IV. Choice of Law in Family Relations
All states recognized as valid those marriages celebrated
A. Marriage
Art 1 FC. Marriage is a special contract of permanent union
between a man and a woman entered into in accordance with
law for the establishment of conjugal and family life. It is the
foundation of the family and an inviolable social institution
whose nature, consequences, and incidents are governed by
law and not subject to stipulation, except that marriage
settlements may fix the property relations during the
marriage within the limits provided by this Code.
It is a special contract distinguished from an ordinary
contract in that:
1) It is entered into by a man and a woman;
2) At least 18 yrs old
3) Solemnized by a person specifically authorized by
law;
4) It is a permanent union unless one of the party dies,
or the marriage is annulled or declared void in
special circumstances;
5) It cannot be abrogated, amended or terminated by
one or both parties at will;
6) In marriage the nature and consequences as well as
the incidents are governed by law and not subject to
stipulation by the parties unlike in ordinary
contracts;
7) Violations of marital obligations may give rise to
penal or civil sanctions while breach of the
conditions of an ordinary contract can be a ground
for an action for damages
Marriage as a contract has two kinds of requisites:
1. Essential requisites
(1) Legal capacity of the contracting parties
who must be male and female
(2) Consent freely given in the presence of a
solemnizing officer
2. Formal requisites
(1) Authority of the solemnizing officer
(2) A valid marriage license
(3) A marriage ceremony takes place with the
appearance of the contracting parties
before the solemnizing officer and their
personal declaration that they take each
other as husband and wife in the presence
of not less than two witnesses of legal age
Note: The above formal requisites apply to foreigners who
get married in the Philippines. If one or both of the parties
are foreigners, the foreigner must submit a certificate of legal
capacity to contract marriage issued by the diplomatic or
consular officials of his/her country in the Philippines before
he/she can be issued a marriage license. Stateless persons or
refugees need only to submit an affidavit stating the
circumstances showing such capacity to contract marriage
1. Philippine Policy on Marriage and The Family
-the Philippines establishes a presumption of validity of
marriage
- Art. 220. In case of doubt, all presumptions favor the
solidarity of the family. Thus, every intendment of law or
facts leans toward the validity of marriage, the
indissolubility of the marriage bonds, the legitimacy of
children, the community of property during marriage, the
authority of parents over their children, and the validity of
defense for any member of the family in case of unlawful
aggression.
2. Extrinsic Validity of Marriage
- the determination of the extrinsic validity is referred to the
lex loci celebrationis or law of the place of celebration
-this covers questions relating to the formalities or external
conduct required of the parties or of third persons especially
of public officers, necessary to the formation of a legally valid
marriage.
GENERAL RULE: lex loci celebrationis
1.
in foreign country if they comply with the formalities
prescribed therein (Hague Convention)
2. The forms and solemnities of contracts, wills and other
public instruments shall be governed by the laws of the
country in which they were executed (Article 17, Civil
Code)
3. All marriages solemnized outside the Philippines in
accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also
be valid in this country (Art. 26, Family Code)
EXCEPTIONS:
The following are void marriages between Filipinos even if
valid in the foreign country
1. When either or both parties are below 18 years of age
even with parental consent
2. Bigamous and polygamous marriages
3. Mistake as to identity of contracting party
4. A subsequent marriage performed without recording in
the Civil Registry the judgment or annulment or
declaration of nullity and partition and distribution of
properties and the delivery of children’s presumptive
legitimes
5. Marriages where either spouse is psychologically
incapacitated
6. Incestuous marriages
7. Void by reason of public policy
NOTE: These exceptions put into issue the capacity of the
parties to enter the marriage and therefore relation to
the substantive requirements for marriage. Since the
personal law of the parties, e.g., the national law of
the Filipinos, governs the questions of intrinsic validity
of marriages between the Filipinos abroad, the above
enumerations are exceptions to lex loci celebrationis
precisely because they are controlled by lex nationalii
NOTE: Consular marriages of Filipinos abroad are valid (Art.
10, Family Code)
Conflicts rules on marriages between foreigners solemnized
abroad
1. We still apply the rule of lex loci celebrationis, but
not the exceptions in the first par. of Art. 26 of the
Family Code which apply only to Filipinos
But universally considered incestuous
marriages and marriages that are highly
immoral are excepted
2. Proxy marriages – Not allowed under Philippine
internal law
Rule in the US – if permitted by the law of
the place where the proxy participates in
the marriage ceremony, proxy marriages
are entitled to recognition insofar as the
formal validity of the marriage is concerned
3. Marriages on board a vessel on the high seas –
Since the country whose flag the ship is flying has
jurisdiction over the ship, the rule is that compliance
with the law of the said country is required for the
marriage to be valid
4. If the parties or at least the husband is a Muslim – it
is believed that we would recognize up to four
marriages of the same husband (Philippine Muslim
Code on Personal Laws)
3. Intrinsic Validity of Marriage
- refers to the capacity or the general ability of a person to
marry
 controlled by the parties personal laws (either
domiciliary or nationality)
- Substantive requirements:
1. legal capacity of the parties- 18 yrs old
2. no legal impediment to marry each other
3. consent freely given in the presence of an
authorized solemnizing officer
- though valid in a foreign country certain marriages may be
void in the Philippines by reason of public policy, as
enumerated in Art. 38 of the NCC as follows:
1. Between collateral blood relatives, legitimate or
illegitimate;
2. Between step-parents and stepchildren;
3. Between parents-in-law and children-in-law;
4. Between the adopting parent and the adopted child;
- LEGAL SEPARATION refers to the separation from bed and
board which does not affect the dissolution of the marriage
relationship by relieving the spouse of the duty of living with
each other.
- The grounds for divorce are dictated by the LEX FORI.
Hence, the state may refuse to recognize the foreign ground
for divorce unless it corresponds with a ground justified by
the forum law.

5. Between the surviving spouse of the adopted child and the Legal separation Divorce
adopter; Relative divorce, only a Absolute divorce, dissolves
6. Between the surviving spouse of the adopted child and the separation from bed and the marriage and the parties
adopter. board but the parties remain can marry again
7. Between an adopted child and the legitimate child of the married
adopter;
8. Between the adopted children of the same adopter; Legal separation Annulment
Marriage is not defective Marriage is defective
9. Between parties where one with the intention to marry the Grounds arise after the Grounds must exist at the
other, killed the other person’s spouse or his or her marriage time of or before the
own spouse; celebration of the marriage
10. Between first cousins only with Filipino nationals. Parties are still married to Marriage is set aside
each other
- the Hague Convention on Validity of Marriages allows a
Grounds are those given by Grounds are those given by
contracting state to refuse recognition of the marriage if: the national law or the the lex loci celebrationis
1. one of the spouses was already married (unless the domiciliary law – question is subject to certain exceptions
marriage has subsequently become valid by reason of the one of status – questions the very
dissolution or annulment of the prior marriage); existence of status
2. the spouses were related to one another, by blood or by
adoption, in the direct line or as brother and sister;
a) Divorce decrees obtained by Filipinos
3. one of the spouses had not attained the minimum age
-Absolute divorce obtained by the Filipinos abroad have no
required for marriage, nor had obtained the necessary
effect and is not recognized in the Philippines.
dispensation;
-A marriage between Filipino citizen and a foreigner is
4. one of the spouses did not have the mental capacity to
susceptible to divorce if the divorce is validly obtained abroad
consent; or
by the alien spouse capacitating him to remarry. THE
5. one of the spouses did not freely consent to the marriage.
FILIPINO SPOUSE SHALL LIKEWISE HAVE THE CAPACITY TO
REMARRY UNDER THE PHILIPPINE LAW.
4. Effects of marriage to:
a) Personal Relations between the Spouses
b) Validity of Foreign Divorce Between Foreigners
-it is governed by the NATIONAL LAW OF THE PARTIES.
1. Hague Convention states that a foreign divorce will be
-if the spouses are of different nationalities, generally the
recognized in the contracting states if, at the date of the
national law of the husband may prevail as long as said law is
filing of the proceedings:
not contrary to laws, customs and good morals of the forum.
(1) The petitioner or respondent had his or her
-this includes mutual fidelity, respect, cohabitation, support,
habitual residence in the state where the divorce
and the right of the wife to use the husband’s family name.
was obtained
-Art 69. of the Family Code reads: “The husband and the wife
(2) If both spouses were nationals of said state
shall fix the family domicile. In case of disagreement, the
(3) Although the petitioner was a national of another
court shall decide. The court may exempt one spouse from
country, he or she had his or her residence in the
living with the other if the latter should live abroad or there
place where the divorce was obtained
are other valid and compelling reasons for the exemption.
2. In the US, a state has a duty to recognize a divorce
However, such exemption shall not apply if the same is not
obtained in a sister state if the spouses were domiciled in
compatible with the solidarity of the family.”
the latter state
3. A divorce obtained in a foreign country would be
b) Property Relations of Spouses
recognized under the same circumstances that a divorce
- Art 16 lex rei sitae
obtained from a sister state is given recognition
- Art 80 of the Family Code. In the absence of a contrary
4. in the Philippines, if both spouses are aliens, we recognize
stipulation in a marriage settlement, the property relations of
a decree of divorce obtained by them abroad if valid
the spouses shall be governed by the Phil laws, regardless of
under their national law
the place of the celebration of the marriage and their
5. If one of the spouses is a Filipino and the other an alien,
residence.
we also recognize the divorce obtained by the alien
However, this rule shall not apply:
spouse abroad
a. where both spouses are aliens
b. with respect to the extrinsic validity of contracts affecting
NOTE: while there is no provision of law requiring Philippine
property not situated in the Philippines and executed in
courts to recognize a divorce decree between non-Filipinos
the country where the property is located; and
rendered by a foreign court, such will be recognized under
c. with respect to the extrinsic validity of the contracts
the principle of international comity, provided that it does not
entered into in the Philippines but affecting property
violate an important public policy of the Philippines
situated in a foreign country whose laws require different
formalities for its extrinsic validity
c) Right to Remarry After Divorce
- Where a marriage between a Filipino citizen and a foreigner
Doctrine of immutability of matrimonial (property)
is validly celebrated and divorce is thereafter validly obtained
regime of the spouses
abroad by the alien spouse capacitating him or her to
Regardless of the change of nationality by the husband or the
remarry, the Filipino spouse shall have the capacity to
wife or both, the original property regime that prevailed at
remarry under Phil. Law.
the start of their marriage prevails
- Par. 2, Art. 26 should be interpreted to include cases
involving parties who, at the time of the celebration of the
B. Divorce and Separation
marriage were Filipino citizens, but later on, one of them
- May be absolute or limited.
becomes naturalized as a foreign citizen and obtains a
- ABSOLUTE DIVORCE is the termination of the legal
divorce decree. The Filipino spouse should likewise be
relationship between the spouses by an act of law.
allowed to remarry as if the other party were a foreigner at
the time of the solemnization of the marriage. To rule
otherwise would be to sanction absurdity and injustice.
d) Recognition of Foreign Divorce and Correction of
Entry
- To avoid multiplicity of suits, both the recognition of divorce
and the correction of entry may now be made in a Rule 108
proceeding.
- there is no more need to file an initial petition for
recognition since the establishment of the authenticity and
validity of the foreign divorce may now be made in the Rule
108 proceeding.
e) Nature of Recognition of Foreign Divorce
Proceedings
- The party applying for recognition must present proof of the
appropriate foreign laws as well as the authenticity of the
documents obtained from foreign courts and offices.
- Philippine courts are not allowed to relitigate the issues
already settled by a foreign court. The decision of the foreign
tribunal is already res judicata to the case.
- So long as the foreign judgment does not patently violate
public policy or prohibitive laws, a local court cannot
substitute its judgment to that of the foreign court.
C. Annulment and Declaration of Nullity of Marriage
- Distinction: ground for divorce occurs after the marriage
celebration while annulment and nullity are based on defects
present at the time of the celebration.
-(Traditional approach)The grounds for annulment and nullity
is governed by the law of the place of the celebration.
-(Policy-centered approach) law of the state of marital
domicile
-The service of summons is governed by the state or the
domicile or the residence of the parties.
D. Parental Relations
- the determination of the legitimacy of a child is submitted
to the personal law of the parents which may either be their
domicile or nationality.
1. If the parents are of the same nationality – their common
personal law (national law or law of domicile) will be
applied
2. If the parents are of different nationalities – national law
of the father governs
a) Determination of Legitimacy of a Child
Art. 163. The filiation of children may be by nature or by
adoption. Natural filiation may be legitimate or illegitimate.
Art. 164. Children conceived or born during the marriage of
the parents are legitimate.
Children conceived as a result of artificial insemination of the
wife with the sperm of the husband or that of a donor or both
are likewise legitimate children of the husband and his wife,
provided, that both of them authorized or ratified such
insemination in a written instrument executed and signed by
them before the birth of the child. The instrument shall be
recorded in the civil registry together with the birth certificate
of the child. (55a, 258a)
Art. 165. Children conceived and born outside a valid
marriage are illegitimate, unless otherwise provided in this
Code. (n)
1. If the child is legitimate – either the common
personal law of the parents or the personal law of
the father if the parents are of different nationalities
governs
2. If the child is illegitimate – The personal law of the
mother is decisive, UNLESS the child is subsequently
recognized by the father, in which case the rules on
legitimate children will be applied
b) Common Law Principles on Legitimacy
c) Parental Authority Over the Child
- derived from the Roman law concept of patria potestas.
