PRIVATE INTERNATIONAL LAW

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

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

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

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

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

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

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

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

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

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

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

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PRIVATE INTERNATIONAL LAW
Prof. Elizabeth Aguiling-Pangalangan • Second Semester, A.Y. 2014-2015
PART ONE: INTRODUCTION
Chapter I
SCOPE OF CONFLICT OF LAWS: ITS NATURE, DEFINITION, AND IMPORTANCE
A. DIVERSITY OF LAWS AND CUSTOMS
• Increased number of independent and sovereign states – causes:
o Decolonization;
o Dismemberment of existing states.
• Promulgation of laws and development of jurisprudence = exercise of
sovereignty.
• Laws may be similar, but they may be applied/interpreted differently
because of:
o Religion;
o Culture;
o Customs.
• Result of development in communication and transportation:
o More people enter into contracts with nationals of other
states.
! Entered into in one state, but take effect in another,
hence, governed by different laws.
! May also be tried and decided in yet another state.
o Marriages and common law relationships among nationals of
varying states.
• Conflict of Laws or Private International Law (PrIL) addresses
problems caused by:
o Division of the world into many territorial units;
o Imposition by each unit of its own set of laws; and
o Occurrence of events that contain elements significant to
more than one legal system.
• Formulation of uniform municipal laws
o Attempted by the ASEAN Law Association; scope:
! Persons
! Property
! Contracts
o Problem: sovereignty and independence of states prevail.
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• International conventions relating to mutual recognition of foreign
laws and judgments:
o Sixth International Conference of American States on Private
International Law (1928);
o The Bustamante Code (by the International Commission of
Jurists);
o Inter-American Council of Jurists (by the Organization of
American States);
o Hague Convention on Private International Law (began in
1951) – 34 conventions.
• Conflict of laws affects not only judges but also administrative
agencies and public officers called upon to decide cases.
o Thus, many states have adopted a body of rules governing
the recognition and enforcement of foreign judgments and
decrees.
• Principles of conflict of laws incorporated in municipal law; basis:
o Not extraterritoriality, but
o Comity of nations.
Hilton v. Guyot
Guyot obtained a favorable judgment against Hilton from a French court.
Hilton and his co-defendant were residents of New York doing business in
Paris. Guyot sought to have the French judgment enforced in the US. The
District Court ruled in favor of Guyot.
HELD: The French judgment is not conclusive upon US courts. The general
rule is that judgments have no extraterritorial effect. There is, however, a
recognized exception based on the principle of “comity of nations.” Comity is
neither an absolute obligation nor a matter of mere courtesy or goodwill.
Rather, it is the recognition which one nation allows within its territory to the
legislative, executive or judicial acts of another nation, having due regard both
to international duty and convenience, and to the rights of its own citizens, or
of other persons who are under the protection of its laws. Nonetheless, the
French judgment subject of this case cannot be enforced because of want of
reciprocity.
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Dissent: The principle of res judicata is applicable even to foreign judgments. State-to-state;
The application of the rule does not rest upon discretion. Transactions government-to- Private transactions
government
B. DEFINITION Diplomatic protest;
• Classical: that part of municipal law which governs cases involving a arbitration or
Remedies available
foreign element. Remedies conciliation; filing before
under municipal law
• Minor: those universal principles of right and justice which govern the international tribunals;
courts of one state having before them cases involving the operation use of force; war
and effect of laws of another state or country. CONFLICT OF LAWS
MUNICIPAL LAW
• Chesire: that part of law which comes into play when the issue before RULES
the court affects some fact or event, or transaction that is so closely Not merely part of
connected with a foreign system of law as to necessitate recourse to domestic law because it
that system. involves a foreign
No foreign element is
• AmJur 2d: that part of the law of each state or nation which element upon which a
present
determines whether, in dealing with a legal situation, the law of some court or tribunal decides
other state or nation will be recognized, given effect, or applied. to apply a local law or a
• Hilton v. Guyot: the law concerning the rights of persons within the foreign law.
territory and dominion of one nation, by reason of acts, private or
public, done within the dominion of another nation. C. OBJECT, FUNCTION AND SCOPE
• To provide rational and valid rules/guidelines in deciding cases where
Distinguished From Public International Law and Other Disciplines either the parties, events or transactions are linked to more than one
jurisdiction.
PIL PRIL • To promote stability and uniformity of solutions provided by the laws
States and their and courts of each state called upon to decide conflicts cases.
Ratione personae and Individuals and their
relationships among
ratione materiae private transactions Article II, §2, 1987 Const. The Philippines x x x adopts the generally accepted
themselves
Generally, from the principles of international law as part of the law of the land and adheres to the
internal law of each policy of peace, equality, justice, freedom, cooperation, and amity with all
Art. 38, ICJ Statute nations.
state.
1. Custom
2. Treaty
Exception: any conflict • Three distinct but interrelated issues in conflict of laws:
3. General principles of
of laws question o Adjudicatory jurisdiction;
Sources of law law
governed by a treaty o Choice-of-law;
4. Judicial decisions,
(e.g. Hague Convention o Recognition and enforcement of foreign judgments.
teachings of the
on the Conflict of Laws
most highly
relating to the Form of
qualified publicists
Testamentary
Dispositions).
States and
internationally
Persons involved Individuals
recognized
organizations

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 Chapter II
A BRIEF HISTORY AND DEVELOPMENT OF CONFLICT OF LAWS
A. ROMAN LAW ORIGIN
• Ius gentium
o Law of nations
o Law that governs the relations of states
o Early Roman Empire: body of rules developed by the praetor
pregrinus to resolve disputes between foreigners and
citizens.
o Derived from Greek legal doctrines, including the concept of
bona fides.
• Ius civile
o Applied only to Roman citizens.
• Rise of Italian City States
o They all had their respective municipal laws " led to the
intensive study of conflict of laws.
o Bartolus – “Father of Conflict of Laws”
! Formulated the “Theory of Statutes.”
• Theory of Statutes
o Since Italy was divided into several city states, there arose a
problem of which law to apply in transactions between
individuals of different city states.
o The “Statute” applied to questions of choice of law.
o Classifications:
! Real (statuta realia) – immovable property within the
state;
! Personal (statute personalia) – personal status,
capacity and movables; and
! Mixed (statute mixta) – contracts, depending on
where they were entered into by different nationals.
th
• 16 Century France
o Charles Dumoulin – developed a method to determine what
law would govern contracts between different nationals.
o Bertrand D’Argentre – formulated the principle of universal
succession.
th th
• 16 -17 Century Netherlands
o Dutch jurists: Burgundou, Rodenberg, Huber
o Huber was the first to use the term “conflict of laws.”
! State is not obliged to apply a foreign law unless
imposed by treaty, by comitas gentium (comity), or on
consideration of courtesy and expediency.
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o Voet: no statute can have extraterritorial application.
! But a sovereign can make foreign law operative in its
territory, provided it does not prejudice the subjects
of the sovereign whose recognition is sought.
• Ius commune – supranational law based on Roman law; became
continental European common law.
• Codification of national laws resulted in the incorporation of conflict
of laws provisions in the countries’ civil codes.
o Bavarian – theory of statutes.
o Prussian – theory of efficacy of contracts.
o French (basis of Spanish, Belgian and Romanian) –
nationality law principle, now Art. 15, NCC.
th
• 19 Century:
o Justice Story – the foundation of conflict of laws is the
principle of comity of nations.
o Prof. Joseph Beale – territorial “vested rights” school of
thought.
o Carl Von Savigny – basis is not comity but the resultant
benefits for everyone concerned.
! Founder of modern PrIL.
! Advocated the theory of situs (seat of the legal
relationship) – every element of a transaction must
be governed by the law of the place with which said
element has the most substantive connection.
o Mancini – nationality theory (for matters concerning status,
capacity and private interests of the individual).
B. MODERN DEVELOPMENTS
• Neo-statutists – followed the Italian theory; when two or more laws
are applicable to a conflict of laws problem, the statute determines
what law shall prevail.
• Internationalists – there should be a single body of rules that can
solve problems involving a foreign element.
• Territorialists – the law of the state applies to the persons and things
within the state. No foreign law should be applied.
o Only rights vested or acquired under a foreign law are
recognized but not the law itself.
• 1969: Second Restatement of the Conflict of Laws (Reese)
o In the absence of statutory law, the law to applied is the law
of the most significant relationship.
• Cavers, Currie and Ehrenzweig – policy-centered approaches.
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Conflict of Laws in the Philippines
• Hardly known or given much importance until the Philippines became
a sovereign state.
• Spanish Civil Code: contained conflict of laws provisions adopted
from the Code Napoleon of 1804.
• New Civil Code:
o Art. 15 (nationality principle)
Laws relating to family rights and duties, or to the status,
condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad. (9a)
o Art. 16, par. 1 (lex situs rule) – adopted from Art. 10, Spanish
Civil Code.
Real property as well as personal property is subject to the
law of the country where it is situated.
o Art. 16, par. 2 (universal succession)
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national
law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of
the country wherein said property may be found. (10a)
o Art. 17, par. 1 (lex loci contractus) – from Art. 11, Spanish
Civil Code
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.
• Introduction of PrIL in the Philippines: 1911, when UP Law started.
• Until the 1950s, foreign law books and US cases were studied.
• PrIL became a required subject for the Bar Examinations.
o It was merged with Civil Law, hence the impression that PrIL
is part of Civil Law. " this mindview limits the perspective
and scope of analysis required for conflict of laws problems.
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• At present: more foreign transactions (both natural and juridical
persons)
o Specific areas – transactions of foreign corporations and
international air transport (Warsaw Convention).
o Torts claims – relating to OFWs.
Chapter III
SOURCES OF CONFLICT OF LAWS
A. CODES AND STATUTES
• Originated in continental Europe where most laws were codified.
o Primary sources of the law – civil codes of the different
countries.
! Roman codes – ius gentium
! Code Napoleon of 1804 – personal law of the
individual
! Dutch (1829), Romanian (1865), Italian (1865),
Portuguese (1867) and Spanish (1888) Codes
followed suit.
