RULES ON CHARACTERIZATION OF PROCEDURAL & SUBSTANTIVE

RULES
General Rule: If an issue is substantive Foreign law
If an issue is procedural Forum law or lex fori
Questions of Evidence Procedural law
Statute of Frauds: If the law forbids the obligation Substantive law
If the law forbids the enforcement of the obligation Procedural law
Borrowing Statutes Directs forum law to apply the foreign statute of limitations to the pending
claims based on the foreign law
Statute of Limitations: Specificity Test when it is directed at the newly Limitation is substantive
created liability, warranting a qualification of the right

PERSONAL LAW
Attaches to a person wherever he may go and generally
governs his status, capacity, condition, family relations and the
consequences of his actuations.
The personal law of an individual is his natural law.
Acquisition of Nationality
Birth
Jus Soli Nationality of the state where he was born
Jus Sanguinis Nationality of the parents
Naturalization
a. Direct Naturalization
b. Derivative Naturalization
(i) Wife of Naturalized Husband
(ii) Minor children of naturalized parents
(iii) Alien wife of a natural-born or naturalized citizen

If a woman repatriates, her repatriation does not carry with the repatriation
of the child as the minor was never a Filipino previously.
If instead of repatriation, the widow had automatically regained PH
citizenship, the nationality of the minor child would follow hers.
Effect of Naturalization
a. Minor born before Naturalization
(i) Born in the PH Filipino
(ii) Born outside PH
o Residing in the PH at the time of parents Filipino
naturalization
o Residing outside the PH at the time of parents Filipino only during his minority, unless he resides permanently in the PH
naturalization when still a minor, in which case he will continue to be a PH citizen even
after becoming of age.
b. Minor born after Naturalization
(i) Born in the PH Filipino
(ii) Born outside the PH Shall be considered a PH citizen, unless within 1 year after reaching the
age of majority, he fails to register himself as a PH citizen in the PH
consulate of the country where he resides and to take the necessary oath
of allegiance.
Children already of age at the time of parents naturalization Not Filipino, unless they themselves be naturalized
If a Filipino woman amrries a foreigner Gets her husbands nationality, if the laws of her husbands country so
provide
If she became a widow before the effectivity of CA No. 63, which is on Oct. Immediately reacquires PH citizenship (Talaroc v. Uy)
21 1963
If she became a widow on or after Oct. 21 1963 Has to repatriate herself, otherwise, she remains a foreigner

Domicile
Domicile of Origin
a. Minors
(i) Legitimate Domicile of his parents at the time of the childs birth
If the parents are separated, domicile of the custodial parent
(ii) Illegitimate Domicile of the mother at the time of the childs birth
(iii) Legitimated Domicile of the father at the time of childs birth (Art. 180, FC)
(iv) Adopted Domicile of real parents at the time of childs birth
(v) Foundling Country where foundling was found
b. Married Women Joint prerogative of husband and wife
Constructive Domicile / Domicile by Operation
a. Minors
(i) Legitimate Domicile of both parents
In case of disagreement, that of the father, unless there is a judicial order
to the contrary
(ii) Illegitimate Domicile of the mother

In case of absence / death of either parent The domicile of the present parent
(iii) Adopted Domicile of choice of the adopter
b. Insane, idiots, imbecile
(i) Below age of majority Rules on minors apply
 (ii) Of age and have guardians Domicile of choice of guardians
(iii) Does not have guardians Domicile of choice before they became insane
c. Married Women
(i) If the marriage is valid Domicile of both spouses, unless the law allows the wife to have a
separate domicile, for valid and compelling reasons
(e.g. legal separation / separation de facto)
(ii) If the marriage is voidable Apply the same rules as when the marriage is valid. After annulment, the
wife can freely select her own domicile of choice.
(iii) If the marriage is void Wife can have domicile separate from husband
d. Other persons
(i) Convict / prisoner Domicile he possessed prior to incarceration
(ii) Soldiers Domicile before enlistment
(iii) Public officials or employees abroad like diplomats, Domicile before they were assigned elsewhere, unless they voluntarily
consular officials, etc adopt their place of employment as their permanent residence