- Personal law of the father controls the rights and duties of
parents and children, a principle recognized by most
countries.
- Reference to the personal law of the father may, however,
result in the joint exercise of parental authority by the Father
and the Mother as exemplified in Art. 211 of the Family Code.
- Likewise, the father’s personal law could grant the parental
authority to the mother of the illegitimate children as
on Art. 176 of the Family Code.
E. Adoption
- an act by which relations of paternity and affiliation are
recognized as legally existing between persons not so related
by nature.
- a judicial act, which establishes a relationship of paternity
and filiation and in so doing, endows the child with legitimate
status
- the process of adoption is a matter affecting the status of
the parties and is necessarily governed by lex domicilli. A
problem arises when the prospective adoptive parent is
domiciled in one state and a child domiciled in another.
GR: Aliens are not allowed to adopt Filipino children
XPN: Under RA 8552 or the Domestic Adoption Act of 1998,
aliens (who are not even former Filipino citizens) can adopt in
our country, provided:
1. They have the same qualifications as those required
of Filipino citizens
2. Their countries have diplomatic relations with our
country
3. They have been living in the Philippines for at least 3
years prior to the filing of the petition for adoption,
and maintain such residence until the adoption
decree is entered
4. The have been certified by their diplomatic or
consular offices or by any appropriate government
agency that they have the legal capacity to adopt in
their own countries and
5. Their government allows the adopted child to enter
their own country as their adopted child
Art 184 FC aliens who have some relationship with the
adopted child by consanguinity or affinity (RA 8552 Domestic
Adoption)
 Aliens who have resided in the Ph for at least 3
consecutive years prior to the time of filing the
application for adoption and maintains the residency
until the adoption decree is issued
 The law also requires the submission of a
certification by a diplomatic or consular office or
any appropriate government agency from the
alien’s country which attests to his legal capacity to
adopt and that their state allows the entry of an
adopted daughter or son.
These requirements may be waived when the alien
adopter are related to the adoptee by reasons of
consanguinity or affinity.
WHO CANNOT ADOPT:
Art 335 FC disqualifies from being adopters those aliens that
are:
1. non-residents of the Ph
2. who are residents of the Ph but the Rep of Ph has broken
diplomatic relations with their govt.
Special aliens who can adopt under RA 8552
1. A former Filipino citizen who seeks to adopt a
relative within the 4th degree of consanguinity or
affinity
2. One who seeks to adopt the legitimate son or
daughter of his or her Filipino spouse
3. One who is married to a Filipino citizen and seeks to
adopt jointly with his or her spouse a relative within
the 4th degree of consanguinity or affinity of the
Filipino spouse
 These aliens need not comply with the residency in the
Philippines and they also need not submit a certification that
they have the capacity to adopt from the diplomatic or
consular office of their country in the Philippines or any other
government agency
Note: RA 8552 still requires that the (alien) husband and
wife must jointly adopt. However in cases where the spouses
are legally separated, the husband or the wife can adopt
alone, and the consent of the other spouse to an adoption
filed by one spouse is not necessary
RA 8043 or Inter-Country Adoption
Applications for inter-country adoption are filed with the RTC
or with the Inter-Country Adoption Board. It may also be filed
with the counterpart agency of the Board in a foreign
country. Sec 10 of RA 8043 provides that our ROC govern the
adoption by judicial proceedings.
If the trial custody and the pre-adoptive relationship between
the applicant/s and the child prove satisfactory, the applicant
shall file a petition for adoption with the court or tribunal in
the country where the applicant resides. When a decree of
adoption is issued by the foreign court, the same shall be
recorded with the appropriate foreign and local civil register.
Effects of Adoption
- The legal effects of adoption are determined by the same
law that created the relationship of adoption
US vs. Jarvison p266
Cook vs. Cook, 104 P.3d 857 (2005)
Obergefell vs. Hodges, 135 S. Ct. 2584 (2015)
Langan vs. St Vincent Hospital of NY, 802 NYS. 2d 476 (NY
App. Div. 20015)
Tenchavez vs. Escano
Issue: WON the divorce issued by a Nevada Court can be
recognized in our jurisdiction
Held: NO. Under Philippine law, the valid marriage between
Tenchavez and Escaño remained subsisting and undissolved
notwithstanding the decree of absolute divorce that the wife
sought and obtained in Nevada. Article 15 CC: “Laws relating
to family rights and duties or to the status, condition and
legal capacity of persons are binding upon the citizens of the
Philippines, even though living abroad.”
Here, at the time the divorce decree was issued, Vicenta, like
her husband, was still a Filipino citizen. She was then still
subject to Philippine law, which does not admit absolute
divorce. Thus, under Philippine law, the divorce was invalid.
The adulterous relationship of Escano with her American
husband is enough grounds for the legal separation prayed
by Tenchavez.
Van Dorn vs. Romillo
- Aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid
according to their national law.
- Thus, a divorced american husband may not go against the
Filipina wife for accounting of conjugal property once the
divorce decree is issued.
- A foreign spouse can no longer claim to be the spouse of
his/her filipino partner. The foreign spouse can therefore
not maintain a criminal case against the former spouse on
the ground that he/she is no longer a interested party to
the case.
San Luis vs. San Luis
A divorce decree validly obtained by the alien spouse is valid
in the Philippines, and consequently, the Filipino spouse is
capacitated to remarry under Philippine law.
Alien spouse is not a proper party in filing the adultery suit
against his Filipino wife. The Court stated that "the severance
of the marital bond had the effect of dissociating the former
spouses from each other, hence the actuations of one would
not affect or cast obloquy on the other."
Respondent’s legal capacity to file the subject petition for
letters of administration may arise from her status as the
surviving wife of Felicisimo or as his co-owner under Article
144 of the Civil Code or Article 148 of the Family Code.
Pilapil vs. Ibay-Somera, 174 SCRA 653
Issue: whether the divorced husband may file a case for
adultery against his divorced wife
Held: The Court recognized the validity of a divorce obtained
abroad. In the said case, it was held that the alien spouse is
not a proper party in filing the adultery suit against his
Filipino wife. The Court stated that "the severance of the
marital bond had the effect of dissociating the former
spouses from each other, hence the actuations of one would
not affect or cast obloquy on the other."
Republic vs. Orbecido
Article 26 Par.2 should be interpreted to include cases
involving parties who, at the time of the celebration of the
marriage were Filipino citizens, but later on, one of them
becomes naturalized as a foreign citizen and obtains a
divorce decree. The Filipino spouse should likewise be
allowed to remarry as if the other party were a foreigner at
the time of the solemnization of the marriage.
Corpuz vs. Sto. Tomas
Facts: petitioner, a former Filipino citizen and now
naturalized canadian citizen filed a petition for judicial
recognition of foreign divorce and/or declaration of marriage
as dissolved before the RTC.
Issue: whether the second paragraph of Article 26 of the
Family Code grants aliens like Corpuz the right to institute a
petition for judicial recognition of a foreign divorce decree?
Held: Alien spouses cannot claim the right as it is only in
favor of Filipino spouses. The legislative intent of Article 26 is
for the benefit of the clarification of the marital status of the
Filipino spouse.
However, aliens are not strip to petition to the RTC for his
foreign divorce decree as it is a conclusive presumption of
evidence of the authenticity of foreign divorce decree with
conformity to the alien's national law.
Fujiki vs. Marinay (Repeated- foreign judgment)
Ramirez Marcaida vs. Aglubat
Issue: WON the Escritura de Adoption authenticated by V-
consul in Madrid, Spain is registrable in the Philippines.
Held: Yes. Adoption created under the law of a foreign
country is entitled to registration in the corresponding civil
register of the Philippines.
The status of adoption, once created under the proper foreign
law, will be recognized in this country except where public
policy or interests of its inhabitants forbid its enforcement
and demand the substitution of lex fori.
Effects of such adoption shall be governed by the laws of this
country.
Republic vs. Miller
Issue: are aliens allowed to adopt in Ph?
Held: Yes. An alien qualified to adopt under the Child and
Youth Welfare Code, which was in force at the time of the
filing of the petition, acquired a vested right which could not
be affected by the subsequent enactment of a new law
disqualifying him.
Vested rights include not only legal or equitable title to the
enforcement of a demand, but also an exemption from new
obligations created after the right has vested.
Therefore, an alien who filed a petition for adoption before
the effectivity of the Family code, although denied the right
to adopt under Art. 184 of said Code, may continue with his
petition under the law prevailing before the Family Code.
V. Choice of Law in Property
A. Conflict of law on property
B. The controlling law
-The applicable law is the lex situs.
-The rationale for the lex situs or lex re sitae rule now
universally recognized is that being physically a part of the
country, it should be subject to the laws thereof.
Movable property
 Choses in action refers to all intangible objects
Debts arising from loan
 Debts represented by a document that is both Sec. 5. Any transfer or conveyance of a unit or an apartment,
capable of delivery and susceptible to negotiation as office or store or other space therein, shall include the
separate legal entity transfer or conveyance of the undivided interest in the
 Choses in possession refers to all the tangible common areas or in a proper case, the membership or
physical objects shareholdings in the condominium corporation: Provided,
however, That where the common areas in the condominium
C. Capacity to transfer or acquire property project are held by the owners of separate units as co-
The capacity of the person to transfer or acquire real owners hereof, no condominium unit therein shall be
property is governed by the law of the place where the conveyed or transferred to persons other than Filipino
property is located. citizens or corporation at least 60% of the capital stock of
The theory of lex sitae governs the following things which belong to Filipino citizens, except in cases of hereditary
connected with real property: succession. Where the common areas in a condominium
project are held by a corporation, no transfer or conveyance
a)the extrinsic validity of alientation of a unit shall be valid if the concomitant transfer of the
b)Transfers appurtenant membership or stockholding in the corporation
c)Mortgages will cause the alien interest in such corporation to exceed the
d)Capacity of the parties limits imposed by existing laws.
d)Interpretation of documents
e)Effects of ownership I. Situs of Certain Properties
f) Co-ownership CREDITS OR DEBTS
g)Accession Involuntary transfer of The situs of the place
h)Usufruct assignment of a debt where the debtor may be
i)Lease (garnishment) served (usually his
j)Easement domicile)
k)Police power The proper law of the
l)Eminent Domain contract (the proper law
m)Taxation of the original transaction
n) Quieting of title out of which the chose in
o)Registration and action or credit arose)
p)Prescription
Other theories:
D. Extrinsic and intrinsic validity of conveyances 1. The law of the
Formalities of a contract to convey property are likewise Voluntary assignment place where the
governed by the lex situs or transfer of credit assignment is
Rules: executed
1. Any transfer of property which requires registration of 2. The law of the
title cannot be accepted by the registry of property unless the place where
formal requirements of the lex situs are complied with performance or
2. Lex situs law applies to the essential validity of transfer payment is
unless the lex intentionis is clearly established. normally
3. Lex situs also governs the effects of the conveyance of expected
properties. 3. The national law
of the parties
E. Lex Situs Rule; Exceptions Situs of a debt for Domicile of creditor
1. Succession  governed by national law (in taxation purposes
Philippines) not lex situs Administering debts Situs is the place where
2. Contracts involving real property but do not deal the assets of the debtor
with title or real rights over the property, the issue are situated
being the contractual rights and liabilities of parties NEGOTIABLE INSTRUMENTS
 governed by the proper law of the contract (lex The law that Law governing rights
loci voluntatis or lex loci intentionis) determines whether embodied in the
3. In contracts where real property is given as security the instrument is instrument
by way of mortgage to secure a principle contract negotiable or not
(i.e. loan)  loan is governed by the proper law of Note: American
the contract which the mortgage is governed by the Restatement claims that
lex situs the situs is the place
4. While the validity of the transfer of land must be where the instrument was
determined by the lex situs, the validity of the executed
contract to transfer is determined by the proper law
The law that The law of the situs of the
of the contract determines the validity instrument at the time of
of the transfer, transfer, delivery, or
F. Rule as to real or personal property delivery, or negotiation negotiation
-the PH adheres to the rule of lex rei sitae or the law of the of the negotiable
place where the property is situated. instrument
SHARES OF STOCKS OF CORPORATIONS
G. Specific rules as to ownership of real property
Sale of shares of stocks Law of the place of
-PH law governs real property situated within its territiory.
incorporation since
- sec 7, 187 consti: "Save in cases of hereditary succession,
transfer is recorded in the
no private land shall be transferred or conveyed except to
books of the corporation
individuals, corporations, or associations qualified to acquire
Sale of corporate Governed by the proper
or hold lands of the public domain."
shares as between the law of the contract (lex
-sec 7 allows transfer to qualified individuals through
parties loci voluntatis or lex loci
hereditary succession (intestate).
intentionis)
- LEASE CONTRACT W/ ALIENS ALLOWED
-invalid: the lease is to make the lessee the owner, as when Taxation on dividends Law of the place of
the lease is perpetual in character, or couple with an option received by corporate incorporation
to buy. (see Llantino case) shares
FRANCHISES
H. Condominium Act Franchises Law of the state that
 - special privileges granted them
conferred by the
government on an
individual or corporation
Goodwill of a business
Goodwill of business Good will of business and
taxation thereon are
-Art. 521, NCC: property governed by the law of
and may be transferred the place where the
together with the right to business is carried on
use the name under which
the business is conducted
“Goodwill”
-The patronage of any
established trade or
business
Patents, copyrights, trademarks, trade names,
and service marks
Patents, copyrights, GR: in the absence of a
trade marks, trade treaty, protected only by
names the state that granted or
recognized them
Art. 520, NCC: a trade
mark or a trade name
duly registered in the
proper government
bureau or office is owned
by and pertains to the
person, corporation, or
firm registering the same,
subject to the provisions
of special laws
Intellectual property
Code: Any foreign
corporation being a not apply.
national or domiciliary o a
country which is a party to
a convention, treaty, or
agreement related to
intellectual property rights
to which the Philippines is
also a party or which
extends reciprocal rights
to our nationals by law,
“shall be entitled to the
benefits to the extent
necessary to give effect to
any provision of such
convention.”
