LEX SITUS or LEX REI SITAE

The law of the place where the property is located or situated, with respect to real property and even
personal property (Art. 15 of the New Civil Code)

Personal law of the owner with respect to personal property or movable.

Art. 15 of the Civil Code provides that “real property as well as personal property is subject to the law of
the country where it is situated”.

Doctrine of lex rei sitae also applicable to movables.

LEX SITUS FOR REAL PROPERTY

 Extrinsic and intrinsic validity over real property such as

 Alienations, transfer and mortgage
 Capacity of the contracting parties
 Interpretation of documents, effects of ownership
 Co-ownership
 Accession
 Usufruct
 Lease
 Easement
 Quieting of title
 Registration
 Prescription
 Police power, eminent domain and taxation

LEX SITUS FOR REAL PROPERTY – EXCEPTION

 Succession – National law of the deceased

 Order of succession
 amount of successional rights
 intrinsic validity of testamentary succession
 Capacity to succeed

 Contracts involving real property but do not deal with title or real rights over the property
 Proper law of the contracting party: either Lex Loci Voluntatis or Lex Loci intentionis
  Contracts where real property is given as security by way of mortgage to secure a principal
contract (Contract of loan)
 Loan is governed by the proper law of the contract between the parties, while the
accessory contract of mortgage is governed by the lex situs.

 While general rule, validity of a transfer of land be determined by LEX SITUS but the VALIDITY
OF A CONTRACT TO TRANSFER is determined by the proper law of the contract.

DIFFICULTIES OF LES SITUS IN MOVABLES

 Personal property is tangible (Choose in possession) and has fixed situs = No conflicting
problems
 Personal property with no fixed situs like those in motion of have changing situs (VESSELS and
GOODS IN TRANSIT, shares of stocks)
 Hence, artificial or constructive situs

CONSTRUCTIVE SITUS

 VESSELS – in view of their inherent mobility

 If public vessel – law of the flag
 Private or commercial vessels – law of the country or place of registry
 Temporary situs = of Private or commercial vessel is docked at a FOREIGN PORT.

 GOODS IN TRANSIT
 Liability for loss, destruction or deterioration of goods in transit = LAW OF DESTINATION IS
APPLIED
 Validity and effect of seizure of goods in transit = Temporary situs = law of the place where
the goods were seized
 Disposition or alienation of goods in transit
GR: Proper law of the contract between the parties: Lex Loci Voluntatis or Lex Loci
Intentionis
However, transfer of title to chattels- Law of the place where the chattels are located at the
time of the transfer

CONSTRUCTIVE SITUS to intangible properties or choose in action

 Credits or Debts
 Involuntary transfer or assignment of debt “garnishment”
-The situs is the place where the debtor may be served with summons, which is usually his
domicile.
 Voluntary assignment or transfer of credit
A. Proper law of the contracts control
B. The proper law of the original transaction out of which the chose in action or credit
arose
 C. Situs of a debt for taxation purposes is the domicile of the creditor, where the collective
credit may be taxed.
D. Administering debts – Situs is where the assets of the debtor are actually situated
 NEGOTIABLE INSTRUMENTS
 Embodied in the instruments
-If Philippine check – Philippine Law will apply
-American restatement – Situs is the place where the instrument was executed
 Validity of transfer, delivery or negotiation of negotiable instrument is generally the law of
the situs of the instrument at the time of transfer, delivery, or negotiation,

 SHARES OF STOCKS OF CORPORATIONS

 Sales of corporate stocks-law of the place of incorporation
 Attaching or execution creditors
(a) Not bound by the transfer unless
I. Unless entered in the books of the corporation
II. Even not entered, said creditors has knowledge of the
unregistered transfer
 Chattel mortgages or pledge of corporate shares
 Even if registered in the corporate books, do not bind the corporation, but the
parties are bound as long as they are validly entered into by them.
 Sale of corporate shares as between the parties is governed by the proper law of the
contract (Voluntatis or intentionis)
 Taxation on dividend received by corporate shares = Law of place of incorporation

 Franchises – Law of the states that granted them

 Goodwill of a business and taxation thereon – Law of the place where the business is carried on.
Where you are performing business.
 Patents, copyrights, trademarks, tradename, and service marks
 GR: In absence of treaty, protected only by the state that granted or recognize them
 In the Philippines, Subject to the provision of special law