! German Code (1896) – contained provisions on
Conflict of Laws.
! Others: Greece, South America (Code of Bustamante)
• Spanish Civil Code of 1888
o Enforced in the Philippines on December 7, 1889 until NCC
took effect on August 30, 1950.
o Its provisions on Conflict of Laws were adopted in the NCC.
• Code of Commerce of Spain – contained provisions on foreign
transactions which were enforced in the Philippines.
• 1987 Constitution
o Contains provisions on nationality and comity
• Special laws
B. TREATIES AND INTERNATIONAL CONVENTIONS
C. TREATISES, COMMENTARIES AND STUDIES OF LEARNED SOCIETIES
D. JUDICIAL DECISIONS
• Most important source of conflict of laws rules.
• PrIL is more completely judge-made than almost any other branch of
law.
• In the Philippines: judicial decisions undoubtedly form the main bulk
of source of conflict rules.
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 PART TWO: JURISDICTION AND CHOICE OF LAW
Chapter IV
JURISDICTION
• Two concepts of jurisdiction:
o Judicial – power or authority of a court to:
! Try a case;
! Render judgment; and
! Execute the judgment in accordance with law.
o Legislative – ability of a state to:
! Promulgate laws; and
! Enforce them on all persons and property within its
territory.
• Four major questions to be considered in resolving a PrIL question:
1. Has the court jurisdiction over the person of the defendant or
his property?
2. Has the court jurisdiction over the subject matter
(“competency”)?
3. Has the suit been brought in the proper venue in cases where
a foreign element is involved?
4. Is there a statute or doctrine under which a court qualified to
try the case may or may not refuse to entertain it?
A. BASIS OF EXERCISE OF JUDICIAL JURISDICTION
• Jurisdiction over the person – forum-defendant contacts
• Jurisdiction over the res – forum-property contacts
• Jurisdiction over the subject matter
1. JURISDICTION OVER THE PERSON
• How acquired: voluntary appearance of a party and his submission to
authority.
• Plaintiff: by the filing of a case in court.
• Defendant:
o Entry of appearance – tantamount to consent unless he
appears for the purpose of contesting the court’s jurisdiction.
o Service of process
o Counterclaim against non-resident plaintiff – as long as it
arises out of the original cause of action.
• Service of summons:
o Personal service under Rule 14, §6:
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Service in person on defendant. — Whenever practicable, the
summons shall be served handing a copy thereof to the
defendant in person, or, if he refuses to receive and sign for it,
by tendering it to him. (7a)
o Substituted service under Rule 14, §7:
Substituted service. — If, for justifiable causes, the defendant
cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving
copies of the summons at the defendant’s residence with
some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendant’s office or
regular place of business with some competent person in
charge thereof. (8a)
Gemperle v. Schenker
Mr. Schenker (Swiss citizen and resident) filed a case against Gemperle to
enforce a subscription contract and to exercise his preemptive right with
regard to his shares in the Philippine-Swiss Trading Co. He was represented
by his wife and attorney-in-fact, Mrs. Schenker. Gemperle, in turn, filed a
complaint for damages. Summons was served upon Mrs. Schenker in the
Philippines. The CFI dismissed the case for want of jurisdiction over the
person of Mr. Schenker.
HELD: The lower court acquired jurisdiction over the person of Mr. Schenker
through the service of summons on his wife. Mrs. Schenker had the authority
to sue, and she actually sued on behalf of her husband. Thus, she was also
empowered to represent him in suits filed against him, like the case at bar—
this case being a consequence of the action brought by her on his behalf.
2. JURISDICTION OVER THE PROPERTY
• How acquired:
o Seizure of the property under legal process;
! Attachment
o Institution of legal proceedings wherein the court’s power
over the property is recognized and made effective.
! Land registration
• In rem jurisdiction – the situs could “bind the world” and not just the
interest of specific persons.
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 o Basis: physical presence of the property within the territorial
jurisdiction of the forum.
• In personam jurisdiction – binds the interest of specific persons.
• Quasi in rem jurisdiction – based on the physical presence of the
property within the territorial jurisdiction of the forum, BUT affects
only particular persons.
o Quieting of title – court may declare one claimant’s title to be
superior than the others.
• Service of summons by publication (for in rem and quasi in rem):
Extraterritorial service. — When the defendant does not reside and is
not found in the Philippines, and the action affects the personal
status of the plaintiff or relates to, or the subject of which is, property
within the Philippines, in which the defendant has or claims a lien or
interest, actual or contingent; or in which the relief demanded
consists, wholly or in part, in excluding the defendant from any
interest therein, or the property of the defendant has been attached
within the Philippines, service may, by leave of court, be effected out
of the Philippines by personal service as under section 6; or by
publication in a newspaper of general circulation in such places and
for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the
court may deem sufficient. Any order granting such leave shall
specify a reasonable time, which shall not be less than sixty (60) days
after notice, within which the defendant must answer. (17a)
Pennoyer v. Neff
Mitchell, an Oregon attorney, filed suit against Neff in Oregon for the payment
of $300 in attorney’s fees. Neff, a California resident, had been served by
publication in an Oregon newspaper. The trial court ruled in favor of Mitchell.
Later, Neff’s property in Oregon was sold at public auction to Pennoyer. Neff
sued Pennoyer to recover the property contending that the sale was void
since the Oregon court never acquired jurisdiction over his person.
HELD: The Oregon court had no jurisdiction over the person of Neff. Service of
summons by publication is appropriate only in cases where the action is one
in rem. But where the action is one in personam, constructive service in this
form upon a non-resident is ineffectual for any purpose.
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International Shoe Co. v. Washington
International Shoe is a Delaware corporation with principal place of business
in Missouri. It employed Washington residents to work as salesmen. Their
authority was limited to exhibiting samples and soliciting orders—they had no
power to enter into contracts or to make collections. The State of Washington
sued International Shoe for unpaid contributions to the state unemployment
compensation fund. Service of summons was made upon one of the sale
solicitors and notices sent to the Missouri office.
HELD: International Shoe is liable. Due process requires only that in order to
subject a defendant to a judgment in personam, if he be not present within
the territory of the forum, he have certain minimum contacts with it such that
the maintenance of the suit does not offend “traditional notions of fair play
and substantial justice.” A corporation is deemed to be “present” where its
activities (1) have been continuous and systematic, and (2) give rise to the
liability sued upon. The activities of appellant’s salesmen in Washington
constitute minimum contacts to justify the exercise of jurisdiction over its
person.
Mullane v. Central Hanover Bank & Trust Co.
The Bank established a common trust fund. It petitioned the court for the first
settlement of its accounts. The only notice given to beneficiaries was by
publication in the newspaper. Mullane, the beneficiaries’ guardian, objected to
the settlement of the accounts because notice of publication was inadequate
to afford due process.
HELD: Court has no jurisdiction over the persons of non-residents notified by
publication. Personal service of written notice within the jurisdiction is the
classic form of notice always adequate in any type of proceeding. However,
this is not always practicable, thus, other modes of service may be resorted
to. The test is whether the chosen method is, in itself, reasonably certain to
inform those affected; or, where conditions do not reasonably permit such
notice, that the form chosen is not substantially less likely to bring home
notice than other of the feasible and customary substitutes. Publication alone
is not a reliable means of informing interested parties that their rights are
before the courts. In this case, the trustee had knowledge of the beneficiaries’
names and addresses. Notice could have been sent, at the very least, by
ordinary mail.
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 Shaffer v. Heitner
Heitner filed a derivative suit against Greyhound Corp. (Delaware corporation),
its subsidiary, and 28 directors of one or both corporations before a Delaware
court. The court ordered the sequestration of shares of stock in Greyhound
which were not physically located in Delaware. Defendants were notified of
the proceedings by publication and mail. 21 of the defendants claimed that
the court had no jurisdiction as they did not maintain sufficient contacts in
the state of Delaware so as to dispense with personal service.
HELD: The contacts between defendants and Delaware are insufficient to
justify the exercise of jurisdiction. Assertion of jurisdiction was based solely
on the statutory presence of defendants’ property within the state. However,
such property is not the subject matter of the litigation, nor is the underlying
cause of action related to such property. Heitner alleges that defendants’
positions as corporate directors and officers of Greyhound constitute
minimum contacts. He claims that Delaware has a strong interest in
supervising the management of a Delaware corporation. This argument is
undercut by the failure of the Delaware Legislature to assert the state interest
appellee finds so compelling. Delaware has not enacted a statute treating
acceptance of a directorship as consent to jurisdiction in the state.
• Traditional basis for exercise of judicial jurisdiction: the state’s
physical power over persons and property within its territory (theory
of territorial power).
o In personam jurisdiction over a person physically served with
summons while physically present in the state; and
o In rem jurisdiction over property situated within the state
regardless of whether it could exercise jurisdiction over the
persons whose interest would be affected by the decision.
• The Philippines still recognizes these distinctions, thus, Pennoyer v.
Neff remains good law.
• In the US, there has been a shift to considerations of minimum
contacts and fundamental fairness.
o International Shoe Co.: “Due process requires…that a
defendant…have certain minimum contacts such that the
maintenance of the suit does not affect traditional notions of
fair play and substantial justice.”
o Requirement of forum-transaction contacts that will make it
fair for a defendant to defend a suit in the forum regardless of
his non-resident status.
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! Where a defendant does business in a state, it can be
sued in that forum even on a claim not arising from
its business activities.
! If a corporation establishes its presence in a state
through the acts of its authorized agents, the
corporation is deemed to have consented to service
and suit.
o Mullane established the standard for adequate notice—the
manner in which notice is given should reasonably result in
informing the affected party.
! When conditions do not allow such notice, the form
chosen should not substantially be “less likely to
bring home notice other than of feasible and
customary substitutes.”
o Shaffer clarified that the minimum contacts and fundamental
fairness test should be satisfied regardless of whether the
proceedings are in rem, quasi in rem or in personam.
o Distinction between International Shoe and Shaffer:
! International Shoe requires minimum contacts
between the defendant and the forum.