- Foreign corporation even
if not engaged in business
in the Philippines may
nevertheless bring a civil
or administrative action,
for opposition,
cancellation, infringement,
or unfair competition.
J. Patents, Trademarks, Trade Name and Copyright
Trademark – is the name or symbols of goods made or
manufactured ex. Guess
Trade name – the name or symbol of the store or business
place ex. Rustan’s
Service mark – the name or symbol of services rendered ex.
Federal Express
Copyright – the right of literary property as recognized and
sanctioned by positive law.
A certificate of registration of a trade name or a
trademark is prima facie evidence of the validity of such
registration but the same may be rebutted. Generally, the
protection is for 20 years renewable for another 20 years.
Under the law, “any foreign corporation or juristic person
to which a mark or trade name has been registered or
assigned under this Act may bring an action hereunder for
infringement, for unfair competition or false designation of
origin or false description whether or not it has been licensed
to do business in the Philippines under the corporation code,
at the time it brings the complaint: provided that the country
of which said foreign corporation or juristic person is a citizen
or in which it is domiciled, by treaty, convention or law,
grants a similar privilege to corporations or juristic persons of
the Philippines.
The Court decided that although the company has not
done business in the Philippines, it has the right to protect its
reputation.The Court sustained the well established rule that
the right to the use of company’s corporate and trade name
is a property right which may be asserted against the whole
world.
Laurel vs. Garcia
No conflict of law situation exists. A conflict of law situation
arises only when:
(1) There is a dispute over the title or ownership of an
immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential
validity and effect of the transfer, or the interpretation and
effect of a conveyance, are to be determined; and
(2) A foreign law on land ownership and its conveyance is
asserted to conflict with a domestic law on the same matters.
Hence, the need to determine which law should apply.
The issues are not concerned with validity of ownership or
title. There is no question that the property belongs to the
Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State.
And the validity of the procedures adopted to effect its sale.
This is governed by Philippine Law. The rule of lex situs does
Roberts vs. Locke
It has been settled black-letter law that a court lacks
authority to directly determine and affect title to real
property located outside the state in which the court sits.
However, it is equally well-established that a court of equity
having jurisdiction over a person may act indirectly upon that
person's extraterritorial real estate by ordering him or her to
act or to cease to act in some particular way in relation to the
property. That is, courts distinguish judgments calculated to
affect title to property itself from orders directing owners
subject to their jurisdiction to take certain actions concerning
property located outside the jurisdiction.
A Wyoming court having personal jurisdiction over the parties
in a divorce action may therefore order one of them to
convey his or her interest in real property to the other, even
though the property is in a foreign country.
Tayag vs. Benguet Consolidated
Issue: won Ph courts have power and authority over shares
of stocks held by a domiciliary administrator
Tayag, as ancillary administrator, has the power to gain
control and possession of all assets of the decedent within
the jurisdiction of the Philippines. There can be more than
one administration of an estate. When a person dies intestate
owning property in the country of his domicile as well as in a
foreign country, administration is had in both countries. That
which is granted in the jurisdiction of decedent’s last domicile
is termed the principal administration, while any other
administration is termed the ancillary administration. The
reason for the latter is because a grant of administration
does not ex proprio vigore have any effect beyond the limits
of the country in which it is granted. Hence, an administrator
appointed in a foreign state has no authority in the
[Philippines]. The ancillary administration is proper,
whenever a person dies, leaving in a country other than that
of his last domicile, property to be administered in the nature
of assets of the deceased liable for his individual debts or to
be distributed among his heirs.

Probate court has authority to issue the order enforcing the
ancillary administrator’s right to the stock certificates when
the actual situs of the shares of stocks is in the Philippines. It
would follow then that the authority of the probate court to
require that ancillary administrator's right to "the stock
certificates covering the 33,002 shares ... standing in her
name in the books of [appellant] Benguet Consolidated,
Inc...." be respected is equally beyond question. For
appellant is a Philippine corporation owing full allegiance and
subject to the unrestricted jurisdiction of local courts. Its
shares of stock cannot therefore be considered in any wise as
immune from lawful court orders. Our holding in Wells Fargo
Bank and Union v. Collector of Internal Revenue finds
application. "In the instant case, the actual situs of the
shares of stock is in the Philippines, the corporation being
domiciled [here]." To the force of the above undeniable
proposition, not even appellant is insensible. It does not
dispute it. Nor could it successfully do so even if it were so
minded.
Ramirez vs Vda. De Ramirez
The SC held that the Constitutional provision which enables
aliens to acquire private lands does not extend to
testamentary succession for otherwise the prohibition will be
for naught and meaningless. The SC upheld the usufruct in
favor of Wanda because although it is a real right, it does not
vest title to the land in the usufructuary and it is the vesting
of title to land in favor of aliens which is proscribed by the
Constitution.
Matthews vs. Taylor
Benjamin has no right to nullify the Agreement of Lease
between Joselyn and petitioner. Benjamin, being an alien, is
absolutely prohibited from acquiring private and public lands
in the Philippines. Considering that Joselyn appeared to be
the designated ―vendee in the Deed of Sale of said property,
she acquired sole ownership thereto. This is true even if we
sustain Benjamin‘s claim that he provided the funds for such
acquisition. By entering into such contract knowing that it
was illegal, no implied trust was created in his favor; no
reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part
of the conjugal/community property of the spouses. If the
property were to be declared conjugal, this would accord the
alien husband a substantial interest and right over the land,
as he would then have a decisive vote as to its transfer or
disposition.
Cheesman vs. Intermediate Appellate Court
The fundamental law prohibits the sale to aliens of residential
land. Section 14, Article XIV of the 1973 Constitution ordains
that, "Save in cases of hereditary succession, no private land
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands
of the public domain."
He had and has no capacity or personality to question the
subsequent sale of the same property by his wife on the
theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To
sustain such a theory would permit indirect controversion of
the constitutional prohibition. If the property were to be
declared conjugal, this would accord to the alien husband a
not insubstantial interest and right over land, as he would
then have a decisive vote as to its transfer or disposition.
This is a right that the Constitution does not permit him to
have.
Llantino vs. Co Liong Chong
GR: LEASE CONTRACT W/ ALIENS ALLOWED
-there's no option for Molina to buy the said property
-no scheme to circumvent the Consti prohibition
-Sps admitted that Molina merely wanted to lease the land
(and not buy it from them)
-nothing to prevent Llantino sps from disposing their title to
land to any qualified party, but subject to the right of Molina
to the lease
Ratio why allowed: since alien's stay in RP is temporary, they
may be granted temporary rights such as a lease contract
which is not prohibited by the constitution
IF THERE'S AN OPTION TO BUY THE PROPERTY
GR: INVALID
X: if the alien subsequently acquires Philippine Citizenship
X (to valid lease contracts w/ aliens): If there are
circumstances attendant to its execution which are used to
circumvent the constitutional prohibition
-example: Option to buy + lease contract lasts for more than
50 years
…virtual transfer of ownership: the owner divests himself in
stages not only of the right to enjoy the land (jus possidendi,
jus utendi, jus fruendi, jus abutendi)
Even if the lease contract was virtually a transfer of
ownership, it would be a moot point because Molina became
a naturalized citizen of RP, thus, has capacity to own land.
VI. Choice of Law in Contracts
A. Conflict of laws in contractual relations
B. Primacy of contractual stipulations
Art. 1306 CC: The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient provided they are not contrary to law, morals,
good customs, public order, or public policy.
C. Contracts involving a foreign element
By reason of these differing rules, the forum court presented
with a contracts case involving a foreign element must be
aware that the parties may have entered into a contract with
a particular state law in mind, expecting it to govern
questions that may arise from the contract. To do otherwise
would defeat the parties reasonable expectations.
D. Extrinsic validity of contracts
Lex loci celebrationis governs the formal or extrinsic
validity of contracts. Art. 17 “The forms and solemnties of
contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are
executed”. These principles are derived from a broader
proposition that the place governs the act (locus regit
actum).
Bar Q: Suppose our law provides that certain instrument
shall be void and unenforceable unless they beat a
documentary stamps, and a written contract is enteres into in
the Phils. to be performed in France. The contract was not
stamped in the Philippines as required by its law. The placing
of stamp on written contract is not however required by the
laws of France. In an action brought on the contract in
France, may the defendant avail himself of the invalidity of
contract?
Anwer: Since the forum of the problem is France, the
answer will depend not on Philippine Conflict of laws but on
French conflict of laws. On the assumption that the French
conflicts rule on the matter is identical with ours, it is
believed that the contract should be considered valid, and the
defense of invalidity cannot be sustained. The rule to apply is
evidently lex loci voluntatis or the lex loci intentionis – that
which was voluntarily agreed upon or intended by the parties.
E. Intrinsic Validity of contracts
The intrinsic validity of contracts including the considerations
or cause thereof, the interpretation of the instruments, and
the nature or amount of damages for breach or non-
performance must be governed by the proper law of the
contract (lex contractus). This is the law voluntarily agreed
upon by the parties (lex loci voluntatis) or the law intended
by them expressly or implicitly (lex lcoci intentionis)
1. lex loci contractus or lex loci celebrationis
The law of the place of the making or lex loci contractus
refers to the place where the contract is made.
2. lex loci solutionis
The law of the place of performance calls for the reference
to a law other than the place where the acts of offer and
acceptance took place. All matters relating to the time, place
and manner of performance, sufficiency of performance and
valid excuses for non-performance are determined by lex loci
solutionis which is useful because it is undoubtedly always
connected to the contract in a significant way.
3. lex loci intentionis
The intrinsic validity of contracts should be governed by
the law intended by the parties or lex loci intentionis. This
intention may be expressed in the choice-of-law provision in
the contract
Art. 1306 of the civil code “The contracting parties may
establish such stipulations, clauses, terms and conditions as
they may deem convenient provided they are not contrary to
law, morals, good customs, public oerder or public policy”
F. Capacity to enter into contracts
The capacity of the parties to enter into contract is generally
governed by the national law (Art. 15, civil code) Except in
the case of alienation or encumbering of properties, both real
and personal, for here the capacity is governed by the lex
situs (Art, 16 par 1)
Another exception is that case of Insular Gov’t v. Frank which
disregarded the nationality law principle. Frank had the
capacity to enter into a contract whether in the US or in the
Phils. since he was of majority age as determined by his
national law. The SC held that in a case not involving
property that instead of national law, what should determine
capacity to enter into a contract is the lex loci celebrationis.
H. Choice of law issues in Conflicts Contracts Case
1. Choice of forum clause
Under the principle of freedom of contract, the parties may
stipulate on the law to govern their contract agreement.
2. Contract with arbitration clause
A multinational contract that contains an arbitration clause
gives rise to the issue of whether one of the parties may
compel the other to submit to arbitration.
3. Adhesion contracts
It is one that is not negotiated by the parties, having been
drafted by the dominant party and usually embodied in a
standardized form. It is called a contract of adhesion because
the only participation of the other party is in affixing her
signature or adhering thereto. Likewise known as a “take it or
leave it contract”
4. Special contracts
Sale/barter of goods- law where the property sold is located
Simple loan granted by financial institutions-law of
permanent place of business
Loan granted by private persons or the subject matter of the
loan is personal-law of the place where was obtained
Pledge, antichresis, chattel mortgage-extrinsic and intrinsic
validity of the contract by the law of the place where the
property is situated.
5. Applicable law in absence of effective choice
a. place of contracting
b. place of negotiating the contract
c. place of performance
d. situs of the subject matter of the contract
e. domicile, residence, nationality, place of incorporation and
place of business of the parties
f. place under whose local law the contract will be most
effective
I. Choice of law stipulations, waiver of renvoi, depecage
Choice of law stipulations
-the principle of autonomy of contracts allows the parties to
stipulate the law that shall govern their contractual relations.
