personam proceedings:

Ish Guidote Page 100 of 107


o Consent of the parties; or summons was served upon an agent of a corporation, the latter being an
o Relation of the parties or events to the forum (International entity entirely different from the appellee. Thus, the Hanoi judgment is not
Shoe: satisfy minimum standards of fair play and substantial conclusive upon Philippine courts. It merely constitutes prima facie evidence
justice) of the justness of appellants’ claim, and admits of proof to the contrary.
• For in rem proceedings: power of the state over property found within
the territory. Ramirez v. Gmur
• Where there is an egregious disregard for due process, the foreign
judgment will be denied recognition and enforcement. This case concerns the validity of a French divorce obtained by a Filipina
(Castro) and an Englishman (Kauffman). Castro subsequently remarried and
Northwest Orient Airlines, Inc. v. Court of Appeals had children, thus the validity of the divorce is relevant in determining the
and C.F. Sharp & Company, Inc. successional rights of her children from the second marriage.

Northwest and Sharp entered into an agreement whereby the latter was HELD: The French divorce cannot be given effect in the Philippines. The
authorized to sell the former’s tickets in Japan. Sharp failed to remit the French tribunal has no jurisdiction to entertain an action for the dissolution of
proceeds of the ticket sales. Northwest filed a complaint for damages before a marriage contracted in [the Philippine Islands] by persons domiciled here,
the District Court of Tokyo. As the court failed to serve summons upon Sharp such marriage being indissoluble under the laws then prevailing in this
in its Yokohama office, it authorized extraterritorial service in Manila. The country. The court of a country in which neither of the spouses is domiciled
Manila office accepted the writs but still, Sharp failed to appear at the and to which one or both of them may resort merely for the purpose of
hearings. The District Court ruled in favor of Northwest. It sought to have the obtaining a divorce has no jurisdiction to determine their matrimonial status.
judgment in the Philippines. The trial court ruled in favor of Sharp as it the As such, a divorce granted by such a court is not entitled to recognition
Tokyo court had no jurisdiction over its person. elsewhere.

HELD: The extraterritorial service of summons was valid. The party attacking • For as long as the foreign court acquired jurisdiction, its decisions will
the foreign judgment has the burden of overcoming the presumption of its not be disturbed whether it was reached through an adversary
validity. Since the issue of service of summons is a procedural one, it is proceeding or by default.
governed by the lex fori. Sharp failed to plead Japanese law to show that • Somportex v. Philadelphia Chewing Gum Corporation:
extraterritorial service is invalid. Thus, the doctrine of processual o Default judgment rendered by English court should still be
presumption applies. Our Rules allow extraterritorial service of summons. extended hospitality by American courts.
o In the absence of fraud or collusion, a default judgment is
Boudard v. Tait conclusive as adjudication between the parties as when
rendered after answer and complete contest in open court.
Marie Theodore Jerome Boudard was an employee of Steward Edward Tait. o Test: whether a reasonable method of notification is
He was killed in Hanoi by his co-employees. Boudard’s widow, Emilie, filed employed and reasonable opportunity to be heard is afforded
suit against Tait before a Hanoi court. Summons was served in Manila upon to the person affected.
J.M. Shotwell, an agent of Churchill & Tait, Inc. Tait failed to appear at trial;
default judgment was rendered against him. Emilie sought to have the Hanoi Borthwick v. Castro
judgment enforced in Manila. The CFI dismissed the petition.
Borthwick, an American residing in the Philippines, executed promissory
HELD: The Hanoi court had no jurisdiction over Tait. French law provides that notes in favor of Scallon. The notes provided for a choice-of-forum clause in
service upon non-residents shall be made (1) in their present place of favor of the courts of Los Angeles, Honolulu and Manila. Borthwick defaulted;
residence, and (2) if unknown, the writ shall be posted at the main door of the Scallon sued before a Hawaii court. Summons was served in California.
hall of the court where the complaint has been filed. In the case at bar, the Borthwick ignored the summons and so was declared in default. Judgment