! Shaffer demands that it exists among the forum, the
defendant and the cause of action.
• It is doubtful whether jurisdiction can be
sustained in cases where the cause of action
arises business activities which took place
outside the forum.
• The change in conceptual foundation does not affect suits in rem
where the property itself is the subject of the controversy.
o Physical presence in the forum state provides the necessary
minimum contacts.
o State’s court is a fair forum because the parties could very
well foresee that the court would exercise jurisdiction based
on situs of the property.
Long-Arm Statutes
• Specify the kinds of contacts upon which jurisdiction will be asserted,
such as:
o Commission of a tortious act within the state;
o Celebration of a contract there; or
o Presence of property owned by the defendant.
• If these or other minimum contacts exist, the court can exercise
jurisdiction because the state has a justified interest in providing the
Page 8 of 107
 plaintiff with a forum, and no fundamental unfairness results in
subjecting the defendant to a suit there.
• Some long-arm statutes broadly authorize courts to assert
jurisdiction in any case not inconsistent with the Constitution, to be
decided on a case-to-case basis.
3. JURISDICTION OVER THE SUBJECT MATTER
• Determined by the Constitution, the Judiciary Act, and BP 129 among
others. 1. DISMISS THE CASE
• Cases are allocated among the courts according to the nature of the
controversy. Doctrine of forum non conveniens
• Subject matter jurisdiction is more than the general power conferred
by law to take cognizance of cases of a general class to which the
case belongs.
o The power of the court must be properly invoked by the filing
of a petition.
• Jurisdiction cannot be conferred by the consent of the parties.
• A decision is void and may be set aside either directly or collaterally
where the court exceeds its jurisdiction and power in rendering it.
Idonah Perkins v. Roxas
Benguet consolidated mining corp
Eugene Perkins filed suit against BCMC praying that he be declared the owner
of certain shares of stock in that corporation. The CFI ordered amendment of
the complaint after BCMC raised an adverse claim over the same shares of
stock as a defense. The adverse claimant, petitioner Idonah Perkins, claimed
that the CFI is without jurisdiction to adjudicate the dispute in view of a
judgment previously rendered by the New York Supreme Court declaring her
the owner of the shares of stock in BCMC.
HELD: The CFI has jurisdiction. Jurisdiction over the subject matter depends
on the nature of the cause of the action and of the relief sought. It is
conferred by the sovereign authority which organizes the court and is sought
for in general nature of its powers, or in authority specially conferred.
Respondent’s action calls for the adjudication of title to certain shares of
stock of BCMC and the granting of affirmative reliefs—this is within the
jurisdiction of the CFI of Manila. On the claim that the NY judgment
constitutes res judicata on all the questions constituting the subject matter of
the civil case: This is a matter that goes into the merits of the controversy and
relates to the rights of the parties as between one another, and not to the
jurisdiction of the court.
B. WAYS OF DEALING WITH A CONFLICTS PROBLEM
• The court may either:
o Dismiss the case for lack of jurisdiction or on the ground of
forum non conveniens; or
o Assume jurisdiction and apply either:
! Forum law; or
! Foreign law.
• Court may decline to assert jurisdiction on the ground that the
controversy may be more suitably tried elsewhere.
• Literally means that “the forum is inconvenient.”
• Origin is vague:
o Not Roman Law or continental practice
o First used in the 1800s when Scottish courts would refuse to
hear cases on the ground that “the ends of justice would best
be served by trial in another forum.”
• American courts:
o Applied it in order to prevent abuse of the court’s process.
! When plaintiff deliberately chooses the forum to
make the defendant incur unnecessary expenses and
hardship; or
! When non-resident plaintiff chose the forum because
he felt that jury verdicts were larger than in other fora.
o Refused to assert jurisdiction when such would be
burdensome on the court or taxpayers.
o Other reasons:
! Severe backlog of cases
! Jury duty where a community has no link or interest
in the litigation
! Local machinery was inadequate to effectuate a right
• No way to secure evidence or attendance of
willing witnesses
• Union Carbide case: US CA sustained NY district court’s dismissal of
a suit on the ground of forum non conveniens.
o Residents of Bhopal, India filed a suit for damages in a NY
court.
o Chemical plant accident
• English and Scottish courts:

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 o When there was another available and more appropriate
forum in which the ends of justice would be better served;
o Eliminating the vexatious or oppressive character of the
pending proceedings; and
o Removing any unfairness to either party which would result
from trial in the forum seized of the case.
• Global forum shopping – occurs where there is filing of repetitious
suits in courts of different jurisdictions, two or more courts having
jurisdiction over the case.
o Litigants then execute the judgment most favorable to them.
o Result: conflicting decisions; antithetical to the orderly and
fair administration of justice.
• First Philippine International Bank v. CA:
o Forum shopping originally a PrIL concept.
o Litigants have the option to choose the forum for various
reasons or excuses, such as:
! Procedural advantages;
! To annoy and harass the defendant;
! To avoid overcrowded dockets; or
! To select a more friendly venue.
o Forum non conveniens – principle whereby a court, in conflict
of laws cases, may refuse impositions on its jurisdiction
where it is not the most “convenient” or available forum and
the parties are not precluded from seeking remedies
elsewhere.
• Wing On Company v. Syyap: plaintiff’s choice of forum should not be
disturbed “unless the balance is strongly in favor of the defendant.”
Heine v. New York Insurance Company
Defendant insurance companies were incorporated in NY, doing business in
Germany. Cases were filed against them to recover on some 240 life
insurance policies made and issued in Germany, in favor of German citizens,
and payable in German currency. The cases were filed in Portland, Oregon,
where defendants maintained statutory agents.
HELD: The cases should be dismissed on the ground of forum non
conveniens. None of the claimants are residents of Portland. The courts of
Germany and New York are open and functioning and competent to take
jurisdiction of the controversies, and service can be made upon the
defendants in either of such jurisdictions. If the suit were to be maintained in
Portland, it would entail great and unnecessary inconvenience and expense to
Ish Guidote
the insurers, whose offices are 3,000 miles away. The exercise of jurisdiction
is a matter of discretion, and the courts may choose to decline to entertain
jurisdiction of causes of action arising in a foreign jurisdiction, where both
parties are nonresidents of the forum.
EAP: How do you prove that the forum is convenient? Establish that—
1. It is an adequate alternative forum; and
2. Legal processes can be served.
In Re: Union Carbide
This case concerns the Bhopal Leak Disaster. The plant involved was owned
by Union Carbide India Limited (UCIL). Class action suits were brought before
the District Court of New York. UCIL’s parent company, UCC, filed a motion to
dismiss on the ground of forum non conveniens. The court granted the
motion subject to four conditions:
1. UCC consents to the jurisdiction of Indian courts;
2. UCC agrees to waive the defense of prescription;
3. UCC agrees to satisfy the Indian court judgment; and
4. UCC subjects itself to discovery measures.
HELD: The dismissal of the cases was proper. All but a few of the 200,000
plaintiffs are Indian citizens and residents. While UCC itself is domiciled in the
US, a great majority of the crucial evidence to be presented in this case is
located in India. These include documents (plans, designs, safety
precautions, etc.) and witnesses.
As to the conditions imposed on the dismissal:
• Consent to jurisdiction and waiver of statute of limitations – Not
unusual.
• Consent to enforceability of Indian judgment – UCC claims that the
NY court should retain “jurisdiction” over the case even if it is already
before an Indian court to see to it that due process requirements are
complied with.
o This violates basic jurisdictional principles. After a court
authorizes a dismissal based on forum non conveniens, it
ceases to have any further jurisdiction on the matter.
• Consent to discovery under the Federal Rules of Civil Procedure –
Erroneous because matters of procedure are governed by forum law.
EAP: Why were the cases brought in NY in the first place? US courts are more
generous when it comes to awarding damages.
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 Wing On Company v. Syyap
Syyap, a domestic corporation, bought items of clothing from Wing On, a NY
company not authorized to do business in the Philippines. Syyap failed to pay
Wing On the full amount due under the contract. Hence, Wing On filed a
collection case against Syyap before the CFI. The trial court ruled in favor of
Wing On. Syyap now contends that the case should have been dismissed on
the ground of forum non conveniens.
HELD: Dismissal is not warranted. GENERAL RULE: The plaintiff’s choice of
furm should not be disturbed. EXCEPTION: When the balance is strongly in
favor of the defendant. In determining whether the forum is inconvenient, the
possibility of enforcing judgment must be considered. In the case at bar,
dismissal of Wing On’s complaint could prove problematic since defendant is
a resident of the Philippines.
• No existing catalogue of circumstances that will justify sustaining a
plea of forum non conveniens.
o Public and private interests should be weighed.
• Factors relevant to private interest:
o Ease of access to source of proof;
o Availability of compulsory process for attendance of unwilling
witnesses;
o Cost of obtaining attendant of willing witnesses;
o Possibility of viewing the premises; and
o All other practical problems that make trial easy, expeditious
and inexpensive.
• Factors relevant to public interest:
o Administrative difficulties encountered (congested courts);
o Jury duty as a burden imposed upon the community;
o Appropriateness of having the trial in a court that is familiar
with the applicable state law.
• Forum court may NOT resist imposition upon its jurisdiction where:
o The forum is the only state where jurisdiction can be obtained
over the defendant; and
o Some relation with the parties exists; or
o When the forum provides procedural remedies not available
in another state.
Ish Guidote
Bank of America v. Court of Appeals
The Litonjuas obtained several loans from BOA. They purchased four vessels
with the proceeds of the loans, but such vessels were registered in the name
of BOA as trustee. The Litonjuas sued BOA for accounting and damages. BOA
filed a motion to dismiss on the ground of forum non conveniens, but it was
denied by the RTC.