-if the parties do not specify the extent of applicability of
their chosen law, the chosen law will normally apply the ff
concerns:
a) Interpretation;
b) Rights and obligations arising from the contract;
c) Performance and consequences of non-
performance, including assessment of damages;
d) Various ways of extinguishing obligations, and
prescription and limitation periods;
e) Validity and the consequences of invalidity of the
contract;
f) Burden of proof and legal presumptions; and
g) Pre-contractual obligations.
Waiver of Renvoi
-rules of private international law will find no application once
a foreign law is chosen by the parties. (without regard for the
conflict of laws provisions)
Depecage
-process whereby different issues in a single case arising out
of a single set of facts may be decided according to the laws
of different states.
J. Defenses to jurisdiction and choice of law
Hasegawa v. Kitamura case
K. Limitations to Choice of Law
1. parties may not contract away applicable provisions of law
especially peremptory provisions heavily impressed with
public interest
2. the use of cognotiv clause which is defined as that the
debtor may agree to be subject to the jurisdiction of a
specific court in case of breach of contract or default in
payment. A cognotiv clause usually waives the debtor’s right
to notice or authorized the entry of judgment against him.
Bagong Filipino Overseas Corporation National Labor
Relations vs. NLRC
We hold that the shipboard employment contract is
controlling in this case. The contract provides that the
beneficiaries of the seaman are entitled to P20,000 over and
above the benefits for which the Philippine Government is
liable under Philippine law. Hongkong law on workmen's
compensation is not the applicable law. The case of Norse
Management Co. vs. National Seamen Board , G. R. No.
54204, September 30, 1982, 117 SCRA 486 cannot be a
precedent because it was expressly stipulated in the
employment contract in that case that the workmen's
compensation payable to the employee should be in
accordance with Philippine Law or the Workmen's Insurance
Law of the country where the vessel is registered whichever
is greater.
Atienza vs. Philimare Shipping
Norse is not applicable to the present petition in that case, it
was specifically stipulated by the parties in the Crew
Agreement that "compensation shall be paid to employee in
accordance with and subject to the limitations of the
Workmen's Compensation Act of the Philippines or the
Workmen's Insurance Law of the registry of the vessel,
whichever is greater.
Pakistan International Airlines vs. Blas Ople
The principle of party autonomy in contracts is not an
absolute principle. The rule in Article 1306 of the Civil Code is
that the contracting parties may establish such stipulations
as they may deem convenient, “provided they are not
contrary to law, morals, good customs, public order or public
policy.” Thus, counter-balancing the principle of autonomy of
contracting parties is the equally general rule that provisions
of applicable law, especially provisions relating to matters
affected with public policy, are deemed written into the
contract. The law relating to labor and employment are
impressed with public interest. Paragraph 5 of that
employment contract was inconsistent with Articles 280 and
281 of the Labor Code and thus, cannot be given effect.
These circumstances – the employer-employee relationship
between the parties; the contract being not only executed in
the Philippines, but also performed here, at least partially;
private respondents are Philippine citizens and petitioner,
although a foreign corporation, is licensed to do business and
actually doing business and hence resident in the Philippines;
lastly, private respondents were based in the Philippines in
between their assigned flights to the Middle East and Europe
– show that the Philippine courts and administrative agencies
are the proper fora for the resolution of contractual disputes
between the parties. The employment agreement cannot be
given effect so as to bar Philippine agencies and courts
vested with jurisdiction by Philippine law. Moreover, PIA
failed to plead and proved the contents of Pakistan law on
the matter, it is therefore presumed that the applicable
provisions of the law of Pakistan are the same as the
applicable provisions of Philippine law. Hence, the provision in
the contract that the venue for settlement of any dispute
arising out of or in connection with the agreement is to be
resolved only in courts of Karachi Pakistan is not valid.
Erie Insurance Exchange vs. Hefferman, 925 A. 2d 636
(Md.2007)
Government vs. Frank
The contention of the defendant that he is an adult in the US
but he is still a minor in the Philippines where the contract
was implemented is not disputed. In fact the court
considered the defendant’s contention as a reason to apply
the principle: that when matters bearing upon the execution,
interpretation and validity of the contract are determined by
the law of the place where the contract is made or “lex loci
celebrationis” .
Since the contract was made in the US and US law considers
the defendant of legal age, he has the legal capacity to enter
into a contract and therefore making the contract enforceable
against him.
In re KMH, 169 P.3d 1025
Triple Eight Integrated Services, Inc. v. NLRC
stablished is the rule that lex loci contractus (the law of the
place where the contract is made) governs in this jurisdiction.
There is no question that the contract of employment in this
case was perfected here in the Philippines. Therefore, the
Labor Code, its implementing rules and regulations, and
other laws affecting labor apply in this case. Furthermore,
settled is the rule that the courts of the forum will not
enforce any foreign claim obnoxious to the forum’s public
policy. Here in the Philippines, employment agreements are
more than contractual in nature. The Constitution itself, in
Article XIII Section 3, guarantees the special protection of
workers.
Hasegawa vs. Kitamura
Issue: Whether or not the subject matter jurisdiction of
Philippine courts in civil cases for specific performance &
damages involving contracts executed outside the country by
foreign nationals may be assailed on the principles of lex loci
celebrationis, lex contractus, “the state of the most
significant relationship rule,” or forum non conveniens.
Held: NO. In the judicial resolution of conflicts problems, 3
consecutive phases are involved: jurisdiction, choice of law,
and recognition and enforcement of judgments. Jurisdiction &
choice of law are 2 distinct concepts. Jurisdiction considers
whether it is fair to cause a defendant to travel to this state;
choice of law asks the further question whether the
application of a substantive law w/c will determine the merits
of the case is fair to both parties. The Court finds the
invocation of these grounds unsound.
In this case, only the 1st phase is at issue—jurisdiction.
Lex loci celebrationis relates to the “law of the place of the
ceremony” or the law of the place where a contract is made.
The doctrine of lex contractus or lex loci contractus means
the “law of the place where a contract is executed or to be
performed.” It controls the nature, construction, and validity
of the contract and it may pertain to the law voluntarily
agreed upon by the parties or the law intended by them
either expressly or implicitly. Under the “state of the most
significant relationship rule,” to ascertain what state law to
apply to a dispute, the court should determine which state
has the most substantial connection to the occurrence and
the parties. In a case involving a contract, the court should
consider where the contract was made, was negotiated, was
to be performed, and the domicile, place of business, or place
of incorporation of the parties. This rule takes into account
several contacts and evaluates them according to their
relative importance with respect to the particular issue to be
resolved.
Since these 3 principles in conflict of laws make reference to
the law applicable to a dispute, they are rules proper for the
2nd phase, the choice of law. They determine which state's
law is to be applied in resolving the substantive issues of a
conflicts problem. Necessarily, as the only issue in this case
is that of jurisdiction, choice-of-law rules are not only
inapplicable but also not yet called for.
Further, Nippon’s premature invocation of choice-of-law rules
is exposed by the fact that they have not yet pointed out any
conflict between the laws of Japan and ours. Before
determining which law should apply, 1st there should exist a
conflict of laws situation requiring the application of the
conflict of laws rules. Also, when the law of a foreign country
is invoked to provide the proper rules for the solution of a
case, the existence of such law must be pleaded and proved.
It should be noted that when a conflicts case, one involving a
foreign element, is brought before a court or administrative
agency, there are 3 alternatives open to the latter in
disposing of it: (1) dismiss the case, either because of lack of
jurisdiction or refusal to assume jurisdiction over the case;
(2) assume jurisdiction over the case and apply the internal
law of the forum; or (3) assume jurisdiction over the case
and take into account or apply the law of some other State or
States. The court’s power to hear cases and controversies is
derived from the Constitution and the laws. While it may
choose to recognize laws of foreign nations, the court is not
limited by foreign sovereign law short of treaties or other
formal agreements, even in matters regarding rights
provided by foreign sovereigns.
Neither can the other ground raised, forum non conveniens,
be used to deprive the RTC of its jurisdiction. 1st, it is not a
proper basis for a motion to dismiss because Sec. 1, Rule 16
of the Rules of Court does not include it as a ground. 2nd,
whether a suit should be entertained or dismissed on the
basis of the said doctrine depends largely upon the facts of
the particular case and is addressed to the sound discretion
of the RTC. In this case, the RTC decided to assume
jurisdiction. 3rd, the propriety of dismissing a case based on
this principle requires a factual determination; hence, this
conflicts principle is more properly considered a matter of
defense.
VI. Choice of Law in Wills, Succession and
Administration of Estates
A. Conflicts of Law in Succession
-foreign element can be in the form of will executed
overseas, of a foreigner dying within the Ph territory and
leaving properties here and abroad, of a Filipino dying
overseas with properties in the Ph, or of a testator specifying
a foreign law to govern the disposition of his estate.
- Succession is a mode of acquisition by virtue of which the
property, rights and obligations to the extent of value the
value of the inheritance, of a person are transmitted through
his death to another or others either by his will or operation
of law.
B. Allowance of wills proved outside of the Philippines
- when a will is duly probated in a foreign country, the same
may also be allowed in Ph by filing of a petition for its
allowance.
- in the petition, an authenticated copy of the decree of
allowance from the foreign court be duly attached to the
petition to comply with the rules on proof of foreign law and
proof of foreign documents.
-when these jurisdictional requirements are properly
complied with, the will then may be allowed here as if it were
originally probated in our jurisdiction.
- the will may then be enforced by the issuance of letters
testatmentary by the court.
C. Extrinsic validity of wills
Extrinsic validity of will deals with the forms and solemnities
in the making of wills; the number of witnesses; the form of
the will – oral, private instrument, public instrument
Art. 17 “The forms and solemnities of contracts, wills, and
other public instruments shall be governed by the laws of the
country in which they are executed”.
When the acts referred to are executed before the diplomatic
or consular officials of the RP in a foreign country, the
solemnities established by the Philippine laws shall be
observed in their execution.
The following are our conflicts rules on the extrinsic validity
of wills:
1. if the will was made by an alien abroad, he must comply
with the formalities of the lex nationalii or lex domicilii or
Philippine law (Art. 816, civil code) or lex loci celebrationis
(Art. 17, par. 1, civil code)
2. If a Filipino makes a will abroad, he may comply with
the formalities of the lex nationalii (Philippine law) or lex loci
celebrationis (law of the place where he may be or where he
makes a will) (Art. 815, civil code)
3. If an alien makes a will in the Philippines, he is
allowed to comply with the formalities of his own country (lex
nationalii) or the law of the Philippines (Art. 817, civil code)
EXTRINSIC VALIDITY OF JOINT WILLS
The following are the rules:
1. If joint wills are made by Filipinos abroad, the same shall
be considered void in the Philippines even if they were valid
in the place where they were executed.
2. joint wills made by aliens abroad shall be considered valid
in the Philippines if valid according to the lex nationalii or lex
domicilii or lex loci celebrationis
3. joint wills made by aliens in the Phils., even if valid in
accordance with their national law, will not be countenanced
in the Phils. because otherwise our public policy may be
militated against.
EXTRINSIC VALIDITY OF HOLOGRAPHIC WILLS
The rules contained in Art. 816 & 817 on wills made by aliens
abroad or in the Phils., apply to holographic wills.
Art. 810 of the civil code defines holographic will as one
entirely written, dated and signed by the hand of the testator
himself. It is not subject to any other form, need not be
witnessed and may be made in or out of the Phils.
D. Intrinsic validity of wills
The intrinsic validity of the wills including the order of
succession, the amount of successional rights, and the
intrinsic validity of the provisions of the will shall be governed
by the lex nationalii of the deceased regardless of the
location and nature of the property whether real or personal.
(Art. 16, par. 2, civil code)
Art. 16 par 2 “However, intestate and testamentary
successions, both with respect to the order of succession and
the amount of successional rights and to the intrinsic validity
of the testamentary provisions shall be regulated by the
national law of the person whose succession is under
consideration, whatever may be the nature of the property
and regardless of the country where said property may be
found”
E. Interpretation of wills
Pursuant to the nationality principle in our Civil Code, the
interpretation of a will or testament must be governed by the
rules of interpretation of the decedent’s national law.
In contracts, the principal rule in wills is that “where the
terms are clear and unambiguous, the lex intentionis of the
parties should be followed.” “When there are ambiguous
provisions, the intention of the party or the exact meaning he
may have ascribed to them can be inferred by referring to
the context of the instrument or the testator’s
contemporaneous and subsequent acts.
In case a will admits of different dispositions, the
interpretation by which the disposition is to be operative shall
be referred.
F. Revocation
Being a unilateral and purely personal act, a will is revocable
at any time before the death of the testator. Any waiver or
restriction of this right is void.
If a revocation done outside the Philippines by a person who
does not have a domicile in this country is valid when it is
done according to:
1. the law of the place where the will was made (lex loci
celebrationis)
2. the law of the place where the testator had his domicile at
that time (lex loci domicilii)
If a revocation is done outside the Phils. by one domiciled in
the Philippines, the law of the domicile, which is Phlippine law
or the law of the place of the revocation (lex loci actus)
controls.