PERSONAL STATUS AND CAPACITY

Beginning of personality of natural persons National law (Art. 15, CC)
Age of majority National law
Use of names and surnames National law
Use of titles of nobility National law
Absence National law
Presumptions of death and survivorship Lex fori

Choice of Law Problems

FAMILY RELATIONS Gen Rule: Lex nationalii

Marriage
I. Marriage as a contract
Extrinsic Validity Lex loci celebrationis
- All states recognize as valid those marriages celebrated in Formalities prescribed therein
foreign countries if they comply with the
- Forms and solemnities of contracts, wills and other public Laws of the country in which they were executed (Art. 17, FC)
instruments
- All marriages solemnized outside the PH in accordance with the Valid in this country
laws in force in the country where they were solemnized and
valid there as such
Proxy marriages Lex loci celebrationis, where permitted by the law of the place where the
proxy participates in the marriage ceremony (at least insofar as formal
validity is concerned)
Common law marriages Not recognized under PH law
Marriage on board a vessel on high seas Nation whose flag the ship is flying
Consular marriages Filipino citizens abroad may be solemnized by a consul-general, consul or
vice-consul of the PH

Marriage performed by a consular and diplomatic agent empowered by the

sending state to officiate marriage is valid in the receiving state, only if the
latter has agreed to his acting in that capacity
Plural marriages If the parties or at least the husband is a Muslim (whose religion allows
plural marriages), it is believed that PH would recognize up to 4 marriages
of the same husband (as recognized by the PH Muslim Code on Personal
Laws)
Mixed marriages
Filipino and foreigner abroad If the marriage is valid under law of one of the spouses, while void under
the law of the other, we should uphold the validity of the marriage, unless
the marriage is universally incestuous or highly immoral
Filipino and foreigner in the PH PH law
Intrinsic validity
If celebrated abroad: -
Between Filipinos Lex loci celebrationis
- Without prejudice to the exceptions under Art. 26, 35 (1), (4), (5)
& (6), 36, 37, and 38 of the FC (bigamous, polygamous,
incestuous marriages), and consular marriages
Between Foreigners Lex loci celebrationis
Except: if the marriage is
a. Highly immoral
b. Universally considered incestuous
Mixed Uphold the validity of the marriage
If celebrated in the PH:
Between foreigners National law (Art. 21, FC) provided the marriage is not highly immoral or
universally considered incestuous
Mixed National law of the Filipino
Marriage by proxy Lex loci celebrationis (with prejudice to the foregoing rules)
(A marriage by proxy is celebrated where the proxy appears)
II. Marriage as a status
Personal rights and obligations between husband and wife National law of the husband

o If both will have a new common nationality
o If only one will change
o If the spouses retain their different nationalities after
marriage
Property relations between husband and wife
o Effect of change of nationality
Philippine Rule on Property Relations
(This rule shall not apply:
Where both spouses are aliens;
With respect to extrinsic validity of contracts affecting property
not situated in the PH and executed in the country where
property is located
With respect to the extrinsic validity of contracts entered into in
the PH but affecting property situated in a foreign country whose
laws require different formalities for their extrinsic validity)
Doctrine of Immutability of Matrimonial Property Regime
Except: If the national law of the husband violates public policy of the
forum OR the national law of the wife happens to be the law of the forum
The new one
The las common nationality
National law of both spouses / Law of the husband at the time of the
marriage (differing views depending on writer)
(The Hague Convention)
1. The internal law to be designated by the spouses before the
marriage
2. In the absence thereof, the internal law of the state in which the
spouses fix their 1st habitual residence
No effect
PH laws, regardless of the place of the celebration of the marriage and
their residence (in the absence of a contrary stipulation in the marriage
settlements)
Regardless of the change of nationality by either or both of the spouses,
the original property regime that prevailed at the start of their marriage
prevails