HELD: Denial of the MTD was proper. The doctrine of forum non conveniens
emerged in PrIL to deter the practice of global forum shopping, that is, to
prevent non­resident litigants from choosing the forum or place wherein to
bring their suit for malicious reasons, such as to secure procedural
advantages, to annoy and harass the defendant, to avoid overcrowded
dockets, or to select a more friendly venue. Whether a suit should be
entertained or dismissed depends on the facts of the case and is addressed
to the sound discretion of the trial court. Furthermore, forum non conveniens
not being among the grounds for dismissal in Rule 16, §1 of the ROC, it is
more properly a matter of defense to be raised at trial.
REQUISITES FOR ASSUMPTION OF JURISDICTION:
1. The PH court is one to which the parties may conveniently resort to;
2. The PH court is in a position to make an intelligent decision as to the
law and the facts; and
3. The PH court has or is likely to have power to enforce its decision.
Raytheon International, Inc. v. Rouzie, Jr.
After failing to obtain relief through a labor case, Rouzie filed a civil case for
damages against Raytheon concerning a service contract entered into for the
dredging of rivers affected by the Mt. Pinatubo eruption. Raytheon, a resident
foreign corporation, moved to dismiss on the ground of forum non
conveniens. It claimed that there was a valid choice-of-law clause in the
service contract such that the laws of Connecticut would be applicable. The
RTC denied the MTD. CA affirmed.
HELD: Denial of the MTD was proper. A choice-of-law clause does not
preclude the exercise of jurisdiction by Philippine courts. Jurisdiction
considers whether it is fair to cause a defendant to travel to this state, while
choice-of-law asks the further questions whether the application of a
substantive law which will determine the merits of the case is fair to both
parties.
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2. ASSUME JURISDICTION
• If the court assumes jurisdiction, it may apply forum law or foreign
law.
• When internal law may be applied:
o Specific law of the forum decrees that internal law should
apply;
o Proper foreign law not properly pleaded or proved;
o Case falls under exceptions to the application of foreign law.
Forum law decrees application of internal law
• Civil Code:
o Art. 16 – real and personal property subject to the law of the
place they are situated.
o Testamentary and intestate succession – lex nationale of the
decedent.
o Revocation of will (Art. 829) – law of the place where the will
was made (lex domicilii).
o Prohibition against joint wills (Art. 819).
Foreign law was not properly pleaded and proved
• Courts may not take judicial cognizance of any foreign law.
• Failure to plead and prove foreign law leads to the presumption that it
is the same as forum law.
• Rule 132, §25
• Rule 130, §45
EAP: Why are courts prohibited from taking judicial notice of foreign laws? No
duty is imposed upon them to know such laws. Ignorantia legis non excusat
(NCC3) applies only to Philippine laws.
§24, Rule 132, Rules of Court. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a copy
attested by the officer having the legal custody of the record, or 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
a 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. (25a)
Ish Guidote
Fleumer v. Hix
Edward Hix’s purported will was denied probate by the CFI. Fleumer, special
administrator of his estate, alleged that Hix having executed the will in West
Virginia, the laws of that state should apply. Fleumer submitted an excerpt of
the West Virginia law as certified by the National Library [of the Philippines].
HELD: Foreign law was not properly pleaded and proved. Since our courts are
not authorized to take judicial notice of such laws, they must be proved as
facts. §300 of the Code of Civil Procedure requires proof that the document
was printed or published under the authority of the State of West Virginia. Nor
was the extract attested by the certificate of the officer having charge of the
original, under the seal of the State of West Virginia, as provided in §301.
Finally, no evidence was introduced to show that the extract from the laws of
West Virginia was in force at the time the alleged will was executed.
Philippine Trust Co. v. Bohanan
The court previously admitted to probate a will of the deceased Bohanan, a
citizen of Nevada. During one of the hearings on the proposed project of
partition, Bohanan’s widow and children challenged the validity of the will on
the ground of preterition. Nevada law gives the testator complete freedom to
dispose of all his properties by will. Such law was not produced before the
court in the proceedings relating to partition, but was earlier presented on two
occasions.
HELD: The court may take judicial notice of the law of Nevada. PTC as
executor of the will already presented it during the probate proceedings,
where Bohanan’s widow and children were present. They did not contest the
pvosisions of the law.
EAP: When can the court apply foreign law?
1. When there is no law saying that forum law should apply; AND
2. Foreign law is properly pleaded and proved.
Foreign law cannot be applied
1. When the foreign law is contrary to an important public policy of the
forum;
2. When the foreign law is penal in nature;
3. When the foreign law is procedural in nature;
4. When the foreign law is purely fiscal or administrative in nature;
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 5. When the application of the foreign law will work undeniable injustice
to the citizens of the forum;
6. When the case involves real or personal property situated in the
forum;
7. When the application of the foreign law might endanger the vital
interest of the state; and
8. When the foreign law is contrary to good morals.
Chapter V
CHOICE OF LAW
A. THE CORRELATION BETWEEN JURISDICTION AND CHOICE OF LAW
• Relationship:
o First, the factors that will justify the forum court’s exercise of
judicial jurisdiction are the same ones that will determine
WoN it is proper for the forum to apply its own internal law.
o Second, if the forum applies its internal law on account of its
real interest in the case, then the outcome will be
predetermined by the forum where the suit is brought.
! Practical effect: plaintiff will bring suit in a state
which has a real interest in applying its internal law.
o Third, since in practice the forum is more likely to apply
internal law, the plaintiff will predictably bring his claim in a
state where the provisions of internal law are more favorable
to him.
• Distinction:
o There are cases over which the forum may exercise
jurisdiction but will not apply its own law.
o There are cases over which the forum has no jurisdiction,
although its internal law may be applied as the proper law.
B. APPROACHES TO CHOICE OF LAW
• Two important questions:
1. What legal system should control a case where some of the
significant facts occurred in two or more states?
2. To what extent should the chosen legal system regulate the
situation?
• Theories should advance both notions of justice and predictability,
but they do not always do so.
o Problem arises as to which of these two values must be
stressed.
• Traditional approach – those which emphasize:
Ish Guidote
o Simplicity;
o Convenience; and
o Uniformity.
• Modern approach – those which relate to “reaching appropriate
results in particular cases” (Von Mehren and Trautman).
1. TRADITIONAL APPROACH
Vested Rights Theory
• Choice of law rules:
o Are simple in form;
o Are capable of easy administration;
o Would promote uniformity of result;
o Enhance predictability; and
o Discourage forum shopping.
• Beale locates source of choice of law rules in a normative system that
is not confined to the law of one specific state.
• Under this theory, an act done in a foreign jurisdiction gives rise to the
existence of a right if the laws of that state provide so.
• Forum – law of the place of occurrence of the “last act” necessary to
complete the cause of action.
o If the laws of the last state create no legal right, there is
nothing for the forum to recognize and enforce.
• The law of the state of the “last act” is considered the law applicable
to all substantive issues of the case.
Gray v. Gray
The Grays were residents of New Hampshire. They met an accident while
driving in Maine. Mrs. Gray sued her husband before a New Hampshire court.
In Maine, spouses cannot sue one another.
HELD: Mrs. Gray cannot maintain the suit against her husband. The lex loci
governs with respect to the legal effect and incidents of acts. Thus, any
defense available to the parties in Maine is also available in New Hampshire.
Mrs. Gray argues Maine law merely prevents suits between spouses, and that
it does not make the act complained of an innocent one. This is incorrect, as
the rule is actually broader. Under the laws of Maine, the act complained of
does not give rise to a cause of action. Local conduct should be governed by
local law.
Page 13 of 107
 Alabama Great Southern Railroad Co. v. Carroll
Carroll was a resident of Alabama and an employee of petitioner. While in
Mississipi, he met an accident due to the negligence of his fellow employee in
failing to spot a defective link between two freight cars. Carroll brought suit
against the railroad company in Alabama. Mississipi law does not recognize
liability of an employee to a “fellow servant.”
HELD: The suit may not be maintained in Alabama. There can be no recovery
in one state for injuries to a person sustained in another, unless the infliction
of the injuries is actionable under the law of the state in which they were
received. There is no authority in support of Carroll’s proposition that
Alabama is the state of the wrong because his co-employee’s negligence
transpired there.
EAP: Why don’t we consider the law of the place where the employer-
employee contract is entered into? Because the cause of action is based on
tort.
• In Gray, even though Maine’s relation to the spouses was solely that it
was the place where the accident occurred, the court automatically
applied the law of the place of the wrong thereby rejecting a choice of
law method based on “reason, justice and expediency.”
o Look at the rationale behind Maine law on spousal incapacity
to sue. What were the policy considerations? To prevent
domestic controversy? If so, why should it be allowed in New
Hampshire?
o Problems of family relations should be governed by the
personal laws of the parties.
• Main weakness of the vested rights theory: failure to resolve conflicts
cases with reference to considerations of policy and fairness.
• In Carroll, Mississippi law was applied at the expense of arriving at a
just result.
o Strict application of the law of the place of the wrong was
counterintuitive and arbitrary.
• Salonga: five major defects of the theory—
1. It is not the foreign law but the rights acquired under it which
are enforced by the courts of another country – there is a
self-delusion of reasoning.
2. Not all rights acquired under foreign law are protected
elsewhere, nor is their protection always desirable.
Ish Guidote
3. Protection of rights and interests is not the only
consideration to be taken into account.
4. Law protects not only vested rights, but also foreign legal
relationships, capacities or powers out of which rights, or the
extinction of duties and charges or the invalidity of acts may
arise.
5. It is difficult and impracticable to apply the theory where the
material aspects of a transaction or event touch two or more
states equally.
• Criticism of Beale’s basis: despite being a positivist, he relied on his
own a priori theories instead of on judicial decisions.
• This approach is rigid, but some courts still follow it because of the
uncertainty of the policy-oriented approaches.
Local Law Theory
• Walter Wheeler Cook rejected “deduction from general principles as a
means to ascertain positive law.”
• Proposal: unearth rules by looking at the cases and other concrete
phenomena, including the behavior of judges.