Under the Philippine law, wills are deemed revoked except in
the following cases:
1. by implication of law
2. by some will, codicil or other writing, executed as
provided in the case of wills
3. by burning, tearing, cancelling or obliterating the will with
the intention of revoking it, by the testator himself or by
some other persons in his presence and by his express
direction.
QUERY: When a testator revokes his will in the state where
he is domiciled and then changes his domicile to another
state where he dies. If the revocation of his will was valid by
the laws of the State where he revoked it but invalid by the
laws of the state of domicile at the time of his death, which
law will control the situation?
ANSWER: Common law countries apply law of the domicile at
the time of the testator’s death. However, Philippine law
clearly provides the law of the place of revocation
G. Probate
Probate is an adjudication that the last will and testament of
a person was executed with all the formalities required by
law.
Under Rule 70, Sec. 9 of the Revised Rules of Court, a will
shall be disallowed in any of the following cases:
1. If not executed and attested as required by law
2. If the testator was insane or otherwise incapable to make
a will at the time of its execution
3. If it was executed under duress, the influence of fears and
threats
4. If it was produced by undue and improper pressure and
influence on the part of the beneficiary or some other person
for his benefits
5. If the signature of the testator was procured by fraud or
trick and he did not intend that the instruments should be his
will at the time of fixing the signature thereat
H. Administration of Estates
The administration of the estate of the deceased
consists of the duties to manage and settle the decedent’s
debts and distribute the residuum of the estate to the
deceased’s heirs. When the will has been proved and allowed,
it is the duty of the probate court to issue letters
testamentary thereon to the person so named in the will
upon the latter’s application.
The title of domiciliary administrator is of no
extraterritorial force and extends only to assets of a decedent
found within the state or country where it was granted.
An administrator appointed in one state has no
power over properties in another state or country. An
ancillary administrator is one appointed by the court of
foreign country where the assets or property are located.
I. Trusts
Trust is a right of property real or personal held by
one party for the benefit of another. It may be created by
deed during the lifetime of the settler or by will.
Testamentary trusts depend for their extrinsic
validity on the will which created them. The rules governing
wills as to capacity and extrinsic requirements apply. Since a
trust involves a property, the rule of lex situs determines the
validity of a trust created by a last will and testament.
Dalton v. Giberson, 91 Phil 524 (1952)
Issue: whether a probated foreign will may be reprobated in
the Ph
Held: Yes, the foreign will may be reprobated in the PH. Wills
proved and allowed in a foreign country, according to the
laws of such country, may be allowed, filed, and recorded by
the proper CFI in the PH.
Miciano vs. Brimo, 50 Phil 867 (1927)
Although the disposition provides an express provision that it
shall be governed by Philippine Laws and those who opposed
the condition of the provisions given shall be cancelled from
the disposition, the fact is that the condition itself is void for
being contrary to law. Article 792 of the Civil Code provides:
“Impossible conditions and those contrary to law or good
morals shall be considered as not imposed and shall not
prejudice the heir or legatee in any manner whatsoever, even
should the testator otherwise provide.”
It is contrary to law because it expressly ignores the
decedent’s national law, according to Article 10 of the Civil
Code, such national law shall govern his testamentary
dispositions.
Bohanan vs. Bohanan 106 Phil 997 (1960)
The old Civil Code, which is applicable to this case because
the testator died in 1944, expressly provides that
successional rights to personal property are to be earned by
the national law of the person whose succession is in
question.
The laws of Nevada, of which the deceased was a citizen,
allow him to dispose of all of his properties without requiring
him to leave any portion of his estate to his wife.
VII. Choice of Law in Torts and Crimes
A. Torts as a source of obligation
- an act or omission producing an injury to another without
any pre-existing lawful relation of which the act or omission
may be said to be a natural outgrowth or incident.
-Art 2176 CC: whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done”.
The elements of a quasi delict are:
(a) damages suffered by the plaintiff
(b) fault or negligence of the defendant
(c) the connection of cause and effect between the fault or
negligence of the defendant and the damages inflicted on the
plaintiff
(d) there is no pre existing contractual relation between the
parties
B. Concept of negligence
-Negligence consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with
the circumstances of the persons, of the time and of the
place.
- the standard employed is the ordinary prudent man:
conduct is said to be negligent when a prudent man in the
position of the tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to warrant his
foregoing conduct or guarding against its consequences
C. Conflict of laws in Torts
-arise when a foreign element is involved
-plaintiff is a resident of one state, defendant of another
state, or both may be resident of one state, or the place of
injury could be another state.
-differing approaches in resolving torts cases: some states
employ the law of the place of injury while others employ the
law of the state with the most significant relationship to the
case.
D. Approaches to conflicts torts
1. lex loci delicti or vested rights doctrine- law of the place of
injury
2. governmental interest analysis approach- a three-tiered
approach that involves an examination of whether there is a
difference in the law of the jurisdictions involved, whether
there is a true conflict of law, and if a true conflict exists, the
court will apply the law of the state whose interest is more
impaired.
3. choice-influencing considerations approach- five factors
are:1) predictability of result; 2) maintenance of the
interstate and international order; 3) simplification of the
judicial task; 4) advancement of the forum’s governmental
interest; and 5) application of the better rule of law.
4. lex fori- rights and liabilities of the parties are governed by
the law of the forum
5. most significant relationship approach- the applicable law
shall be the law of the country which has the most significant
relationship to the situation. In determining the state which
has the most significant relationship, the following factors are
to be taken into account:
a. place where the injury occurred
b. place of conduct causing the injury
c. domicile, residence, nationality place of incorporation and
place of business
d. place where relationship between the parties is centered
E. Policies behind conflicts tort law
-to deter socially undesirable or wrongful conduct
-rectify the consequences of the tortious act by distributing
the losses that result from accident and products liability.
F. Lex Loci Delicti Commissi
- law of the place where the alleged tort was committed
which determines the tort liability in matters affecting
conduct and safety.
G. Modern Theories of foreign tort liability
1. Theory of Most Significant Relationship – the applicable
law shall be the law of the country which has the most
significant relationship to the situation. In determining the
state which has the most significant relationship, the
following factors are to be taken into account:
a. place where the injury occurred
b. place of conduct causing the injury
c. domicile, residence, nationality place of incorporation and
place of business
d. place where relationship between the parties is centered
(Saudi Arabian Airlines v. CA, 297 SCRA 469)
2.State-Interest Analysis – this principle provides for the
following methodology:
a.determine false or spurious conflicts (i.e., internal laws of
the different states have the same result or when only one
state has an interest in applying its tort law.
b.if there is true conflict:
1.if interested forum – apply the law of such State which has
greater interest in upholding its tort law;
2.if disinterested forum – dismiss on the ground of non forum
conveniens
3.Caver’s Principle of Preference – guideline on which rules
on torts may be applied by states in absence of statutory
provision
a.where the state of injury provides for higher standard of
conduct or financial protection against injury than the state
where the tortuous act was done, the law of the former shall
govern;
b.where the state of injury and conduct provides for lowed
standard and financial protection that the home state of the
person suffering the injury, the law of the state of conduct
and injury shall govern;
c.where the state in which the defendant has acted has
established special controls over conduct of the kind in which
defendant was engaged, the special controls and benefits
must he applied although the state has no relationship to the
defendant;
d.where the law in which the relationship has its seat
imposed higher standard of conduct or financial protection
than the law of the state of the injury, the former law shall
govern.
H. Foreign Tort Claims
- A tortious liability is transitory which means that the liability
resulting from the conduct is deemed personal to the
perpetrator of the wrong following him wherever he may go.
ERGO, an action for tort may be brought wherever the
tortfeasor is subject to suit.
1. Conditions for the Enforcement of Tort Claims
a) Foreign tort is based on civil action;
b) Not contrary to the public policy of the forum;
c) The judicial machinery of the forum is adequate
to satisfy the claim.
2. Products Liability of Foreign Manufacturer
If a person purchased a foreign-made product that is
fungible or non-fungible then he ingests or uses the
product in an unaltered way and in accordance with the
manufacturer’s instruction and suffers injury, he may
bring a product’s liability action against the manufacturer
in his home state.
3. The Alien Tort Act
4. Philippine Rule on Foreign Torts
- ENGLISH rule may be followed such that the tort committed
abroad is actionable in country where it was committed and
also under Ph law. Under this rule, there will be no problem
of choice of law because PH law on torts will be applied
wherever the suit is brought.
I. Torts vs. Crimes
-TORT is transitory in character and as such, liability is
deemed personal to the tortfeasor and makes him amenable
to suit in whatever jurisdiction he is found while CRIME is
local in that the perpetrator of the wrong can be sued only in
the state wherein he commits the crime
-TORT is an injury to an individual who may be situated in
any place, while a CRIME is an injury to the state where it is
committed
-TORTS law assign liability to the perpetrators in order to
indemnify the victim for injuries he sustained while PENAL
laws are promulgated to punish and reform the perpetrators
and deter them and others from violating the law
J. Lex Loci Delicti
GENERAL RULE: The essential elements of a crime and its
penalties are generally determined by the law of where the
crime was committed (locus regit actum)
EXCEPTIONS:
1. crimes committed by state officials, diplomatic
representatives and officials of recognized international
organizations (base on the theory of state immunity from
suits)
2. crimes committed on board a foreign vessel even if within
the territorial waters of the coastal state, as long as the
effect of such crime does no affect the peace and order of the
coastal state;
3. crimes which, although committed by Philippine nationals
aboard are punishable under the local law pursuant to the
protective principle of criminal jurisdiction (Article 2 of the
RPC)
THEORIES TO WHAT COURT HAS JURISDICTION
1. Territoriality theory – where the crime was committed
2. Nationality theory – country which the criminal is a citizen
or a subject
3. Real Theory – any state whose penal code has been
violated has jurisdiction, where the crime was committed
inside or outside its territory;
4. Protective theory – any state whose national interests
may be jeopardized has jurisdiction so that it may protect
itself;
5. Cosmopolitan or university theory – state where the
criminal is found or which has his custody has jurisdiction;
6. Passive personality theory – the state of which the victim
is a citizen or subject has jurisdiction
NOTE : In the Philippines, we follow the territoriality theory
in general. Hence, our penal laws apply only to crimes
committed within the country.
EXCEPTION: Article 2 of RPC, stresses the protective theory
a. Offense committed while in a Philippine vessel or airship
b. Forging or Counterfeiting any coin currency note of the
Philippines, or any obligation issued by the government;
c. Introduction into the country of the abovementioned
obligations and securities;
d. While being public officers and employees, any offense
committed in the exercise of their functions;
e. Crimes against national security and the law of the
nations as defined in Title 1 Book 1 of the RPC.
CRIMES COMMITED ABOARD PRIVATE OR MERCHANT
VESSELS
1. if the crime committed aboard a private or merchant
vessel occurred on the high seas, the country of the flag of
the vessel has jurisdiction. Thus, if the vessel carries the
French flag, Philippine courts have no jurisdiction except,
those provided in Article 2 of RPC.
2. If the crime aboard a private or merchant vessel of a
foreign state took place inside Philippine territorial waters –
two theories have generally been used to determine the
question of jurisdiction: the English rule (which emphasizes
the territorial principle) and the French rule (which stresses
the nationality theory).
a. The English Rule – here the territory where the crime was
committed (Philippines) will have jurisdiction except:
 in matters relating to the internal order and
discipline in the vessel and
 those which affect solely the ship and its occupants
such as minor or petty criminal offenses committed
by members of the crew.
b. The French Rule – under this rule, founded on the opinion
of the French Council of State in 1806, the state whose flag is
flown by the vessel, would have jurisdiction except if the
crime affects the peace, order, security and safety of the
territory.
Dowis, et al. vs. Mud Slingers
It is well-settled that Georgia will continue to adhere to a
traditional conflict of laws rule until a better approach is
found.
Melton vs Stephens
Issue: Whether the trial court properly held that Illinois
substantive law is applicable to a collision which occurred in
Illinois between two Indiana residents after considering the
choice of law factors delineated in Hubbard
Held: the place of the tort has extensive connection with the
legal action, and thus, the doctrine of lex loci delicti retains
its vitality. We hold that the trial court correctly applied the
Hubbard test and concluded that Illinois substantive law
governs the action.
Saudi Arabian Airlines vs. Court of Appeals
Issues:
(1)Whether or not Philippine law shall govern this case
(2)Whether or not Philippine court has jurisdiction to try the
case.

Held:
(1)Yes, because Philippines is the situs of the tort complained
of and the place having the mist interest in the problem. It is
in the Philippines where the petitioner allegedly deceived
private respondent, a Filipina residing and working here.
Under the State of the Most Significant Relationship Rules,
the following contacts are to be taken into account:
a. Place where the injury occured
b. Place where the conduct causing the injury occurred
c. Domicile, residence, nationality, place of incorporation
and place of business of the parties
d. Place where the relationship if any between the parties is
centered.
(2) Yes. Where the action is one involving torts, the
connecting poin of contract could be the place where tortious
conduct occurred. The RTC of Quezon City possesses
jurisdiction over the subject matter of the suit. A party whose
cause of action is based on a Philippine law particularly Arts.