Divorce
If sought in the PH (whether by Filipinos or foreigners) Lex fori (hence will not be granted)
Except: Muslim divorces
If obtained abroad between Filipinos National law (hence, will not be valid here)
If obtained abroad between foreigners National law (if valid state granting it and valid according to the national
law of the parties, it will be valid here)
If obtained between a Filipino and foreigner) Filipino spouse will be allowed to remarry if the alien spouse obtained the
divorce

Legal Separation
Parties of the same nationality Personal law
Parties are different nationality Grounds available under the personal law of both spouses are all available
grounds for granting legal separation
In the case of alien Jurisdiction is not assumed by the forum unless the national law of the
parties is willing to recognize its jurisdiction
In the PH, foreigners may ask for legal separation here even if they did not What is important is that the court has jurisdiction over both parties
get married in this country
Most countries assume jurisdiction over cases of legal separation on the Domicile of one of the parties or the matrimonial domicile
basis of?

Annulment and Declaration of Nullity

Jurisdiction to annul Vested in the court of Domicile of the parties
(If non-resident, he must be domiciled in the forum.)
Governing law Lex loci celebrationis determines the consequence of any defect to form

Generally, the same applies with reference to substantive or intrinsic

validity.
But with regard to capacity of the parties to marry = National Law
Philippine Rule Nationality theory

Status of children
I. Legitimacy and Illegitimacy
Determination of Legitimacy of the child Common personal law of the parents, either domiciliary or nationality.
If parents have different nationalities National law of the Father
If illegitimate child Personal law of the Mother, unless the child is recognized by the father,
then the personal law of the father applies

(However, in Tecson v. COMELEC: the 1935 Consti states that among the
citizens of the PH are those whose fathers are citizens of the PH,
regardless of whether the children are legitimate or illegitimate)
Doctrine of Immutability of Status Status of the legitimate or illegitimate child is not affected by a subsequent
change of nationality of the parents.
If the child is later legitimated, personal law of the child follows that of the
father.

However, the rights and duties of parent and child would be governed by
the new national law of the parents, and thus, may be mutable.
Parental Authority over the child Personal law of the father
II. Legitimation National law of the parents
 If parents have different national law National law of the father
If the personal law of the parents or of the father changes The legitimation of the child is not affected
III. Adoption
Normally: Childs personal law
If the child does not reside in the country of his citizenship Personal law of the adopter; OR
Personal law of the adopter & child will be applied concurrently
General Rule: The legal effect of the adoption Law that created the relationship of adoption
Except: Public policy or interests of its inhabitants forbid its enforcement
demand the substitution of lex fori
Process of adoption Lex domicilii (Maam Beth)
IV. Guardianship
Over the person
a. Appointing court Court of the domicile of the ward
b. Powers of guardianship Coextensive with those of the appointing court (law of the appointing state)
Over the property
a. Appointing court Court where the property is found (lex reisitae)
b. Powers of guardianship Coextensive with those of the appointing court
Over the person and over the property (General guardian) Same as above