• Observations:
o First, the power of a state to regulate within its own territory
has no limitation, except such as may be imposed by its own
positive law.
o Second, in conflict of laws problems, the court does not
enforce a foreign right but a right created by its own law by
treating a case as a purely domestic case that does not
involve a foreign element.
• Result: law applied may not be exactly as what a foreign court may
have enforced.
• Criticism: practical and equitable considerations may be overlooked
in favor of an exercise of sovereignty.
Cavers’ Principles of Preference
• Choice of law should be determined by considerations of justice and
social expediency.
o Not a result of the mechanical application of a rule or
principle of selection.
• In determining whether to apply forum or foreign law, the court
should:
1. Scrutinize the event or transaction giving rise to the issue
before it;
Page 14 of 107
 2. Compare carefully the proffered rule of law and the result
which its application might work in the case at bar with the
rule of the forum; and
3. Appraise these results from the standpoint of justice between
the litigants or of those broader considerations of social
policy which conflicting laws may evoke.
• Using this framework, we can successfully set aside the stifling
effects of ensuring certainty and uniformity above all other
objectives.
• Choice of law decisions should be made with reference to principles
of preference which are conceived to:
o Provide fair accommodation to conflicting state policies; and
o Afford fair treatment to the parties who are caught up in the
hazards between conflicting state policies.
• This theory shows a “territorialist bias”—looks to the place where
significant events occurred or where the legal relationship is
centered.
2. MODERN APPROACHES
Place of the Most Significant Relationship
• Reese: plurality of factors must be considered, not just where the last
act occurred.
• Principles considered:
o Needs of the interstate and international system;
o Relevant policies of the concerned states;
o Relevant policies of the other interested states and the
relative interest of those in the determination of the particular
issue;
o Protection of the justified expectations of the parties;
o Basic policies underlying the particular field of law;
o Certainty, predictability and uniformity of result; and
o Ease in the determination and application of the law to be
applied.
• Factual contacts of each state must be considered.
• Contacts differed in each area of substantive law.
o Torts
! Where the injury occurred;
! Where the negligent conduct occurred;
! Domicile, residence or nationality of the parties; and
! Place where the relationship between the parties is
entered.
Ish Guidote
o Contracts
! Law chosen by the parties and in the absence
thereof; nu
! Place where the contract was entered into;
! Place where it was negotiated;
! Place of performance; and
! Domicile, residence, nationality, place of
incorporation and place of business of the parties.
o In both torts and contracts cases, contacts are evaluated
depending on their relative importance and relevance to the
issue at hand.
Auten v. Auten
The Autens were residents of England. In 1931, Mr. Auten left his wife and two
children and moved to New York. Mrs. Auten later went to New York and
there, the spouses executed a “Separation Agreement” which provided for
support, separation of bed and board, and an undertaking on the part of Mrs.
Auten not to file for legal separation. Mr. Auten failed to give support, thus,
Mrs. Auten filed two suits: legal separation in England and specific
performance in New York. Applying New York law, the court in the latter case
ruled in favor of Mr. Auten, as Mrs. Auten breached the Separation Agreement
by filing a case for legal separation.
HELD: It is English law which should be applied. Under the “Center of Gravity”
or the “Grouping of Contacts” Theory, instead of regarding as conclusive the
parties’ intention or the place of making or performance, emphasis is placed
upon the law of the place “which has the most significant contacts with the
matter in dispute.” Here, England has all the significant contacts. The
contract was entered into by two British subjects who were married in
England, had children there, and lived there as a family for 14 years. The wife
and children remained in England, and payment was to be made in English
currency.
Haag v. Barnes
Barnes, an Illinois lawyer, had an illegitimate child with Haag, a New York
legal secretary. They entered into an agreement in Chicago providing for
support for the child. The agreement contained a choice-of-law clause in
favor of Illinois. Haag sued Barnes before a New York court. Under the laws of
that state, only judicially-approved agreements between parents of
illegitimate children may be enforced.
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HELD: Illinois law should apply. First, the parties clearly provided that Illinois
law governs. Second, the agreement was executed in Illinois (lex loci
contractus). Finally, Illinois is the jurisdiction which has the most significant
contacts with the matter in dispute. Both parties are listed as residents of
that state, defendant’s business is in Illinois, the child was born there, the
parties’ respective lawyers are licensed in Illinois, and all contributions for
support are being made from Chicago. It cannot be gainsaid that the “center
of gravity” of this agreement is Illinois and that, absent compelling public
policy to the contrary, Illinois law should apply.
• Interchangeable terms:
o State of the most significant relationship (Restatement 2d);
o Center of gravity (Auten);
o Place which has the most significant contacts (ibid);
o Grouping of contacts (ibid).
• Auten did away with automatic application of:
o Law where the contract was made; and
o Law of the location of the trustee to whom payments were to
be made.
• Instead, it considered all relevant contacts.
• Curiously, in Haag, the center of gravity was the man’s home in
Chicago.
o Was the court consistent, or was there a manipulation of the
contacts?
• Criticism of the “most significant relationship” approach: it can be
manipulated to achieve virtually any result.
Interest Analysis
• Prof. Currie attacked the Auten decision for its failure to provide any
standard to determine which contacts are significant.
• The interest analysis approach urged the resolution of choice-of-law
problems by looking at:
o The policy behind the laws of the involved states; and
o The interest each state had in applying its own law.
• Factual contacts not sufficient—they must reflect a state policy which
would be advanced by application of the substantive state law.
• Then, the court determines whether both states had a real interest in
having their law applied. If yes, then there is a true conflict.
o If not, there is a false conflict—forum court applies
substantive law of the interested state.
Ish Guidote
Babcock v. Johnson
Babcock and the Johnsons were residents of New York. While on a weekend
trip to Ontario, Mr. Johnson lost control of the car and got into an accident.
Babcock sustained injuries. She filed suit against Mr. Johnson in New York.
Johnson moved to dismiss on the ground that Ontario law governs this case.
Such law does not allow a guest to recover damages from the driver unless
the latter is engaged in business as a common carrier.
HELD: New York law applies. New York has the most significant relationship
with the parties. They reside in the state and the vehicle involved was
garaged, licensed and insured in New York. On the other hand, the only
connection with Ontario was that the accident occurred there. Ontario has no
real interest in having its own law applied, because the policy behind its guest
statute is to prevent collusion among parties and fraud against insurers.
Dissent: Grouping of contacts is inapplicable to torts. New York law cannot be
applied because that would be tantamount to giving it extraterritorial effect.
EAP: For issues related to standards of conduct, the applicable law is the law
of the place where the tortious conduct is committed.
• Babcock:
o Application of NY law advances policy of such law, while
o Non-application of Ontario law did not impair that law’s
policy.
• Ehrenzweig: rejected the interest analysis approach
o Conflicts cases are ordinarily concerned with private, not
governmental interests.
• Reese: method unworkable
o Decision of each case done on an ad hoc basis because
courts will have to ascertain the purposes of each applicable
local law rule.
• Difficulty: court must look into the purpose of a law in question before
deciding whether it should be applied.
o Fear of armchair speculation of the policy of another state’s
law.
o Not all laws reflect policy.
o Some laws have no purpose other than to decide cases.
! Ex. Provisions on interpretation of documents
Page 16 of 107
Comparative Impairment
• Offshoot of the interest analysis approach.
• Proposed by Baxter.
• Called for the subordination of the state objective which would be
least impaired.
• Courts are to weigh conflicting interests and apply the law of the
state whose interests would be impaired if its law were not followed.
o Look behind an apparent conflict to the precise issue and the
precise interest of each state.
Functional Analysis
• Developed by Trautman and Von Mehren.
• Determine the “concerned jurisdiction” or interested state.
• Look into general policies of the state:
o Beyond those reflected in substantive law; and
o To policies and values relating to effective and harmonious
intercourse between states.
! Reciprocity
! Advancement of multistate activity
! Protecting justifiable expectations
! Evenhandedness in dealing with similar cases
! Effectiveness
• Policy-weighing – consider the relative strength of a state policy.
• Milliken v. Pratt
o Daniel Pratt was a resident of MA, under the law of which a
spouse cannot be the surety of the other spouse.
o Sarah, his wife, applied for credit from Milliken & Co. in Maine.
Milliken insisted on a guaranty from Daniel.
! Guaranty executed.
o Upon default, Milliken sued Daniel on the guaranty in Maine.
o HELD: Daniel is liable.
! Contract was complete when Milliken received
Daniel’s guaranty.
! Milliken extended credit on the strength of this
guaranty.
! Place of contracting was Maine.
o Analysis:
! Restrictive policy on the right of married women was
on the wane in MA.
! Rule in force at the time was not based on a “strongly
held policy.”
Ish Guidote
! Consider whether the law reflects an “emerging” or
“regressing” policy.
Choice-Influencing Considerations
• Leflar proposed five:
1. Predictability of results;
2. Maintenance of interstate and international order;
3. Simplification of the judicial task;
4. Application of the better rule of law; and
5. Advancement of the forum’s governmental interests.
• Contrasted with interest analysis—the latter applies a particular rule
of substantive law in order to implement a policy reflected therein.
• Courts will prefer rules of law as long as they make “good
socioeconomic sense for the time the court speaks” and are sound in
view of present day conditions.
o No principled and objective standards to determine what law
is superior.
o In practice, courts have almost always considered its own law
as the better law.
Chapter VI
THE PROBLEM OF CHARACTERIZATION
A. CHARACTERIZATION AND THE SINGLE-ASPECT METHOD
• Single-aspect method – when choice-of-law theories focus on one
element of a situation in order to connect the case to a particular
legal community.
o Example: issue related to a contract is referred to the place
where it was executed, or torts cases are assigned to where
the torts took place.
o Goal: simplicity, uniformity and convenience of results.
• Multi-aspect method – modern approach where all important factors,
both territorial and non-territorial, are analyzed.
o Applicable law arrived at by “rationally elaborating and
applying the policies and purposes underlying the particular
legal rules that come in question as well as the needs of
interstate or international intercourse.”
o Goal: to reach a just resolution of the case at hand.