19 & 21 has no obligation to plead and prove the law of
another State.
First National Bank vs Rostek
Both the guest-passenger and the host-pilot were domiciled
and residing in Colorado, and the airplane was registered in
Colorado. Thus, the facts in this case are governed by the
first statement of the rule. Under this statement, the rights
and liabilities of the parties are governed by the law of the
place of domicile which in this case is Colorado. Accordingly,
South Dakota law, including its Airplane Guest Statute, is not
the appropriate law to apply under this new rule.
Kamelgard vs Macura, 585 F. 3d 334 ( 2009)
But only New Jersey, where the plaintiff has his practice and
is therefore likely to suffer tangible harm from defamation
that impugns his professional integrity and competence, even
if the defamation is not published there, has a substantial
interest in protecting him from defamation; and it is
therefore New Jersey law that should apply.
Lankenau vs Boles, 199 A.D. 1404 (2014)
We further conclude that Pennsylvania has at best a minimal
interest in applying its own law in this case. The plaintiff and
her defendant parents are residents of New York, where the
seat belt defense is available. The other defendants are
domiciled in New Jersey, which also permits the seat belt
defense. None of the parties is domiciled in Pennsylvania and,
the situs of the tort notwithstanding, we perceive no basis for
applying Pennsylvania law to deny a potential affirmative
defense.
Winter vs Novartis, 739 F. 3d 405 (8th Cir 2014)
Future Select vs. Tremont Group, 331 P 3d. 29 (Wash
2014)
VIII. Choice of Law Affecting Corporations
A. Conflict problems of corporations
- Conflict of laws with respect to corps generally deals with
laws governing their administration, incorporation,
nationality, and domicile.
B. Personal law of a corporation
-The personal law of a corporation is the law of the State
where it is incorporated. Since a corporation is an artificial
being created by law, it possesses only the rights and powers
conferred upon in its charter. Hence, if the law creating the
corporation does not give authority to enter into certain
contracts, such contracts made by it in another state shall be
void despite the express permission given by the laws of that
other state.
Matters where the personal law of the corporation
governs:
1. Requisites for formation of the corporation and its legal
character
2. Capacity and powers of the corporation; note: however
two requisites should be asked in determining the legal effect
of an act of a corporation: (a) is the corporation authorized
by its charter to do the particular act? (b) is this act
permitted by the law of the place where the act is done
3. Kinds of stocks allowed and transfer of stocks in a way
that would be binding on the corporation
4. Issuance, amount and legality of dividends
5. The internal organization of the corporate enterprise, the
rights and liabilities of shareholders, members, directors,
officers, their relation inter se and stockholders’ participation
in the management and in the profits
6. Alteration or modification of the charter and the
dissolution of the corporation
C. Incorporation test; exceptions
1. Constitutional and statutory restrictions
A state, if it sees fit, may by legislation exclude a foreign
corporation altogether, subject to constitutional limitations or
prescribe any conditions it may see fit as prerequisite to the
corporation’s right to do business within its territory.
2. Control test during war
In wartime, the courts may pierce the veil of corporate
identity and look into the nationality of the controlling
stockholders to determine the “citizenship” of the corporation
D. Domicile or residence foreign corporations
A foreign corporation that has been granted license to
operate in the Philippines acquires domicile in the Philippines.
The object of the Corporation Code in requiring a foreign
corporation to secure a license to transact business in the
Philippines is to prevent it from acquiring a domicile for the
purpose of business without taking steps necessary to render
it amenable to suit in the local courts.
E. Nationality of corporations
-The nationality of a private corporation is determined by the
character or citizenship of its controlling stockholders.
-The domicile of a domestic corporation is its principal place
of business (contained in the AOI). For foreign corporations,
their domicile is in the country under whose laws they are
incorporated.
F. Test of corporate nationality
a) Control Test- a corporation that is at least 60% Filipino-
owned is considered a Filipino for purposes of determining
the Filipino ownership of a corporation whose nationality
is put in issue
b) Grandfather rule- governs the strict application of the
ownership of a corporation (generally 60% Filipino-
owned)
G. Jurisdiction over foreign corporations
The prevailing rule is that with the consent of a state, a
foreign corporation shall be recognized and will be allowed to
transact business in any state which gives its consent.
Art. 29 of the Corporation Code mandates that all foreign
corporations lawfully doing business in the Philippines shall
be bound by all laws, rules and regulations applicable to
domestic corporations.
Service upon foreign corporations doing business in the
Philippines may be made on:
1. Its resident agent
2. In the absence thereof, process will be served on the
government official designated by law or any of its officers or
agent within the Philippines
3. On any officer or agent of said corporation in the
Philippines
4. Serving summons through diplomatic channels
H. Right of foreign corporations to sue
The right of a private corporation to bring suit in the forum
and its amenability to court processes and suits against it,
are governed by the lex fori. From the theoretical viewpoint,
the country like ours may completely prohibit a foreign
corporation from transacting business in the Philippines; we
may even prohibit it from filing suit here.
Acquisition by a foreign corporation of a license to transact
business in the Philippines is an essential prerequisite for
filing a suit of the corporation before our courts. This rule is
embodied in Article 133 of the Corporation Code which says
that “such corporation may be sued or proceeded against
before Philippine courts or administrative tribunals on any
valid cause of action recognized under Philippine laws.
I. License requirements, exceptions
1. Isolated transactions
An isolated business is one which is occasional, incidental
and casual not of a character to indicate a purpose to
engage in business. A business is isolated if there is no
continuity of conduct and intention on the part of the
foreign corporation to establish a continuous business
within the state.
2. Action to protect trademark, tradename, goodwill, patent
or unfair competition
A foreign corporation engaging in business without a
license may file a complaint for unfair competition since
that is essentially a suit enjoining the unfair trader from
pursuing the unlawful competition and in order to allow
the aggrieved party to recover damages. This rule is
based on equity considerations.
3. Agreements to fully transact outside of the Philippines
A foreign corporation is allowed to maintain an action on a
transaction wholly celebrated and consummated abroad.
The vital policy of stabilizing commercial transactions will
be greatly jeopardized if our laws deprived foreign
corporations of this privilege.
4. Corollary defensive suits
A foreign corporation is not maintaining a suit in our
courts but is merely defending itself when it files a
complaint for the sole purpose of preventing the lower
court from exercising jurisdiction over the case. As such,
a foreign corporation is not required to allege and prove
that it has capacity to sue.
J. Scope of ‘transacting business’
Foreign Investment Act: the phrase “doing business” shall
include soliciting orders, service contracts, opening offices,
whether called “liaison” offices or branches; appointing
representatives or distributors domiciled in the Philippines or
who in any calendar year stay in the country for a period or
periods totaling one hundred eighty (180) days or more;
participating in the management, supervision or control of
any domestic business, firm, entity or corporation in the
Philippines; and any other act or acts that imply a continuity
of commercial dealings or arrangements, and contemplate to
that extent the performance of acts or works, or the exercise
of some of the functions normally incident to, and in
progressive prosecution of, commercial gain or of the
purpose and object of the business organization: Provided,
however, That the phrase “doing business” shall not be
deemed to include mere investment as a shareholder by a
foreign entity in domestic corporations duly registered to do
business, and/or the exercise of rights as such investor; nor
having a nominee director or officer to represent its interests
in such corporation; nor appointing a representative or
distributor domiciled in the Philippines which transacts
business in its own name and for its own account.
K. Special corporations
1. Religious Societies and Corporation Sole
A religious society which is a corporate aggregate. A
corporation Sole is an incorporated office composed of
only one person. Art. 110 of the Corporation Code states
“The chief archbishop, bishop, priest, minister, or other
presiding elder of a religious sect may form a corporation
sole for the purpose of managing its affairs, property and
temporalities“
2. Transnational Corporations
Transnational corporations are clusters of several
corporations, each with a separate entity, existing and
spread out in several countries but controlled by the
headquarters in a developed state where it was originally
organized.
The personal law of the transnational corporation is
that of the host country, the major decisions regarding its
operation and management come from the parent
corporation in the industrialized state.
The main characteristic of a transnational is that all
the locally incorporated branches are joined together by
the common control and management of higher officials
in the home state.
These activities of the subsidiary in the state will provide
a basis for jurisdiction over the parent if these activities:
• Provide a basis for jurisdiction over the subsidiary
• Can be said to have been done in the course for the
parent corporation or on its behalf
L. Partnerships
Formed by two or more persos who bind themselves to
contribute money, property, or industry to a common fund
with the intention of dividing the profits among themselves.
The existence or non-existence of the legal or juridical
personality of the partnership, the capacity of the firm to
contract and the liability of the firm and partners to third
persons are all governed by the personal law of the
partnership – this is the law of the place where it was
created.
Philippine internal law provides that if the domicile of
the partnership is not identified by the law creating it, it is
deemed domiciled in the place where its legal representation
is established or where it exercises its principal functions.
M. One man corporation
Under the new law, individuals can register their business
with only one incorporator, a decrease from the previous law
requiring at least five shareholders.
Cargill vs. Intra Strata Assurance Corp
Cargill, a foreign corporation, bought several metric tons of
molasses from NMC, a domestic corp (w/c acquired the
services of Intra Strata as surety). NMC failed to deliver the
agreed upon amount and so Cargill went after Intra Strata for
its claims. Intra Strata interposed the defense that Cargill
cannot file an action in the PH because it is a foreign
corporation doing business here w/out a license (per Sec.
133, Corp Code). The SC found that Cargill isn’t actually
doing business here, thus, it doesn’t fall under the prohibition
of Sec. 133. This means that Cargill, albeit a foreign
corporation (w/out a license to do business in the PH) can file
an action against Intra Strata for NMC’s breach of contract.
Doctrine: Under Article 123 of the Corporation Code, a
foreign corporation must first obtain a license and a
certificate from the appropriate government agency before it
can transact business in the Philippines. Where a foreign
corporation does business in the Philippines without the
proper license, it cannot maintain any action or proceeding
before Philippine courts as provided under Section 133 of the
Corporation Code
Steelcase vs. Design International
Steelcase is an unlicensed foreign corporation not doing
business in the Philippines
According to the Supreme Court, the following acts shall not
be deemed "doing business" in the Philippines: (a) mere
investment as a shareholder by a foreign entity in domestic
corporations duly registered to do business, and/or the
exercise of rights as such investor; (b) having a nominee
director or officer to represent its interest in such
corporation; (c) appointing a representative or distributor
domiciled in the Philippines which transacts business in the
representative's or distributor's own name and account; (d)
the publication of a general advertisement through any print
or broadcast media; (e) maintaining a stock of goods in the
Philippines solely for the purpose of having the same
processed by another entity in the Philippines; (f)
consignment by a foreign entity of equipment with a local
company to be used in the processing of products for export;
(g) collecting information in the Philippines; and (h)
performing services auxiliary to an existing isolated contract
of sale which are not on a continuing basis, such as installing
in the Philippines machinery it has manufactured or exported
to the Philippines, servicing the same, training domestic
workers to operate it, and similar incidental services.
Based on this list, the Supreme Court said that the
appointment of a distributor in the Philippines is not sufficient
to constitute "doing business" unless it is under the full
control of the foreign corporation. If the distributor is an
independent entity which buys and distributes products,
other than those of the foreign corporation, for its own name
and its own account, the latter cannot be considered to be
doing business in the Philippines.
State Investment House vs. Citibank
Facts:
Consolidated Mines, Inc. (CMI) obtained loans from Citibank,
Bank of America and HSBC, all foreign corporations but with
branches in the Philippines. Meanwhile, State Investment
House, Inc. (SIHI) and State Financing Center, Inc. (SFCI),
also creditors of CMI, filed collection suits against the latter
with writs of preliminary attachment. Subsequently, the three
banks jointly filed with the court a petition for involuntary
insolvency of CMI. SHI and SFCI opposed the petition on the
ground that the petitioners are not resident creditors in
contemplation of the Insolvency Law.
Issue: Whether or not a foreign corporation with a branch in
the Philippines and doing business therein can be considered
a resident
Held:
Foreign corporations duly licensed to do business in the
Philippines are considered “residents” of the Philippines, as
the word is understood in Sec. 20 of the Insolvency Law,
authorizing at least three resident creditors of the Philippines
to file a petition to declare a corporation insolvent. The Tax
Code declares that the term “resident foreign corporation
applies to foreign corporation engaged in trade or business
within the Philippines” as distinguished from a “non-resident
foreign corporation” which is not engaged in trade or
business within the Philippines. The Offshore Banking Law
sates that: “Branches, subsidiaries, affiliates, extension
offices or any other units of corporation or juridical person
organized under the laws of any foreign country operating in
the Philippines shall be considered residents of the
Philippines.” The General Banking Act places “branches and
agencies in the Philippines of foreign banks” in the category
as commercial banks, rural banks, stock savings and loan
association making no distinction between the former ad the
latter in so far as the terms “banking institutions” and
“banks” are used in said Act.