Funerals incidents thereof Where the body is burned

PROPERTY
Generally Lex situs or lex rei sitae
Real property Lex situs
Except:
Contracts not dealing with title over real property Lex loci voluntatis or lex loci intentionis
Real property is given as security Mortgage is governed by lex situs
Principal contract is governed by proper law of the contract
Tangible Personal Property (Choses in Posession) Lex situs
Same exceptions as real property but security is pledge, not
mortgage Except: Artificial or constructive situs are given to those which do not have
a fixed situs have changing situs (usually in motion)
Means of Transportation Law of the flag
Things in transitu 1. Seizure and arrest Where the owners creditor seizes the
Loss, destruction goods in transit, transport is discontinued and a temporary
Deterioration resting place is thereby created. The law of this place will
Validity / effect of seizure depend on whether the seizure was lawful or whether he has
Disposition / alienation acquired a lien, pledge, privilege or a similar right or what
pertains to that right
2. Disposition of goods Law of any place having substantial
connection with the transaction which will uphold its validity. May
choose among:
(a) Law of the temporary resting place (e.g. interim port)
(b) Lex loci actus
(c) Law of the place of destination
(d) Law of the last real situs of goods
Intangible Personal Property (Choses in Action)
Voluntary transfer or assignment of choses in action Personal law of the parties
Law of the place of execution of assignment
Law of place where debt recoverable
Involuntary transfer of choses in action (e.g. garnishment) Law of the state where debtor may be served summons
Debt for taxation purposes Domicile of the creditor, where the collectible credit may be taxed
Administration of debts Where the assets of the debtor are usually situated
Interpretation and effect of conveyance Lex situs
Extrinsic and Intrinsic Validity of Conveyance Lex situs

Except:
1. Art. 16 (2)
2. Subject matter of contract is land but issue pertains to
contractual rights and liabilities of the parties
3. Security is immovable property but issue is the validity and
effect of the obligation which the property secures
4. Under a policy-centered approach, when the situs of the
movable at the time of the transfer was insignificant or
accidental
5. When the issue involves consideration other than the validity The court may look into the law of another state which has a real interest
and effect of the transfer in applying its law
6. The validity of the contract to transfer an immovable
7. Negotiable instruments
a. Negotiability Law governing the rights of the instrument
b. Validity of the transfer, delivery, or negotiation Law of the situs of the instrument at the time of transfer, delivery, or
negotiation
8. Corporate shares
a. As against the Corporation and 3P Law of the place of incorporation
b. As between Assignor and Assignees Law most closely connected to the transaction
 c. Taxation on dividends received by corporate shares Law of the place of incorporation
d. Sale of corporate shares between parties Proper law of the contract, i.e. lex loci intentionis
(usually the place where the certificate is delivered to the buyer)
Franchises Law of the state that granted them
Patents, copy rights, trademarks, trade names, and service marks Protected only by the state that granted / recognized them
Except: When a treaty provides otherwise

CONTRACTS
Extrinsic validity Lex loci celebrationis or lex loci contractus (Art. 17, CC)
Contract entered by parties in 2 diff. countries by telex or fax Place where the offer was made
If the place of execution was merely casual or accidental Law which has the most significant relationship
(Restatemenet Second) What is acceptable on formalities That which meet the requirements of the place the parties executed the
contract
(Art. 17, CC) Forms and solemnities of contracts, wills, and other public Law of the country in which they are executed
instruments
Intrinsic validity (3 possible laws)
1. Lex loci contractus law of the place where the contract is
made
o Place of the last act necessary to bring binding
agreement to being
2. Lex loci solutionis law of the place of performance
o Matters related to time, place, and manner of perf
o Sufficiency of the perf
o Valid excuses for non-perf
3. Lex loci intentionis 00 law intended by the parties
o Intention may be expressed in a choice of-law-
provision
o When the parties stipulate that a contract be governed
by a specific law, such will be recognized (unless:
cogent reasons for not doing so, e.g. contrary to
fundamental policy of forum)
o Questions of construction and interpretation are within
the contractual capacity of the parties
Capacity to enter contract Personal laws of the contracting parties, either nationality or domiciliary
Except: Contracts involving alienation or encumbrance of real or Lex situs governs capacity of contracting parties
personal properties

Choice of law issues in conflicts contracts cases

1. Choice of Forum Clause Stipulation on the venue of the suit for litigation
Except: Choice forum clause will not be given affect when there is fraud or
overreaching, and said clause would be unreasonable and unjust
2. Arbitration Clause
3. Adhesion Contracts Not entirely prohibited

Valid in the absence of proof of arbitrariness, abuse of power, or gross

negligence and if it is fairly and freely agreed upon, reasonable and just
under the circumstances.
One is free to reject it entirely. If he adheres, he gives his consent.