• The Philippines follows the single-aspect method, thus the Civil Code
provides:
Article 15. Laws relating to family rights and duties, or to the status,
Page 17 of 107
 condition and legal capacity of persons are binding upon citizens of
the Philippines, even though living abroad. (9a)
Article 16. Real property as well as personal property is subject to the
law of the country where it is situated.
However, intestate and testamentary successions, both with respect
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is
under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found. (10a)
Article 17. The forms and solemnities of contracts, wills, and other
public instruments shall be governed by the laws of the country in
which they are executed.
When the acts referred to are executed before the diplomatic or
consular officials of the Republic of the Philippines in a foreign
country, the solemnities established by Philippine laws shall be
observed in their execution.
Prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country. (11a)
• The provisions specify the geographical location from where the
governing law is found.
• Difficulty in following them is in the inherent rigidity and unjust
decisions that may result from their application.
o Solution: resort to “characterization” and renvoi.
1. SUBJECT-MATTER CHARACTERIZATION
• Characterization – the process by which a court at the beginning of
the choice-of-law process assigns a disputed question to an area of
substantive law, such as torts, contracts, family law or property.
o Process that forms part of legal analysis.
o Characterization becomes a problem because there are at
least two jurisdictions with divergent laws involved.
Ish Guidote
• In subject-matter characterization, the court classifies the factual
situation into a legal category.
o Relevant to the single-aspect method because the legal
category to which the issue belongs determines the
applicable law.
Gibbs v. Government of the Philippine Islands
Eva Johnson and Allison Gibbs were spouses and citizens of California. They
owned three parcels of land in Manila. Upon Eva’s death, Allison petitioned to
be declared the sole owner of the three lots citing the California Civil Code.
The Register of Deeds refused to issue a certificate of title in his name
invoking the Revised Administrative Code which requires the payment of
inheritance tax.
HELD: The inheritance tax must first be paid. Under Art. 10 of the Old Civil
Code, real property is governed by the country in which it is situated (lex rei
sitae). Following Philippine law, the property is conjugal in nature. Upon Eva’s
death, her half was transmitted to her heirs by virtue of inheritance. This
transmission plainly falls within the language of the Revised Administrative
Code.
EAP: This case was characterized as one of property instead of succession.
• Court never specifically mentioned the problem of characterization,
but it had to make a determination whether the issue was one
involving real property which would be governed by lex rei sitae, or
succession, which would be governed by the national law of the
decedent.
• Problems confronting characterization:
o Filipino child adopted in the PH by a former Filipino who
moved to the US. Adopter dies. What law governs the child’s
capacity to succeed intestate?
! If it is an adoption issue, governing law is PH law
because that is where the adoption decree was
granted.
! If it is a succession issue, the decedent’s national law
is controlling.
o Agent acting abroad on behalf of principal commits a
negligent act.
! If it is an agency issue, liability determined by laws of
the place where the contract was entered into.
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 ! If it is a tort issue, where the tort took place.
2. SUBSTANCE-PROCEDURE DICHOTOMY
• Directs the court to the extent that it will apply foreign law.
o Substantive – may apply foreign law.
o Procedural – supposed to apply forum law.
• Rationale:
o Rights and duties of parties should not be substantially
varied because of the forum in which an action is brought to
settle disputed questions arising out of the situation.
o International commerce would not develop if parties are
frequently exposed to the hazards of unknown requirements
of foreign laws.
o Reference to foreign law is appropriate to protect parties
against a substantial change of position because of the
fortuitous circumstance that suit is brought in that particular
state.
o Theoretically: foreign law would govern both the existence of
the rights and duties of the parties as well as the means of
compulsion to enforce performance by the defeated party.
! Impossible in many instances. Heavy burden upon
the courts and delay in the orderly administration of
justice.
o Thus, need to limit the scope of the reference to foreign law.
! Administration of foreign law – usually, procedural
rules of the forum are applied.
Grant v. McAuliffe
Plaintiffs were injured when their vehicle collided with another driven by
Pullen. The accident took place in Arizona. After Pullen’s death, plaintiffs filed
a claim against his estate, of which McAuliffe was the administrator. The
claim was filed in California. The court dismissed the case citing Arizona law
which states that actions for tort do not survive the death of the tortfeasor.
California law provides otherwise.
HELD: The case should be reinstated. The survival statutes are procedural in
nature, hence, they are governed by forum law. Survival is not an essential
part of the cause of action itself but relates to the procedures available for the
enforcement of the legal claim of damages. The question is one of the
administration of decedents’ estates, which is a purely local proceeding.
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• Reaction to Grant was, on the whole, negative.
o Greatly influenced by sympathy factors.
o Another view is that it was the correct result arrived at using
a dubious method.
o Currie:
! Different characterization produced the result that
had previously been recognized as the sound one.
! It is a far from ideal way of dealing with such
situations.
! Courts should state explicitly the considerations that
led them to determine what the result should be, and
indicate how these considerations will be appraised
in other cases.
• Procedural laws are governed by forum law because the court should
not be burdened with the study of uncommon peculiarities and
refinements of another legal system.
o But sometimes procedure and substance are so closely
related that a refusal to accept a foreign rule will defeat the
policy involved in the foreign substantive law.
Statute of Frauds
• Considered substantive if the words of the law relate to forbidding the
creation of an obligation.
• Considered procedural if it forbids the enforcement of the obligation.
Article 1403. The following contracts are unenforceable, unless they
are ratified:
(1) Those entered into in the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in
this number. In the following cases an agreement hereafter made
shall be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot
be received without the writing, or a secondary evidence of its
contents:
(a) An agreement that by its terms is not to be performed
within a year from the making thereof;
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(b) A special promise to answer for the debt, default, or
miscarriage of another;
(c) An agreement made in consideration of marriage, other
than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in
action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or
the evidences, or some of them, of such things in action or
pay at the time some part of the purchase money; but when a
sale is made by auction and entry is made by the auctioneer
in his sales book, at the time of the sale, of the amount and
kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it
is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one
year, or for the sale of real property or of an interest therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a
contract.
• Marie v. Garrison:
o Garrison: rule affects the remedy upon a contract, hence a
procedural law.
o Marie: rule affects the very existence of the contract, hence a
substantive law.
o HELD: Substantive law. Law provides that the contract of sale
of any interest in land shall be VOID unless it was in writing.
! Compare to other laws which state “no action shall
be brought”—means it is unenforceable.
Statutes of Limitations and Borrowing Statutes
• Traditionally considered procedural because affected only the legal
remedy and not the substantial right involved.
o Suit could still be brought in another jurisdiction with a longer
statute of limitations.
• Certain statutes of limitations have been classified as substantive if:
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o They provide a certain shorter period for certain kinds of
claims,
o That fall within a wider classification covered by a general
statute of limitations.
• To eliminate forum shopping, may states have passed borrowing
statutes which bar the filing of a suit in the forum if it is already
barred by the statute of limitations in the place where the cause of
action arose.
Cadallin v. POEA Administrator
Cadallin, et al. were recruited by AIBC for employment with BRII, a Texas
corporation. They were employed in Bahrain. Plaintiffs filed a class suit for
money claims with the POEA. The claims were initially granted, but the NLRC
reversed holding that plaintiffs’ claims have already prescribed, citing Amiri
Decree No. 23 (one-year prescriptive period).
HELD: The action has not prescribed. GENERAL RULE: Foreign procedural law
will not be applied in the forum. This is true even if the action is based upon
foreign substantive law. EXCEPTION: A law on prescription of actions
is sui generis in Conflict of Laws in the sense that it may be viewed either as
procedural or substantive, depending on the characterization given such a
law. EXCEPTION TO THE EXCEPTION: Characterization becomes irrelevant
when the forum state has a borrowing statute, such as §48 of the Code of
Civil Procedure. Such a statute directs the state of the forum to apply the
foreign statute of limitatins to the pending claims based on a foreign law. §48
provides that “If by the laws of the state or country where the cause of action
arose, the action is barred, it is also barred in the Philippine Islands.” Hence,
the one-year prescriptive period under the Bahrain law applies. However, it
cannot be enforced in view of the Constitutional policy affording full
protection to labor.
LWV Construction Corporation v. Dupo
Dupo was based in Saudi Arabia where he worked for MMG. His contract was
renewed 5 times. Upon his return to the Philippines he filed a complaint with
the NLRC for payment of service award/longevity pay. LA granted the money
claims, affirmed by NLRC and CA. Petitioner claims that Dupo’s action has
prescribed, invoking the one-year prescriptive period under the Saudi Labor
Law.
HELD: The action has not prescribed, following the doctrine in Cadallin.
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B. DÉPEÇAGE
• Dépeçage – from the French “depecer” meaning “to dissect”
o Phenomenon where different aspects of a case involving a
foreign element may be governed by different systems of
laws.
• Von Mehren & Trautman: man dies intestate, domiciled in A with
movables in B.
o A law: laws of the domicile determine how estate should be
divided.
o B law: gives widow a share in the estate.
o If the question is WoN the woman claiming the widow’s share
is such a “wife,” it is a question for family law and not
succession.
o Questions involving movable properties and successional
rights “embody the substance of the claim,”
o Questions involving the validity of the marriage to the
deceased “affects the solution because it answers a
preliminary or incidental question.”
• A single element of a case is made to relate to one legal system.
o Technique allows relevant interests of the parties to be
addressed.
o Courts arrive at a functionally sound result.
EAP:
• Dépeçage is the result of issue-by-issue analysis.
• Applying dépeçage to the situation in Babcock:
o Capacity to sue – governed by New York law;
o Negligence – governed by Ontario law.
• But is it even applicable? NO, because there was only one issue in
that case.
Haumschild v. Continental Casualty
Haumschild and Gleason were spouses and residents of Wisconsin. They
later got an annulment. Haumschild sustained injuries while riding in a motor
truck driven by Gleason in California. She sued Gleason before a Wisconsin
court. Gleason moved for summary judgment, invoking California law which
provides for interspousal immunity.