Rogers vs. Guaranty Trust Co., 288 US 123 (1932)
Western Air Lines vs. Sobleski, 191 Cal App. 2d. 399
(1961)
Mansfield Hardwood Lumber vs. Johnson, 268 F. 2d
317, 5th Cir 1959)
Hyatt Elevators vs. Goldstar Elevators
Jurisprudence has, however, settled that the place where the
principal office of a corporation is located, as stated in the
articles, indeed establishes its residence. This ruling is
important in determining the venue of an action by or against
a corporation.
Clavecilla Radio Systems vs. Antillon
The suit for damages filed with the city court is based upon
tort and not upon a written contract. Section 1 of Rule 4 of
the New Rules of Court, governing venue of actions in inferior
courts, provides in its paragraph (b)(3) that when "the action
is not upon a written contract, then in the municipality where
the defendant or any of the defendants resides or may be
served with summons." Settled is the principle in corporation
law that the residence of a corporation is the place where its
principal office is established. Since it is not disputed that the
Clavecilla Radio System has its principal office in Manila, it
follows that the suit against it may properly be filed in the
City of Manila.
Tayag vs. Benguet Consolidated
Ph courts have power and authority over shares of stock held
by a domicilliary administrator. (repeated)
Narra Nickel Mining vs. Redmont Consolidated Mines
Facts:
Redmont Consolidated Mines, Inc. (Redmont) filed before the
Panel of Arbitrators (POA) of the DENR separate petitions for
denial of McArthur Mining, Inc. (McArthur), Tesoro and Mining
and Development, Inc. (Tesoro), and Narra Nickel Mining and
Development Corporation (Narra) applications Mineral
Production Sharing Agreement (MPSA) on the ground that
they are not “qualified persons” and thus disqualified from
engaging in mining activities through MPSAs reserved only
for Filipino citizens.
McArthur Mining, Inc., is composed, among others, by
Madridejos Mining Corporation (Filipino) owning 5,997 out of
10,000 shares, and MBMI Resources, Inc. (Canadian) owning
3,998 out of 10,000 shares; MBMI also owns 3,331 out of
10,000 shares of Madridejos Mining Corporation;
Tesoro and Mining and Development, Inc., is composed,
among others, by Sara Marie Mining, Inc. (Filipino) owning
5,997 out of 10,000 shares, and MBMI Resources, Inc.
(Canadian) owning 3,998 out of 10,000 shares; MBMI also
owns 3,331 out of 10,000 shares of Sara Marie Mining, Inc.;
Narra Nickel Mining and Development Corporation, is
composed, among others, by Patricia Louise Mining &
Development Corporation (Filipino) owning 5,997 out of
10,000 shares, and MBMI Resources, Inc. (Canadian) owning
3,998 out of 10,000 shares; MBMI also owns 3,396 out of
10,000 shares of Patricia Louise Mining & Development
Corporation;
Issues:
(1) Is the Grandfather Rule applicable?
(2) Whether McArthur, Tesoro and Narra are Filipino
nationals.
RULINGS
(1) YES.
The instant case presents a situation which exhibits a scheme
employed by stockholders to circumvent the law, creating a
cloud of doubt in the Court’s mind. To determine, therefore,
the actual participation, direct or indirect, of MBMI, the
grandfather rule must be used.
The Strict Rule or the Grandfather Rule pertains to the
portion in Paragraph 7 of the 1967 SEC Rules which states,
“but if the percentage of Filipino ownership in the corporation
or partnership is less than 60%, only the number of shares
corresponding to such percentage shall be counted as of
Philippine nationality.” Under the Strict Rule or Grandfather
Rule Proper, the combined totals in the Investing Corporation
and the Investee Corporation must be traced (i.e.,
“grandfathered”) to determine the total percentage of Filipino
ownership.

(2) NO.
[P]etitioners McArthur, Tesoro and Narra are not Filipino
since MBMI, a 100% Canadian corporation, owns 60% or
more of their equity interests. Such conclusion is derived
from grandfathering petitioners’ corporate owners. xxx
Noticeably, the ownership of the “layered” corporations boils
down to xxx group wherein MBMI has joint venture
agreements with, practically exercising majority control over
the corporations mentioned. In effect, whether looking at the
capital structure or the underlying relationships between and
among the corporations, petitioners are NOT Filipino
nationals and must be considered foreign since 60% or more
of their capital stocks or equity interests are owned by MBMI.
Gamboa vs. Teves
Facts:
On 28 February 2007, petitioner filed the instant petition for
prohibition, injunction, declaratory relief, and declaration of
nullity of sale of the 111,415 PTIC shares. Petitioner claims,
among others, that the sale of the 111,415 PTIC shares
would result in an increase in First Pacific's common
shareholdings in PLDT from 30.7 percent to 37 percent, and
this, combined with Japanese NTT DoCoMo's common
shareholdings in PLDT, would result to a total foreign
common shareholdings in PLDT of 51.56 percent which is
over the 40 percent constitutional limit. Petitioner asserts:
If and when the sale is completed, First Pacific's equity in
PLDT will go up from 30.7 percent to 37.0 percent of its
common - or voting- stockholdings, x x x. Hence, the
consummation of the sale will put the two largest foreign
investors in PLDT - First Pacific and Japan's NTT DoCoMo,
which is the world's largest wireless telecommunications firm,
owning 51.56 percent of PLDT common equity. x x x With the
completion of the sale, data culled from the official website of
the New York Stock Exchange (www.nyse.com) showed that
those foreign entities, which own at least five percent of
common equity, will collectively own 81.47 percent of PLDT's
common equity. x x x
x x x as the annual disclosure reports, also referred to as
Form 20-K reports x x x which PLDT submitted to the New
York Stock Exchange for the period 2003-2005, revealed that
First Pacific and several other foreign entities breached the
constitutional limit of 40 percent ownership as early as 2003.
x x x"
Issue: Whether the sale of common shares to foreigners in
excess of 40 percent of the entire subscribed common capital
stock violates the constitutional limit on foreign ownership of
a public utility
Held:
Yes. The term "capital" in Section 11, Article XII of the
Constitution refers only to shares of stock that can vote in
the election of directors.
Mere legal title is insufficient to meet the 60 percent Filipino-
owned "capital" required in the Constitution. Full beneficial
ownership of 60 percent of the outstanding capital stock,
coupled with 60 percent of the voting rights, is required. The
legal and beneficial ownership of 60 percent of the
outstanding capital stock must rest in the hands of Filipino
nationals in accordance with the constitutional mandate.
Otherwise, the corporation is "considered as non-Philippine
national[s]."
Filipinos hold less than 60 percent of the voting stock, and
earn less than 60 percent of the dividends, of PLDT. This
directly contravenes the express command in Section 11,
Article XII of the Constitution that "[n]o franchise, certificate,
or any other form of authorization for the operation of a
public utility shall be granted except to x x x corporations x x
x organized under the laws of the Philippines, at least sixty
per centum of whose capital is owned by such citizens
X. Foreign Judgements
A. Recognition of foreign judgements
Foreign judgment refers to all decisions rendered outside the
forum and encompasses judgments, decrees and orders of
courts of foreign countries as well as those of sister states in
a federal system of government.
A foreign judgment does not itself have any extra-territorial
application. Thus, it may ordinarily be enforced only within
the territory of the tribunal issuing it. For a foreign judgment
to be effective in our country, it is imperative that it be
proved in accordance with our prescribed rules on the matter.
B. Recognition vs enforcement
RECOGNITION ENFORCEMENT
OF FOREIGN JUDGMENT OF FOREIGN JUDGMENT
Passive act of giving effect An active act that requires
to a judgment of forum 1 the filing of an action in
without necessarily filing court.
an action in forum 2.
Courts will allow the Plaintiff wants courts to
foreign judgment to be positively carry out and
presented as a defense to make effective in the state a
a local litigation foreign judgment
Involves merely the sense Virtually implies a direct act
of justice of sovereignty
Does not require either an Necessitates a separate
action of a special action or proceeding brought
proceeding precisely to make the
foreign judgment effective
May exist without Necessarily carries with it
enforcement recognition
Reasons why not all foreign judgments can be recognized or
enforced in our country:
1. The requisite proof thereof may not be adequate
2. They may contravene our established public policies
3. They may contradict one another: obviously, we cannot
be guided by contradictions
4. In some other countries the administration of justice may
be shockingly corrupt
C. Bases of recognition and enforcement of foreign
judgement
a) Theory of Comity – under this theory, we apply the
foreign law because of its convenience and finally because we
want to give protection to our citizens, residents, and
transients in our land.
b) Theory of Vested Rights or Obligation of Foreign
Judgments – here we seek to enforce the final judgment not
the foreign law itself but the rights that have been vested
under such foreign law.
c) Theory of Local Law – foreign law is applied not because it
is foreign but because our own laws, by applying similar
rules, require us to do so, hence, it is as if the foreign law
has become part and parcel of our own local law.
d) Theory of Harmony of Laws – this theory insist that in
many cases we have to apply foreign laws so that wherever a
case is decided, that is, irrespective of the forum, the
solution should be approximately the same, thus identical or
similar solutions anywhere and everywhere. When the goal is
realized there will be a “harmony of laws”
e) Theory of Justice – the purpose of all laws, including
Conflict of Laws, is the dispensing of justice, if this can be
attained in many cases by applying the proper foreign law,
we must do so.
Defects of Theory of Comity:
1. Theory presupposes the existence of an international
duty. There is no such duty. Theoretically, every state may
apply its own internal law exclusively.
2. The theory assumes, although in a minimal sense, a
desire to show courtesy to other states. This is not true. The
real reason for the application of proper foreign law id the
avoidance of “gross inconvenience and injustice to litigants”,
whether natives or foreigners. According to Prof. Minor, the
basis of COL is something more than comity to the litigants.
It is an answer to the demands of justice and enlightened
policy.
3. Theory apparently leaves the application of the foreign
law to the discretion of the forum. Clearly, this will prevent
the adoption of definite rules and principles for COL.
Kinds of Comity:
1. Comity based on reciprocity – is simple. If the laws and
judgments of the forum are recognized in a foreign state, the
forum in turn will recognize the laws and judgments
emanating from said foreign state.
2. Comity based on persuasiveness of the foreign judgment
– it says that if the forum is persuaded that a foreign
judgment is meritorious and has been rendered by a court of
competent jurisdiction, it will not hesitate to enforce that
foreign judgment in the forum even if the foreign forum does
not reciprocate
Collateral Matters:
The following collateral matters must first be examined
before proper foreign law is to be applied:
1. Nature and Proof of foreign judgments
2. Nature and composition of conflicts rules
3. Characterization or classification of conflict rules and
judgments
4. Various theories on status and capacity
5. Problem of the renvoi
D. Policies on recognition of foreign judgement
1) Res Judicata – under this principle those who have
contested an issue shall be bound by the result of the contest
and that matters once tried and decided with finality in one
jurisdiction shall be considered settled as between the
parties.
2) Bar and Merger
Merger – considers the plaintiff’s cause of action as merged
in the judgment and as a result he may not relitigate that
exact claim.
Bar – refers to a situation where a successful defendant
interposes the judgment in his favour to avert a second
action by the plaintiff on the same claim.
3) Doctrine of Collateral estoppel – renders conclusive all
essential issues of fact actually litigated in the suit decided on
by the foreign court.
Whereas res judicata seeks to end litigation by disallowing a
suit on the same claim; collateral estoppels is concerned with
the issue preclusion by barring relitigation of an issue already
litigated on a prior proceeding.
E. Requisites for recognition or enforcement of foreign
judgements
1. There must be proof of the foreign judgment; for the
recognition, there is no necessity for a separate action or
proceeding
2. The judgment must be on a civil or commercial matter
3. There must be no lack of jurisdiction, no want of notice,
no collusion, no fraud, no clear mistake of law or fact
Note:
a.Fraud here must be Extrinsic fraud – that is fraud based
on facts not controverted or resolved in the case where the
judgment was rendered
b.Regarding clear mistake of law or fact, the supreme
court of the U.S. reversing the SC of the Phils., held that
even if there is a clear mistake of law or fact, this alone will
not prevent the recognition or enforcement of a foreign court
(Hongkong) judgment which otherwise fulfils all the other
requisites.
4. The judgment must not contravene a sound established
policy of the forum.
Note:
a. An unfaithful mother, awarded by a US court
custody of her child, was denied said custody by our
Philippine courts
b. A litigant not satisfied with the decision of a
Philippine court, resorted to a foreign court to obtain another
remedy. Failing in this foreign venture, he now seeks the
enforcement of the Philippine decision which he had formerly
abandoned.
HELD: The litigants, whether they are citizens or foreigners,
should respect the decisions of Philippine courts, but if they
choose to resort to a foreign court, asking for a remedy that
is incompatible with the execution of a decision obtained in
the Philippines and obtained a decision that is adverse, they
should not be permitted to repudiate the decision of the
foreign court and to ask the enforcement of the decision of
the Philippine court which they have abandoned. To permit
them to litigate in that manner is contrary to the order and
public interest of the Philippines because it disturbs the
orderly administration of justice.
5. The judgment must be res judicata in the state that
rendered it.