Ish Guidote Page 101 of 107


was rendered against him. Scallon, after failing to execute judgment both in o Pemberto asserted that the decree was invalid.
California and in Hawaii, filed a petition for enforcement before a Philippine o The English court held that since no substantial injustice was
court. Again, Borthwick was declared in default. Judgment was rendered in caused to petitioner, all the court could look to is the finality
favor of Scallon. of the judgment and the jurisdiction of the court.
! Competence to entertain the sort of case which it did
HELD: The Hawaii judgment may be enforced in the Philippines. The Hawaii deal with; and
court’s jurisdiction hinged entirely on the existence of two facts: (1) business ! Competence to require the defendant to appear
dealings in Hawaii, or (2) ownership of real property therein. Both facts were before it.
pleaded in the complaint, thus it was incumbent upon Borthwick to prove o The error in procedure was not significant enough to alter an
otherwise. Instead, he ignored the processes served upon him. There is thus otherwise valid decree.
no evidence before the court to prove that the Hawaii court acted without
jurisdiction. 3. The judgment must be final and executory to constitute res judicata in
another action.
St. Aviation Services Co., Pte. Ltd. v. Grand International Airways, Inc. • Interlocutory/provisional order – one which contemplates that a fuller
investigation leading to a final decision may later be held.
GrandAir contracted with St. Aviation for the maintenance of two of its o Creates no obligation on the forum court to recognize or
airplanes. As it failed to pay in accordance with their agreement, St. Aviation enforce it.
sued before a Singapore court in accordance with the forum selection clause
in the agreement. The Singapore court ordered the summons to be served Nouvion v. Freeman
extraterritorially. With the assistance of the Sheriff of Pasay, summons was
served upon GrandAir in its head office. Still, it failed to appear before the Henderson purchased properties from Nouvion in Spain. Under the terms of
court and default judgment was rendered against it. St. Aviation filed a the deed of sale, Henderson was required to make certain payments. After
petition for enforcement before the RTC of Pasay. GrandAir’s motion to Henderson’s death, Nouvion sought to be appointed administrator of his
dismiss was denied. However, the CA reversed and held that since the action estate. It was necessary for him to show that he was a creditor of the
before the Singapore court was in personam, service of summons should deceased. Nouvion alleged that he obtained a judgment of a foreign court
have been personal or substituted, not extraterritorial. upon which he was entitled to sue in that country, and which in that country
established the existence of a debt.
HELD: The Singapore court acquired jurisdiction over the person of GrandAir.
Matters of remedy and procedure such as those relating to the service of HELD: The foreign judgment cannot be enforced as it is not a final order. The
process upon a defendant are governed by the lex fori or the internal law of rule on recognition only applies to a judgment which results from an
the forum—Singapore law. The Rules of Court of Singapore authorize service adjudication of a court of competent jurisdiction, such judgment being final
of summons “by a method of service authorized by the law of that country for and conclusive. In order to establish that a final and conclusive judgment has
service of any originating process issued by that country.” The manner of been pronounced, it must be shown that in the court by which it was
service undertaken by the Sheriff of Pasay City complied with the pronounced it conclusively and finally and forever settles the existence of the
requirements of Rule 14 of the Philippine Rules of Court. debt of which it is sought to be made conclusive evidence in this country, so
as to become res judicata between the parties. In the present case, the
2. The judgment must be valid under the laws of the court that rendered it. foreign tribunal may still make an adjudication that there is no obligation and
• Pemberto v. Hughes: no debt. Thus, there can be no enforcement.
o Summons was served on Mrs. Pemberto in Florida, but she
was only given 9 days to answer instead of the statutory 10.
o Judgment was rendered against her and an action for
enforcement filed before an English court.