HELD: It is Wisconsin law, not California law, which applies. There are two
rules for interspousal immunity. First is the ancient concept that husband and
wife constitute one person in law, and second is that to permit suits between
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spouses would be to foment family discord and strife. The policy reason for
denying the capacity to sue more properly lies within the sphere of family law,
where domicile usually controls the law to be applied, than it does tort law,
where the place of injury generally determines the substantive law which will
govern. Thus, whenever courts are confronted with a conflict-of-laws
problem as to which law governs the capacity of one spouse to sue the other
in tort, the law to be applied is that of the state of domicile.
• Law of the place of the accident (California) governed the issue of
negligence.
• Law of the domicile of the parties (Wisconsin) governed the issue of
interspousal immunity.
• Characterization was not limited to the case itself but to the
individual issues arising from such case.
• 1969 Restatement 2d adopted dépeçage and set out the following
factors:
1. Needs of interstate and international system;
2. Relevant policies of the forum;
3. Relevant policies of other interested states and the relevant
interests of those states in the determination of a particular
issue;
4. Protection of the justified expectations of the parties;
5. Basic policies underlying the particular field of law;
6. Certainty, predictability and uniformity of results; and
7. Ease in the determination and application of the law to be
applied.
• Consideration of these factors helps ease the restrictions of the
single-aspect method.
o Application of which might lead to egregious results.
• Cutting up the case into issues and applying pertinent laws thereto
allows the court to reach a decision that is fair and desirable.
• Explicit reference to dépeçage in case law is still uncommon.
Chapter VII
THE PROBLEM OF RENVOI
A. DEFINITION
• Renvoi – a procedure whereby a jural matter presented is referred by
the conflict of laws rules of the forum to a foreign state, the conflict of
laws rules of which, in turn, refer the matter to the law of:
o The forum (remission); or
o A third state (transmission).
Page 21 of 107
 • Use of renvoi has not received worldwide acceptance.
o In jurisdictions where it has been applied, used
domiciliary/national laws to decide problems of succession,
domestic relations and real property.
o US courts rarely look at conflicts rules of other states.
Instead, they look at the law which the foreign court would
apply if the case were a purely domestic one.
! UCC – “whole” law of a foreign state.
! Restatement 2d – also encourages use of renvoi.
B. VARIOUS WAYS OF DEALING WITH THE PROBLEM OF RENVOI
(GRISWOLD)
1. If the conflicts rules of the forum refer the case to a foreign state, it is
deemed to mean only the “internal” law of that state.
o Internal law – that which the state would apply to a purely
domestic case.
2. Court may accept the renvoi and refer not just to the foreign state’s
“internal” law but to the “whole law,” including the choice-of-law rules
applicable in multi-state cases.
Aznar v. Garcia
The testator, Edward Christiansen, was a citizen of California but a resident of
the Philippines. He died leaving behind two daughters, Helen and Lucy. Helen
was given P3,600 by way of legacy. During the proceedings for partition of
Edward’s estate, it was proposed that the remainder be given to Lucy. Helen
opposed invoking impairment of her legitime under the provisions of the New
Civil Code. The trial court approved the project of partition citing the decision
in In Re Kaufman—California law governs successional rights and intrinsic
validity, and provides for no legitimes.
HELD: Philippine law, not California law, is applicable as regards intrinsic
validity. California’s conflicts rule is embodied in Art. 946 of its Civil Code,
which provides that the domiciliary law of the person is applicable. Since
NCC16 refers the issue to national law, and that law in turn refers back to
domiciliary law, the laws of the Philippines apply. The project of partition is
therefore invalid.
EAP: In this case, the court accepted renvoi.
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• What would have happened had the court rejected renvoi?
o The dispositions would have been upheld because California
law does not provide for legitime.
o On the other hand, our Civil Code provides:
Article 887. The following are compulsory heirs:
(4) Acknowledged natural children, and natural children by
legal fiction;
Article 894. If the testator leaves illegitimate children, the
surviving spouse shall be entitled to one-third of the
hereditary estate of the deceased and the illegitimate children
to another third. The remaining third shall be at the free
disposal of the testator. (n)
NO RENVOI
F2
F1 SI NGLE RENVOI • Domestic/internal law
• Conflicts rule
DOUBLE RENVOI
3. Desistance or mutual disclaimer of jurisdiction
o The forum court, upon reference to foreign law, sees that
such law only applies to its own nationals and has no
provision for application to a non-national.
o Same result as acceptance of renvoi but with a different
approach—court desists applying foreign law.
4. “Foreign court” Theory
o If applied to Aznar, the PH court would assume the same
position as the US court would take had the case been
litigated in the US.
! If US law is used by the US judge, then the PH judge
must also use US law, and vice versa.
Page 22 of 107
 • Disadvantage of renvoi: If both courts follow it, there would be no end
to the case.
o “Revolving doors”
o “Game of lawn tennis”
o “Logical cabinet of mirrors”
o “Circulus inextracabilis”
Annesley, Davidson v. Annesley
The testatrix was a British subject residing in France. Under English law, she
was already a domiciliary of France, but under French law, she was not. Her
will (executed in France) disposed of all of her property in favor of her
daughter. It also provided that the testatrix had not abandoned her domicile in
England. Under French law, only 1/3 of the estate could be disposed of law by
will.
HELD: At the time of her death, the testatrix was a resident of France. French
municipal law provides that the applicable law in the distribution of a
foreigner’s estate is the decedent’s national law. Thus, British law applies.
However, such law provides that what should be applied is the law of the
domicile (French law). The court is now confronted with a situation where it
can either (1) apply double renvoi (French law) or (2) accept renvoi (English
law). Applying the foreign court theory, the court decided to use French
municipal law.
• Court applied double renvoi here.
o Case was filed in England, whose conflicts rules referred the
case to France.
o France’s conflict rules referred back to England. Single renvoi
stops here. English municipal law would be applicable.
o But instead, it referred back to France a second time.
C. USEFULNESS OF RENVOI
• US courts do not see it as useful but sometimes apply it to avoid
unjust results.
University of Chicago v. Dater
George Dater and John Price were co-owners of a parcel of land located in
Michigan. Such land was mortgaged as security for a loan obtained by the
Sps. Dater and the Sps. Price. Trust deeds and promissory notes were sent to
Michigan to be signed by the parties, after which, they were mailed back to
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Chicago. Payment was to be made in Chicago. As the borrowers defaulted on
their obligation, plaintiff filed a collection suit in Michigan. Clara Price was
relieved of liability on the ground that she, as a married woman, had no
capacity to contract under Michigan law.
HELD: Clara Price is not liable. The general rule is that the validity, nature,
obligation and interpretation of contracts are governed by the law of the place
of performance. In this case, that is Chicago. However, the conflicts rule of
Chicago, embodied in Burr v. Beckler, provides that the applicable law is the
law of the place where the delivery of the note and trust deed is completed
(Michigan law). The court therefore accepts renvoi and applies Michigan law.
Under such law, married women cannot bind their separate estate through
personal engagement for the benefit of others.
• The use of renvoi in this case protected the interest of a Michigan
wife.
• Promoted uniformity of results despite discrepancies in the choice-
of-law rules in the involved states.
• Applying renvoi meant that the case was decided according to
Michigan law irrespective of the forum court while rejecting it would
have meant application of the Michigan law by the Illinois court and
Illinois law by the Michigan court.
Objections to Renvoi
• Places the court in a “perpetually-enclosed circle from which it could
never emerge.”
o Would never find a suitable body of substantive rules to apply
to a particular case.
• Renvoi is only workable if one of the states rejects it. It achieves
harmony of decisions only if the states concerned do not agree on
applying it the same way.
o Griswold: This is based on a false premise. When remission
occurs, it goes back to the state’s internal law alone—there
will be a stop to the “endless chain of reference.”
o Lorenzen acknowledges renvoi in certain cases for reasons of
necessity and expediency.
o Restatement:
! Title to land – lex situs
! Divorce – domiciliary law
• Courts may be unnecessarily burdened with the task of identifying
conflicts rules of another state.
Page 23 of 107
 o But courts will not use renvoi if, in the first place, they cannot
determine the conflicts rules of another state.
Inapplicabillity of Renvoi in a False Conflict
• Restatement 2d provides for the use of renvoi when there is a
disinterested forum, in order to ensure that only the laws advancing
the policies of the interested states will be applied.
• Pfau: NJ court held that since CT and NJ had identical substantive
laws and the third concerned state, Iowa, had no interest in ensuring
that its law applied, there was false conflict. Renvoi inapplicable.
Pfau v. Trent Aluminum Co.
Trent, a New Jersey resident, agreed to drive Pfau, a Connecticut resident,
from Iowa to Missouri. While still in Iowa, Trent’s car collided with another
causing injuries to Pfau. He sued for damages in New Jersey. Trent pleaded
the Iowa guest statute as a defense, averring that lex loci delicti commissi
applies.
HELD: The Iowa guest statute cannot be applied. Both New Jersey and
Connecticut law allow recovery by a guest for ordinary negligence of the host.
Defendant argues that Connecticut’s choice-of-law rules should also be
applied, such that the governing law is Iowa law. The court cannot apply the
choice-of-law rules. Iowa has no interest in having its law applied in this
case. Hence, there is a false conflict.
Bellis v. Bellis
Amos Bellis was a resident and citizen of Texas. He had 7 legitimate children
and 3 illegitimate children. Amos left a will bequeathing leaving specified
amounts to his illegitimate children. Claiming to have been preterited, they
opposed probate of the will before the CFI of Manila. Texas law does not
provide for legitimes.
HELD: Texas laws apply. There is no occasion to apply renvoi. The doctrine is
usually pertienent where the decedent is a national of one country but a
domiciliary of another. Following NCC16, Texas law applies. Assuming Texas
law states that domiciliary law regulates intrinsic validity of wills, it is still
Texas law which applies. But if Texas follows the lex rei sitae rule, renvoi
would arise because it would refer to Philippine law.