The requisites for res judicata are the following:
a. Judgment must be final
b. The court rendering the judgment must have jurisdiction
over the subject matter and the parties
c. The judgment must be on the merits
d. There must be identity of the parties, subject matter and
cause of action – except that the recognition or enforcement
of a foreign action is now the recognition or enforcement of
the foreign judgment on the original cause of action
Whose judgment is really enforced?
It would seem that when our courts enforce a foreign
judgment by allowing it, the effect is that it is really our own
court’s judgment that we enforce.
F. Effects of foreign judgment; res judicata
Sec. 48. Effect of foreign judgment – The effect of a
judgment of final order of a tribunal of a foreign country,
having jurisdiction to render the judgment or final order is as
follows:
a. In case of judgment or final order upon a specific thing,
the judgment or final order is conclusive upon the title of
the thing
b. In case of a judgment or final order against a person, the
judgment or final order is presumptive evidence of a right
as between the parties and their successors-in-interest by a
subsequent title.
In either case the judgment may be repelled by evidence of a
want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.
The party attacking a foreign judgment has the burden of
overcoming the presumption of its validity.
G. Grounds for non -recognition, repelled foreign judgments
A foreign judgment is not conclusive if:
1) The judgment was rendered under a system which does
not provide impartial tribunals or procedures compatible with
the requirements of due process of law
2) The foreign court did not have personal jurisdiction over
the defendant
3) The foreign court did not have jurisdiction over the
subject matter

A foreign judgment need not be recognized if:
1) The defendant in the proceedings in the foreign court did
not receive notice of the proceedings in sufficient time to
enable him to defend
2) The judgment was obtained by fraud
3) The cause of action or claim for relief on which the
judgment is based is repugnant to the public policy of this
state
4) The foreign judgment conflicts with another final and
conclusive judgment
5) The proceeding in the foreign court was contrary to an
agreement between the parties under which the dispute in
question settled otherwise than the proceeding in that court
6) In the case of jurisdiction based only on personal service,
the foreign court was a seriously inconvenient forum for the
trial of the action (forum non-conveniens)
H. Proof of foreign law
Sec 24, Rule 132 ROC:
Foreign laws and public documents may be proved by either:
a) official publication
b) copy of the public document attested by the officer having
the legal custody of the record, or by his deputy, 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 country, the certificate
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 foreign service of the Philippines stationed
in the foreign country in which the record is kept, and
authenticated by the seal of his office.
I. Modern developments
J. Procedures for enforcement of foreign judgements
1. A petition should be filed in the proper court attaching an
authenticated copy of the foreign judgment to be enforced
Authentication calls for the Philippine consul assigned to
the country where the foreign judgment was decreed to
certify that had been rendered by a court of competent
jurisdiction
2. The petition must comply with all the requisites of an
enforceable judgment
3. A requirement to file action anew has been considered as
“an attempt to reconcile the principle of territorial jurisdiction
of courts which demands that the enforcement of judgment
outside the territory of the rendering court must be placed
upon some other basis than the authority of the rendering
court which ceased at its jurisdictional limits – and the
principle of res judicata.
Fujiki vs Marinay
Facts:
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who
married respondent Maria Paz Galela Marinay (Marinay) in
the Philippines on 23 January 2004. The marriage did not sit
well with petitioner’s parents. Thus, Fujiki could not bring his
wife to Japan where he resides. Eventually, they lost contact
with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara
(Maekara). Without the first marriage being dissolved,
Marinay and Maekara were married on 15 May 2008 in
Quezon City, Philippines. Maekara brought Marinay to Japan.
However, Marinay allegedly suffered physical abuse from
Maekara. She left Maekara and started to contact Fujiki.
Fujiki and Marinay met in Japan and they were able to
reestablish their relationship. In 2010, Fujiki helped Marinay
obtain a judgment from a family court in Japan which
declared the marriage between Marinay and Maekara void on
the ground of bigamy. On 14 January 2011, Fujiki filed a
petition in the RTC entitled: “Judicial Recognition of Foreign
Judgment (or Decree of Absolute Nullity of Marriage).”
The decision of the lower courts (RTC): dismissed the petition
for "Judicial Recognition of Foreign Judgment ·(or Decree of
Absolute Nullity of Marriage)" based on improper venue and
the lack of personality of petitioner, Minoru Fujiki, to file the
petition.
Issues:
1. Whether the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages (A.M. No.
02-11-10-SC) is applicable.
2. Whether a husband or wife of a prior marriage can file a
petition to recognize a foreign judgment nullifying the
subsequent marriage between his or her spouse and a
foreign citizen on the ground of bigamy.
3. Whether the Regional Trial Court can recognize the foreign
judgment in a proceeding for cancellation or correction of
entries in the Civil Registry under Rule 108 of the Rules of
Court.
Held:
1. No. Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages (A.M. No.
02-11-10-SC) does not apply in a petition to recognize a
foreign judgment relating to the status of a marriage where
one of the parties is a citizen of a foreign country. Moreover,
in Juliano-Llave v. Republic, this Court held that the rule in
A.M. No. 02- 11-10-SC that only the husband or wife can file
a declaration of nullity or annulment of marriage “does not
apply if the reason behind the petition is bigamy.” While the
Philippines has no divorce law, the Japanese Family Court
judgment is fully consistent with Philippine public policy, as
bigamous marriages are declared void from the beginning
under Article 35(4) of the Family Code. Bigamy is a crime
under Article 349 of the Revised Penal Code. Thus, Fujiki can
prove the existence of the Japanese Family Court judgment
in accordance with Rule 132, Sections 24 and 25, in relation
to Rule 39, Section 48(b) of the Rules of Court.
2. Yes, the recognition of the foreign divorce decree may be
made in a Rule 108 proceeding itself, as the object of special
proceedings (such as that in Rule 108 of the Rules of Court)
is precisely to establish the status or right of a party or a
particular fact.”
Rule 108, Section 1 of the Rules of Court
states:
Sec. 1. Who may file petition. — Any person interested in any
act, event, order or decree concerning the civil status of
persons which has been recorded in the civil register, may
file a verified petition for the cancellation or correction of any
entry relating thereto, with the Regional Trial Court of the
province where the corresponding civil registry is located.
(Emphasis supplied)
There is no doubt that the prior spouse has a personal and
material interest in maintaining the integrity of the marriage
he contracted and the property relations arising from it.
3. Yes, there is neither circumvention of the substantive and
procedural safeguards of marriage under Philippine law, nor
of the jurisdiction of Family Courts under R.A. No. 8369. A
recognition of a foreign judgment is not an action to nullify a
marriage. It is an action for Philippine courts to recognize the
effectivity of a foreign judgment, which presupposes a case
which was already tried and decided under foreign law.
In the recognition of foreign judgments, Philippine courts are
incompetent to substitute their judgment on how a case was
decided under foreign law. They cannot decide on the “family
rights and duties, or on the status, condition and legal
capacity” of the foreign citizen who is a party to the foreign
judgment. Thus, Philippine courts are limited to the question
of whether to extend the effect of a foreign judgment in the
Philippines. In a foreign judgment relating to the status of a
marriage involving a citizen of a foreign country, Philippine
courts only decide whether to extend its effect to the Filipino
party, under the rule of lex nationalii expressed in Article 15
of the Civil Code.
For this purpose, Philippine courts will only determine (1)
whether the foreign judgment is inconsistent with an
overriding public policy in the Philippines; and (2) whether
any alleging party is able to prove an extrinsic ground to
repel the foreign judgment, i.e. want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of law
or fact. If there is neither inconsistency with public policy nor
adequate proof to repel the judgment, Philippine courts
should, by default, recognize the foreign judgment as part of
the comity of nations.
Roehr vs Rodriguez
Facts:
Petitioner Wolfgang, a German citizen and resident of
Germany, married private respondent Carmen, a Filipina, on
11 December 1980 in Hamburg, Gemany. Early 1981, the
marriage was ratified in Tayasan, Negros Oriental. They had
two daughters, Carolyne and Alexandria Kristine.
Private respondent filed a petition for the declaration of
nullity of marriage before the Regional Trial Court of Makati
on 28 August 1996. Petitioner filed a motion to dismiss but
was denied by trial court. A motion for reconsideration was
filed by private respondent but was again denied by the trial
court.
In 1997, petitioner obtained a decree of divorce from the
Court of First Instance of Hamburg-Blankenese and granting
the custody of the children to the father.
It was June 14, 1999 when public respondent (RTC judge)
issued an order granting the petitioner’s motion to dismiss,
but was partially set aside on September 1999 for the
purpose of tackling issues regarding property relations of the
spouses as well as support and custody of their children.
Petitioner assailed for the trial court’s lack of jurisdiction, and
grave abuse of discretion on the part of the respondent
judge.
Issue: WON RTC was correct in reopening the case to litigate
the issues of custody and distribution of assets despite the
divorce between the parties.
Yes. As a general rule, divorce decrees obtained by foreigners
in other countries are recognizable in our jurisdiction, but the
legal effects thereof, like the custody, care and support of the
children must still be determined by our courts. A foreign
judgment, such as the award of custody to Conrad by the
German Court can be recognized and be effective here only if
the other party involved in the judgment like Carmen in this
case, has been given ample opportunity to be heard. A
foreign judgment in cases of actions in personam (against a
person) as distinguished from actions in rem (upon a specific
thing) is only a presumptive evidence of a right as between
the parties and their successors in interest. It may be
rejected by evidence of a want of jurisdiction, want of notice
to a party, collusion, fraud, or clear mistake of law or fact
(Rule 39, Section 48, 1997 Rules of Civil Procedure).
St Aviation Services vs. Grand International Airways
FACTS :
Petitioner is a foreign corporation based in Singapore,
engaged in the manufacture, repair and maintenance of
airplanes and aircrafts and respondent is a domestic
corporation engaged in airline operations, executed an
agreement whereby petitioner agreed to undertake
maintenance and modification works on respondent’s aircraft.
They further agreed that the validity of the agreement shall
be governed by the laws of Singapore and that any suit
arising therefrom shall be submitted to the non-exclusive
jurisdiction of the Singapore courts. Petitioner undertook the
contracted works and billed respondent of the expenses.
However, the respondent failed to pay despite repeated
demands by the petitioner, which is in violation of the terms
agreed upon. Petitioner then filed with the High Court of
Singapore an action for collection of sum of money. The court
issued a writ of summons to be served extraterritorially upon
respondent thru the assistance of the sheriff of Pasay City to
effect said summons to respondent. However, despite receipt
of summons, the respondent still failed to answer the claim.
The High Court of Singapore rendered a judgment by default
against respondent. For the said judgment remained
unsatisfied, petitioner petitoned with the RTC of Pasay City
for the enforcement of said foreign judgment. Respondent
moved to dismiss on the ground of lack of jurisdiction over its
person, which was denied. On appeal, the CA granted the
petition of the respondent. Hence, this instant petition before
the SC contending that High Court of Singapore acquired
jurisdiction over the person of respondent and that the
judgment of default rendered by the same is enforceable in
the Phils.
Issues:
(1) Whether or not Singapore Court acquired jurisdiction over
the person of respondent
(2) Whether or not foreign judgment by default is enforceable
in the Phils.
Held:
(1) Yes. Generally, matters of remedy an procedure such as
those relating to the service of process upon a defendant are
governed by the lex fori, which is the law Singapore. The
service of summons outside Singapore is in accordance with
the Rules of Court of Singapore which provides that the
originating process may be served:
a. thru the gov’t of that country, where the
government is willing to effect service
b. thru a Singapore Consular authority in that
country, except where service thru such
authority is contrary to the law of the country or
c. by a method of service authorized by law
of that country for service of any originating
process issued by that country
In this case, the writ of summons issued by the Singapore
Court was served upon respondent at its office at Pasay City
and was received by Joyce Austria, Secretary of the General
Manager of the respondent company. Considering, that the
writ of summons was served upon respondent in accordance
with our rules, the jurisdiction was acquired by Singapore
High Court over its person.
(2) Yes. Generally, in the absence of a treaty or special
contract, no sovereign is bound to give effect within its
dominion to a judgment rendered by a foreign tribunal,
however under the rules of comity, utility and convenience,
nations have established a usage among civilized states by
which final judgments of foreign courts of competent
jurisdiction are reciprocally respected and rendered effective
under certain conditions that may vary in different countries.
The conditions for the recognition and enforcement of a
foreign judgment in Philippine legal system is contained in
Sec. 48, Rule 39 of the Rules of Court.
Philippine Aluminum Wheel vs. FASGI
California judgment must be enforced. In this jurisdiction, a
valid judgment rendered by a foreign tribunal may be
recognized insofar as the immediate parties and the
underlying cause of action are concerned so long as it is
convincingly shown that there has been an opportunity for a
full and fair hearing before a court of competent jurisdiction;
that trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the
defendant and under a system of jurisprudence likely to
secure an impartial administration of justice; and that there
is nothing to indicate either a prejudice in court and in the
system of laws under which it is sitting or fraud in procuring
the judgment.A foreign judgment is presumed to be valid and
binding in the country from which it comes, until a contrary
showing, on the basis of a presumption of regularity of
proceedings and the giving of due notice in the foreign
forum.