Ish Guidote Page 102 of 107


Querubin v. Querubin o Administration can be difficult because finding the exact law
which grants reciprocity is, in itself, still nebulous.
Silvestre and Margaret Querubin were married in New Mexico. They had one ! Is general recognition sufficient or must there be
daughter, Querubina. Margaret filed for divorce before a Los Angeles court. specific recognition of a case identical or analogous
The court granted the petition and awarded joint custody to the spouses. to the one before the court?
However, it later modified the decree granting custody to Silvestre as
Margaret was living with another man. As Margaret eventually married the Cowans, et al. v. Teconderoga Pulp & Paper Co.
other man, the court issued an interlocutory decree granting the custody of
Querubina to her. Silvestre took Querubina to Ilocos Sur. Margaret filed a Plaintiffs obtained a favorable money judgment from a Quebec court. They
petition for habeas corpus invoking the interlocutory decree. The trial court sought to have the same enforced in New York. Respondents claim that the
dismissed the petition. Quebec judgment is not conclusive but is merely prima facie proof of liability.
Under Quebec law, “any defense which was or might have been set up in the
HELD: The interlocutory decree cannot be enforced. It is not final, and it original action may be pleaded to an action brought upon a judgment
changes depending on the circumstances. A divorce decree is generally rendered out of Canada.” Respondents theorize that New York courts should
respected by the courts of other countries, but such a decree has no not recognize the Quebec judgments as adjudications of the issues because
controlling effects in another states as to facts and conditions occurring the Quebec courts to not reciprocate as to New York judgments.
subsequently to the date of the decree. The court of another state may, in the
proper proceedings, award custody otherwise upon proof of matters HELD: The Quebec judgment should be enforced in New York. GENERAL
subsequent to the decree which justify the decree to the interest of the child. RULE: A judgment recovered in a foreign country, when sued upon in the
Since the decree in this case is not yet final, it cannot be enforced. courts of this state, is conclusive, so far as to preclude a retrial of the merits
of the case, subject, however, to certain well-maintained exceptions.
4. The state where the foreign judgment was obtained allows recognition or EXCEPTIONS:
enforcement of Philippine judgments. 1. Where the judgment is tainted with fraud;
• Reiteration of international comity as basis for recognition and 2. Where the judgment is against public policy of the state;
enforcement of a foreign judgment. 3. Where the foreign court had not jurisdiction.
• Hilton v. Guyot: French judgment was not declared conclusive The reciprocity exception under Hilton v. Guyot is no longer controlling. The
because “international law is founded upon mutuality and rule [on recognition] rests not on the basis of reciprocity but upon the
reciprocity.” persuasiveness of the foreign judgment.
o French law allowed review of American decisions.
o Comity was used as a means of retaliation. 5. The judgment must be for a fixed sum of money.
o French legal system coerced to change its laws. • Unless the foreign judgment specifies performance or delivery, there
o Criticism: litigants are punished because of their is nothing for the forum court to enforce.
governments’ policies over which they have no control. • Sadler v. Roberis: Until taxation, the plaintiff cannot enforce his claim.
! Also, is the task of formulating policies through o Jamaican court held that costs (which are to be taxed) should
reciprocity a power to be appropriately exercised by first be deducted from the award.
the judiciary? o Hence, the amount of the decree was not fixed.
• Trautman & Von Mehren: Difficulties with the reciprocity • What if the plaintiff showed the applicable tax rate? Would the
requirement— amount now be fixed?
o Tends to lower rather than raise the standards of practice.
Hence, no constructive effect. 6. The foreign judgment must not be contrary to the public policy or the good
o Private litigants burdened may not be closely attached to the morals of the country where it is to be enforced.
legal order sought to be changed.

Ish Guidote Page 103 of 107


• The forum is not under any duty to apply foreign law (or recognize E. GROUNDS FOR NON-RECOGNITION
foreign judgments) when such is repugnant to its internal policies or
prejudicial to its interests. Section 4, Uniform Foreign Money-Judgments Recognition Act. Grounds for
o The then prevailing choice-of-law method was the vested Non-Recognition.
rights theory.
(a) A foreign judgment is not conclusive if—
Querubin v. Querubin, supra
(1) The judgment was rendered under a system which does not
HELD: The trial court did not commit grave abuse of discretion in dismissing provide impartial tribunals or procedures compatible with the
the petition for habeas corpus. Under the Divorce Law 2710, the offending requirements of due process of law;
spouse may not be awarded custody of the minor children. It is against the
law, public policy and good customs to award custody to the mother who has (2) The foreign court did not have personal jurisdiction over the
violated her marital vows. If the court concedes to the petition, Querubina defendant; or
would be placed under the control of the man who dishonored her mother and
offended her father. (3) The foreign court did not have jurisdiction over the subject matter.