Exception: When there is an oppressive use of superior bargaining power,

a PH court may be justified in refusing to apply the contract or a stipulation
(on the ground that there is no real arms-length transaction between the
contracting parties
Special Contracts
Sales and Barter, Lease of Property, and Commodatum
(1) Extrinsic validity Lex situs
(2) Capacity of parties Lex situs
(3) Intrinsic validity Lex situs
Lease of services and simple loan / mutuum
(1) Extrinsic validity Lex loci celebrationis
(2) Capacity of parties National law
(3) Intrinsic validity Lex loci intentionis
Contract of Agency
(1) Extrinsic validity Lex loci celebrationis
(2) Capacity of parties National law of the parties
(3) Intrinsic validity Lex loci intentionis
Exception to 1-3: If agency deals with Lex situs
conveyance / encumbrance of property and the
property applies
Pledge, Chattel Mortgage, Real Mortgage, and Antichresis
(1) Extrinsic validity Lex situs
(2) Capacity of parties Lex situs
(3) Intrinsic validity Lex situs
Guaranty and Suretyship
 (1) Extrinsic validity Lex loci celebrationis
(2) Capacity of parties National law
(3) Intrinsic validity Lex loci intentionis
Contract of Common Carrier of Goods
(1) Extrinsic validity Fixed situs of the carrier (depot or resting place)
(2) Capacity of parties Fixed situs of the carrier
(3) Intrinsic validity Fixed situs of the carrier
(4) Liability for loss, destructioin or deterioration of Law of the destination
goods in transitu
Transportation by Sea
1. Philippine ports to Foreign ports Law of the country of destination
2. Foreign ports to Philippine ports Civil Code (primary law)
Code of Commerce
COGSA
International Air Transportation
Under Art. 28 (1) of the Warsaw Convention, plaintiff may bring 1. Court where carrier is domiciled
the action for damages before: 2. Court where carrier has its principal place of business
3. Court where carrier has an establishment by which contract
has been made
4. Court of the place of destination

Action will prescribe if not brought within 2 years from the:

1. Date of arrival of the destination
2. Date on which the aircraft ought to have arrived
3. Date on which the transportation stopped
Applicable Law in the absence of an effective Choice Most Significant Relationship
Contracting
Negotiation
Performance
Situs of subject matter
Domicile, residence, nationality, place of incorporation, place of
business of parties
Place under whose local law contract will be most effective

But parties may not contract away applicable provisions of law especially
those heavily impressed with public interest

WILLS AND ADMINISTRATION OF ESTATE

1. Unitary or Single System Lex nationalii (for transmission of real and personal property)
2. Split or scission system
o Succession to real property Lex situs
o Succession to personal property Law of the domicile of deceased at the time of death
Extrinsic validity of wills (Law at the time the will was made)
Made by an alien abroad Lex nationalii
Lex domicilii
PH law
Lex loci celebrationis
Made by a Filipino abroad Lex nationalii
Lex loci celebrationis
Made by an alien in the PH Lex nationalii
Lex loci celebrationis
Extrinsic validity of Joint Wills (made in the same instrument)
Made by an alien abroad Valid in the PH if valid accdg to the lex nationalii or lex domicilii or lex loci
celebrationis
Made by a Filipino abroad VOID because lex nationalii
Made by an alien in the PH Should not be probated if it affects heirs in the PH (because of our public
policy against joint wills)
Made by an alien and a Filipino abroad Valid as t the alien if his national law or domicile law, or the lex loci
celebrationis allows it

Void as to the Filipino

Intrinsic validity of wills
Including order of succession, amount of successional rights, Lex nationalii of the deceased for countries that follow the nationality
and intrinsic validity of the provisions of the will theory, regardless of the location and nature of the property

Lex domiclii at the time of death, in countries that follow the domiciliary
theory