7. The judgment must not have been obtained by fraud, collusion mistake of (b) A foreign judgment need not be recognized if—
fact or mistake of law.
• WoN there is fraud is to be decided by the court on the basis of its (1) The defendant in the proceedings in the foreign court did not
internal law. receive notice of the proceedings in sufficient time to enable him to
o Can be the basis of a conflicts problem if principles not in line defend;
with those of the foreign state.
• §48, Rule 39 provides: (2) The judgment was obtained by fraud;

x x x In either case, the judgment or final order may be repelled by (3) The [cause of action] [claim for relief] on which the judgment is
evidence of a want of jurisdiction, want of notice to the party, based is repugnant to the public policy of this state;
collusion, fraud, or clear mistake of law or fact. (50a)
(4) The judgment conflicts with another final and conclusive
• The kind of fraud referred to is extrinsic fraud. judgment;
o A finding of intrinsic fraud would result in a trial de novo,
hence, it is not a defense in an action to enforce a foreign (5) The proceeding in the foreign court was contrary to an agreement
judgment. between the parties under which the dispute in question was to be
settled otherwise than by proceedings in that court; or
• Extrinsic fraud – signifies that the party had been deprived of his day
in court.
(6) In the case of jurisdiction based only on personal service, the
o Must be an extrinsic, collateral act which vitiates the most
foreign court was a seriously inconvenient forum for the trial of the
solemn proceedings of the courts of justice.
action.
o Examples:
! Collusion by the parties
! Suppression of an important document • The first three grounds are mandatory while the last three are
! Presentation of a forged will or a false affidavit discretionary.
• Most debatable: lack of jurisdiction in personam.

Ish Guidote Page 104 of 107


o Why? In most courts, forum-defendant contacts are F. MODERN DEVELOPMENTS IN THE ENFORCEMENT OF FOREIGN
appropriate bases for the exercise of jurisdiction. JUDGMENTS
o Traditional basis (presence) has long been eroded. • There has been a growing effort to take the rout of treaties and
o In fact, the last ground (forum non conveniens) further multilateral conventions to regulate recognition and enforcement
restricts the use of presence as the cornerstone for exercise practices.
of jurisdiction.
• Grounds recognized under various Hague Conventions: 1. The Hague Conference on Private International Law
o Child not given opportunity to be heard, public policy • Convention on the Recognition and Enforcement of Foreign
exception (Hague Convention on Jurisdiction, Applicable Law, Judgments in Civil and Commercial Matters:
Recognition, Enforcement and Cooperation in Respect of o Established the conditions and prerequisites under which the
Parental Responsibility and Measures for the Protection of contracting states would recognize and enforce each other’s
Children); judgments.
o Violation of the ordre public of the recognizing state; o Significant provisions:
o Failure to comply with the due process requirements. ! Applicability of the convention irrespective of the
nationality of the parties;
Sps. Belen v. Hon. Chavez ! Non-refusal for the sole reason that the court of the
state of origin has applied a law other than that which
The Sps. Pacleb filed a petition for enforcement of judgment against the Sps. would have been applicable according tot eh rules of
Belen before the RTC of Batangas. However, as the Belens were already private international law of the state addressed.
residing in California, summons was served on their last known address in o Convention also addresses the issues of:
Alaminos, Laguna. A certain Atty. Alcantara entered his appearance for ! WoN a default judgment is subject to enforcement;
petitioners, claiming that he was retained by their relatives. He filed numerous and
pleadings on behalf of the spouses. Judgment was rendered against the Sps. ! Procedures for enforcement and recognition.
Belen. A copy of the judgment was sent to Atty. Alcantara, but was returned • Supplementary Protocol:
with the notation “addressee deceased.” The copy was instead sent to the o Applicable to all foreign judgments, irrespective of place of
Alaminos, Laguna address. Subsequently, Atty. Culvera entered his origin, affecting all matters to which the convention extends,
appearance for the Sps. Belen and sought to appeal the judgment. directed against a domiciliary of a contracting state.
o Domiciliary may obtain recognition/enforcement by a
HELD: The RTC acquired jurisdiction over the persons of the Sps. Belen contracting state where the foreign judgment was based on
through the appearance of Atty. Alcantara. The action in this case is one in an improper forum.
personam, thus, summons should be served personally or through • Convention on the Recognition and Enforcement of Decisions
substituted service. Summons sent to the Alaminos address complies with Relating to Maintenance Obligations:
neither of the allowable modes. However, Atty. Alcantara filed various o Relates to family, relationship, parentage, marriage or affinity.
pleadings before the court. Attached to the pleadings were certain documents th
• In 1993, the 17 Session of the Hague Convention looked into the
which could only have been supplied by the Sps. Belen. In sum, petitioners possibility of a general convention on recognition and enforcement.
voluntarily submitted themselves through Atty. Alcantara to the jurisdiction of o Benefit: uniform procedure.
the RTC. However, with respect to service of a copy of the judgment, the same o Ease in determining the effects that a contracting state would
only became effective when Atty. Culvera received a copy. give to a foreign judgment.
o Could address the practice of using unreasonable
jurisdictional bases against persons not domiciled in a
contracting state.