Note: In case of conflict between lex nationalii and lex domicilii, case can
be treated as renvoi to apply PH law even if deceased was citizen of
another country
Capacity to Succeed Lex nationalii of the deceased (Not the heir)
Probate of wills made abroad
General Rule: Lex fori
If not yet probated abroad Lex fori of the PH as to procedural aspects
 If already probated abroad Lex fori of the PH applies to the procedural aspects the will must also be
reprobated here.
Executors and Administrators
Where appointed Place where domicile at death, or in case of non-domiciliary, where assets
are found
Interpretation of wills 1. Testators intention
2. Verbal egis, if terms are clear and unambiguous.
3. Interpretation of ambiguous words law which was most
probably in the mind of testator
4. National law of the deceased should apply, since we may
reasonably presume that this was the testators intent. (Paras)
Revocation of wills
If revocation takes place in the PH
(whether testator is domiciled in the PH or in other country) PH law
If revocation takes place outside the PH
(By testator domiciled in the PH) PH law
If revocation takes outside the PH
(by testator who does not have his domicile in this country) Law of the place where will made; OR
Law of the place in which the testator had his domicile at the time of
revocation
Administration of Estate
Administration Law of t e state appointing the administrator or executor
- Law of the country from which the administrator derives his
authority
Distribution Law of the domicile (National law)
Principal Domiciliary Administration Country of deceaseds last domicile
Ancillary administration Countries where the deceased also left properties
If a person died intestate Lex nationalii

TORTS
General Rule: Lex loci delicti commissi (Law of place where committed) determines tort
liability in matters affecting conduct & safety
Concepts of Place of Wrong / Locus Delictis)
1. Common Law Concept Place where the wrongful act became effective
i.e. Last Act Necessary
(Traditional view; vested rights theory)
2. Civil Law Rule Place where the tortuous act began
(Legality / illegality of ones act should be determined by the law of the
state where he is at the time he does the act)
3. Theory fo Dr. Rabel Place where the important and substantial acts leading to tortuous act
were committed / Place having the most substantial connection with the
wrongful act
Modern Theories in Determining Liabilities for Torts
1. Theory of the Most Significant Relationship Country that has the most significant relationship to the occurrence and
parties (has greatest concern with the specific issue of the case)
2. Interest-Analysis Approach Relevant concerns that two or more states may have in the case.

3. Qavers Principle of Preference
4. German Rule or Elective Concurrence
Lex loci delicti commissii on Maritime Torts
Torts committed abroad a public vessel, wherever it may be
Torts committed abroad a private or merchant vessel on the high
seas
Two vessels from same state collide
Applied if the vessels come from different states with identical
laws
Vessels come from different states with different laws
Enforcement of claim for foreign tort
The state which has the more relevant and weighty interest in the case
should be considered the locus delicti.
A higher standard of conduct and financial protection given to the injured
party by State A is applied y State B (where the injury happened), if State
B adopts a lower standard of conduct and financial protection to the
injured.
(a) Place where the actor engages in his tortuous conduct; OR
(b) Place where the effects of his conduct occur
Law of the flag
Law of the registry
Law of registry
Identical law
General maritime law as understood and applied by the forum where the
case was filed
Action may be brought in any place where the tortfeasor may be found so
that he can be subjected to the jurisdiction of the Court

Forum law will usually be applied (bec. Forum law has a real interest in
allowing its injured domiciliary to recover damages)

CRIMES
General Rule: Lex loci delicti, or the law of the place where the crime was committed will
govern
Exceptions:
1. Theory of State Immunity
 2. French Rule (but the PH adopts the English Rule)
3. Extraterritoriality committed by PH nationals abroad
Essential elements of a crime and its penalties Generally where committed
Frustrated and consummated homicide, murder, infanticide, parricide Where the victim was injured
Attempted H, M, I, P Where the intended victim was so long as the weapon or the bullet either
touched him or fell inside the territory where he was
Bigamy Where the illegal marriage was performed
Theft and robbery Where the property was unlawfully taken from the victim
Estafa or swindling through false representations Where the object of the crime was received
Conspiracy to commit treason, rebellion, or sedition Where the conspiracy was formed
Libel Where published or circulated
Continuing crimes Any place where the offense beings, exists or continues
Complex crimes Any place where any of the essential elements of the crime took place

CORPORATIONS
Existence, legal character, powers and liabilities General Rule: Law of the place of incorporation

Exceptions:
1. Constitutional and Statutory Restriction
2. Control Test during Wartime
Alteration of Charter
Internal organization
Merger and consolidation Law of the place of incorporation
Formation of the corporation (requisites)
Kinds of stocks; transfer of stocks to bind corporation; issuance, amount,
and legality of dividends; powers and duties of members, stockholders,
and officers
Validity of corporate acts and contracts (including ultra-vires acts) Law of the place of incorporation and law of the place of performance
(The act or contract must be authorized by BOTH LAWS)
Right to sue and amenability to court processes and suits against it Lex fori
Manner and effect of dissolution Law of the place of incorporation
Provided, that the public policy of the forum is not mitigated against
Domicile If not fixed by the law creating or recognizing the corporation or by any
other provision the domicile is where its legal representation is
established or where it exercises its principal functions
Receivers (appointment and powers) Principal receiver is appointed by the courts of the state of incorporation;
Ancillary receivers by the courts of any state where the corporation has
assets
(Authority of receivers is CO-EXTENSIVE with the authority of the
appointing court)
Partnership
Existence; legal personality; capacity to contract; liability of firm to partners Personal law of the partnership
and 3P (i.e. law of the place where it was created)

Subject to same exceptions as corporations

Creation of branches in the PH Law where the branches were created (PH Law)
Dissolution, winding up, termination of branches in the PH PH Law
Domicile Place where their legal rep is established, or where they exercise their
principal functions
Receivers PH Law, insofar as the assets in the PH are concerned
Foundations Personal law of the foundation (place of the principal center of
administration)
Jurisdiction over Foreign Corporations Consent Doctrine
- A foreign corporation will be recognized and will be allowed to
transact business in any state which gives it consent.
- All foreign corporations lawfully doing business in the Ph shall
be bound by all laws, rules, regulations applicable to domestic
corporation (except those on creation, formation, organization or
dissolution, or those which fix the relations, liabilities,
orresponsibilities of SH, M or O of the corporation to each other)
May a foreign corporation sue and be sued in the PH? YES, if it has the necessary license to do business here.
Right of a foreign corporation to bring suit
General Rule No foreign corp transacting business in the PH without its license shall be
permitted to maintain or intervene in any action, suit or proceeding in any
court or admin agency in the PH
- BUT: Such corp may be sued or proceeded against before PH
courts or administrative tribunals on any valid cause of action
recognized under the PH laws
Exceptions: 1. Isolated transactions
2. Action to protect trademark, trade name, good will, patent or for
unfair competition
3. Agreements fully transacted outside the PH
4. Petition is filed merely a corollary defense in a suit against it
5. To enforce a right not arising out of a business transaction (e.g.
tort that occurred in the PH)
6. When the parties have contractually stipulated that the PH is the

Effect of failure to secure a license to transact business
Foreign Corp and Compulsory Counterclaims
Trusts
venue ofactions
7. When the party sued is barred by the principle of estoppel /
principle of unjust enrichment from questioning the capacity of
foreign corp; AND
8. Recovery of misdelivered property
1. Foreign corp which does not business in the PH w/o a license
has no right to sue in the PH, but it can be sued
2. Contracts entered into are valid as between parties, but may not
be enforced in PH
When a foreign corp is sued, it may interpose a counterclaim which would
defeat complaint.
If the foreign corp is suing on an isolated contract or is exempt from the
license requirement, a local defendant can file a counterclaim.
In either case, the foreign corporation is not maintaining a suit.
When trust contains an express choice-of-law provision, that law shall
apply. In the absence of an express provision, the courts will deem as
controlling the law that will sustain the validity of the trust.