Ish Guidote Page 105 of 107


2. The EEC Convention of 1968
• Convention Relating to the Jurisdiction of Courts and Enforcement of • Why the requirement of a new action? It seeks to reconcile two
Decisions in Civil and Commercial Matters principles—
o Extends to the Common Market area the reach of o First, the territorial jurisdiction of courts, which demands that
jurisdictionally improper for a presently available against the enforcement of a foreign judgment should be based upon
non-residents under the procedural systems of four member something other than the authority of the rendering court
states. which ceased at its jurisdictional limits; and
o Permits member states to include in bilateral treaties clauses o Second, res judicata.
that protect domiciliaries against recognition of foreign
judgments that are improperly based. Ingenohl v. Olsen & Co.

3. Uniform Foreign Money-Judgments Recognition Act Ingenohl sued Olsen & Co. before a Hong Kong court for trademark
• Applicable to any foreign country judgment that is final and infringement. The Hong Kong court ruled for plaintiff. He sought to enforce
conclusive and enforceable. the same in Manila, and the CFI ruled in his favor. However, the Philippine
o Even if appeal is available/pending. Supreme Court reversed on the ground of clear mistake. The Hong Kong court
• Excludes judgments from: allegedly failed to give effect to the seizure of the Alien Property Custodian of
o Taxes the trademarks and their subsequent sale/assignment to Olsen & Co.
o Penalties
o Child/spousal support HELD: The sale/assignment of the trademarks to Olsen & Co. does not give
the latter the exclusive right to use the same in Hong Kong. : A trademark
G. PROCEDURE FOR ENFORCEMENT started elsewhere would depend for its protection in Hong Kong upon the law
prevailing in Hong Kong and would confer no rights except by the consent of
1. New action/petition that law. The Hong Kong judge authoritatively declared that the assignment
• Common law: When a foreign judgment is recognized, it is not of the Custodian to Olsen & Co. will not be allowed to affect the rights of the
instantaneously executed as a judgment. party concerned in Hong Kong.
• Adopted by the Philippines.
• A petition must be filed in the proper court attaching an authenticated 2. Summary proceeding for enforcement of judgments (other civil law
copy of the foreign judgment to be enforced. countries)
• Recall Rule 132: • Exequatur – validation proceeding
• French law: authenticated copy of judgment + validation certificate
Section 24. Proof of official record. — The record of public documents (formule executoire) issued by the Clerk of Court.
referred to in paragraph (a) of Section 19, when admissible for any • Once validated, the foreign judgment is given the same effect as a
purpose, may be evidenced by an official publication thereof or by a local judgment.
copy attested by the officer having the legal custody of the record, or • Compared to this method, the common law method is protracted and
by his deputy, and accompanied, if the record is not kept in the expensive.
Philippines, with a certificate that such officer has the custody. If the
office in which the record is kept is in foreign country, the certificate 3. Judgment registration
may be made by a secretary of the embassy or legation, consul • May or may not involve judicial supervision.
general, consul, vice consul, or consular agent or by any officer in the • Authenticated copy of judgment filed in the registrar’s office + other
foreign service of the Philippines stationed in the foreign country in proof required by domestic laws.
which the record is kept, and authenticated by the seal of his office. o Judgment converted into a local one that is immediately
(25a) executory.

Ish Guidote Page 106 of 107


• England requires judicial approval to avoid mistake or negligence.

• In the US, distinctions between a foreign country and a sister-state


judgment are indispensable in the manner of enforcement.
o Under the Constitution, states must give extraterritorial
recognition to all the acts, records and judgments of the
several states (“full faith and credit” clause).
o Judgments of the sister-states may be brought to the US SC
for review.
o Judgments rendered by sister-states are based on legal
procedures similar to those of the court whose recognition is
sought.
! Foreign court may have disregarded rules which the
recognizing court regards as important.
• But in practice, courts are inclined to give recognition to foreign
judgments because of overriding public interest and the dictates of
public policy that there be an end to litigation.

Ish Guidote Page 107 of 107