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Chapter VIII
NOTICE AND PROOF OF FOREIGN LAW
A. EXTENT OF JUDICIAL NOTICE
• The party whose cause of action or defense depends upon foreign
law has the burden of proving such law.
o Treated as a question of fact.
o Thus, must be pleaded and proved.
o Rationale: Judge cannot take judicial notice of foreign law;
presumed to know only domestic law.
• GENERAL RULE: A judge cannot decide a case on the basis of his own
knowledge and information.
o Can only act based upon evidence presented before him.
• EXCEPTION: In Delgado v. Republic, the SC held that judicial notice
may be taken of a foreign law with which the court is “evidently
familiar.”
o May be generally known, as in American or Spanish law; or
o Judge may have ruled upon it in other cases.
• In the US, courts can take judicial notice of laws passed by other
states as mandated by the full faith and credit clause of the Federal
Constitution.
o Rationale: to transform several sovereignties into a single,
unified nation.
• Rule 129 provides:
§1. Judicial notice, when mandatory. — A court shall take judicial
notice, without the introduction of evidence, of the existence and
territorial extent of states, their political history, forms of government
and symbols of nationality, the law of nations, the admiralty and
maritime courts of the world and their seals, the political constitution
and history of the Philippines, the official acts of the legislative,
executive and judicial departments of the Philippines, the laws of
nature, the measure of time, and the geographical divisions.(1a)
§2. Judicial notice, when discretionary. — A court may take judicial
notice of matters which are of public knowledge, or are capable of
unquestionable demonstration, or ought to be known to judges
because of their judicial functions.(1a)
§3. Judicial notice, when hearing necessary. — During the trial, the
court, on its own initiative, or on request of a party, may announce its
intention to take judicial notice of any matter and allow the parties to
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 be heard thereon.
After the trial, and before judgment or on appeal, the proper court, on
its own initiative or on request of a party, may take judicial notice of
any matter and allow the parties to be heard thereon if such matter is
decisive of a material issue in the case.(n)
B. PROOF OF FOREIGN LAW
• The following are pertinent provisions of Rule 132, Rules of Court:
§19. Classes of documents. — For the purpose of their presentation
in evidence, documents are either public or private.
Public documents are:
(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country;
xxx
§24. Proof of official record. — The record of public documents
referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or
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 a 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.
(25a)
• It may sometimes be necessary to take depositions of non-residents,
thus Rule 23 provides:
§4. Use of depositions. — At the trial or upon the hearing of a motion
or an interlocutory proceeding, any part or all of a deposition, so far
as admissible under the rules of evidence, may be used against any
party who was present or represented at the taking of the deposition
or who had due notice thereof, in accordance with any one of the
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following provisions:
(a) Any deposition may be used by any party for the purpose of
contradicting or impeaching the testimony of deponent as a witness;
(b) The deposition of a party or of any one who at the time of taking
the deposition was an officer, director, or managing agent of a public
or private corporation, partnership, or association which is a party
may be used by an adverse party for any purpose;
(c) The deposition of a witness, whether or not a party, may be used
by any party for any purpose if the court finds: (1) that the witness is
dead; or (2) that the witness resides at a distance more than one
hundred (100) kilometers from the place of trial or hearing, or is out of
the Philippines, unless it appears that his absence was procured by
the party offering the deposition; or (3) that the witness is unable to
attend or testify because of age, sickness, infirmity, or imprisonment;
or (4) that the party offering the deposition has been unable to
procure the attendance of the witness by subpoena; or (5) upon
application and notice, that such exceptional circumstances exist as
to make it desirable, in the interest of justice and with due regard to
the importance of presenting the testimony of witnesses orally in
open court, to allow the deposition to be used; and
(d) If only part of a deposition is offered in evidence by a party; the
adverse party may require him to introduce all of it which is relevant
to the part introduced, and any party may introduce any other parts.
(4a, R24)
§11. Persons before whom depositions may be taken in foreign
countries. — In a foreign state or country, depositions may be taken
(a) on notice before a secretary of embassy or legation, consul
general, consul, vice-consul, or consular agent of the Republic of the
Philippines; (b) before such person or officer as may be appointed by
commission or under letters rogatory; or (c) the person referred to in
section 14 hereof. (11a, R24)
Philippine Commercial and Industrial Bank v. Escolin
Charles and Linnie Jane Hodges (Texas citizens) had identical provisions in
their respective wills bequeathing the remainder of their estates to the
surviving spouse, subject to the condition that what would be left upon the
Page 25 of 107
death of such spouse would be given to the testator’s siblings. As Mrs.
Hodges predeceased her husband, the latter was appointed executor of her
estate. After Mr. Hodges’ death, Magno was appointed special administratrix
of both estates. PCIB later replaced Magno with respect to Charles’ estate.
The dispute in this case concerns the free portion of Linnie Jane’s estate
which could validly pass to her siblings. Under Philippine law, the surviving
spouse is entitled to legitime consisting of ½ of the decedent’s estate. Texas
law does not provide for legitimes.
HELD: The case must be remanded for determination of the free portion.
Texas law on the matter must be proved as a fact. GENERAL RULE: Foreign
laws must be proven like any other fact. EXCEPTION: Where the laws are
already within the actual knowledge of the court; or they have been actually
ruled upon in prior cases before it and none of the parties concerned claim
otherwise. In any case, PCIB already admitted that the free portion cannot be
less than ½ of Mrs. Hodges’ share in the conjugal partnership, or ¼ of the
entire conjugal estate.
In Re Estate of Johnson
Johnson is of Swedish descent but was naturalized as a US citizen. He
executed a holographic will in Manila with only two witnesses instead of the
three required by the Code of Civil Procedure. When the will was presented for
probate, it was alleged that he was a resident of Illinois and that the will was
executed in compliance with the laws of such state. The testator’s daughter
opposed probate of the will. The will was admitted to probate, the court taking
judicial notice of the Illinois law as exhibited in Starr & Curtis’s Annotated
Illinois Statutes.
HELD: The trial court erred in taking judicial notice of Illinois law. The Code of
Civil Procedure only allows courts to take judicial notice of acts of the United
States Congress, not of the individual state legislatures. The Illinois law
should have been proven just like any other fact. However, such mistake can
no longer be corrected as it was not assigned as an error on appeal. Neither is
it contended that the trial court’s conclusion is erroneous.
Walton v. Arabian American Oil Co.
Walton was a citizen of Arkansas. He met a car accident in Saudi Arabia with
a truck owned by ARAMCO and driven by one of its employees. ARAMCO is a
Delaware corporation with principal office in New York. Walton sued before a
New York court, but he failed to plead or prove Saudi law.
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HELD: Walton cannot recover of ARAMCO. The New York conflicts rule
provides that the substantive law applicable to a tort is the lex loci delicti
commissi. Plaintiff had the burden of proving Saudi law, as foreign law is not
a matter of judicial notice. The exception to this rule is where an American
court takes judicial notice of English law because the former can easily
comprehend English decisions. Here, comprehension of the foreign law is not
easy. While defendant is probably in a better position to know Saudi law,
under the laws of New York, the onus is with the plaintiff.
• Another approach: Conclude that parties who fail to prove foreign law
acquiesce to the application of forum law.
o Forum law is the basic law.
o In the absence of proof of the applicable foreign law, there is
no reason to displace the basic law.
Leary v. Gledhill
While in Paris, Gledhill intimated to Leary that he was in need of $4,000. Leary
returned to Germany and sent Gledhill a check for $1,500. He sued to recover
the money before a New Jersey court. Gledhill moved to dismiss alleging that
the governing law being lex loci contractus, Leary had the burden of proving
French law.
HELD: Dismissal of the case is improper. Absence of proof of foreign law will
not necessarily result in the failure of the plaintiff’s cause of action. Three
presumptions may be indulged in:
1. French law is the same as the law of the forum;
2. French law, like all civilized countries, recognizes certain fundamental
principles; and
3. That the parties, by failing to prove French law, have acquiesced in
having their dispute determined by the law of the forum.
The court applies the third presumption, contrary to the action of the lower
court which applied the second. The difficulty with the second presumption is
that it is hard to determine whether or not the question presented was of such
a fundamental nature as to reasonably warrant the assumption that it would
be similarly treated by the laws of all civilized countries. No similar difficulty
obtains with the third presumption.
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 Zalamea v. Court of Appeals
The Zalameas bought three tickets for a TWA flight from New York to Manila.
Mrs. Zalamea and daughter were bumped off despite having confirmed seats.
Upon their return to Manila, they filed a complaint for damages based on
breach of contract of carriage. The RTC ruled for plaintiffs but the CA reversed
ratiocinating that overbooking is an allowed practice among US airlines and
that there was no bad faith on the part of TWA.
HELD: The Zalameas are entitled to both moral and exemplary damages. The
CA’s conclusion that overbooking is an allowed practice has no basis in fact
because the only proof on this matter is the statement of a TWA employee to
the effect that the Code of Federal Regulations of the Civil Aeronautics Board
allows overbooking. Assuming arguendo that overbooking is allowed, TWA
would still be liable because following lex loci contractus, Philippine law
applies.
• Presumed-identity approach/processual presumption: Presume that
foreign law is the same as forum law.
Miciano v. Brimo
Joseph Brimo, a Turkish citizen, executed a will in the Philippines. Miciano
was appointed administrator of his estate. Miciano filed a project of partition
which was opposed by Andre Brimo, the testator’s brother. He alleged that
some of the dispositions in the will were violative of Turkish law. However, he
never presented proof of such law.
HELD: The provisions are not violative of Turkish law. Under Art. 10 of the Old
Civil Code, the intrinsic validity of will shall be determined by the national law
of the person whose succession is in question. It was incumbent upon Brimo
to present proof of the applicable Turkish law on the matter. In the absence of
evidence of such laws, they are presumed to be the same as those of the
Philippines. Anent the condition in the testator’s will that his properties
should be distributed in accordance with Philippine law, the court finds the
same to be void for violating Art. 10 of the Old Civil Code.
EAP: In this case, the court disregarded the testator’s clear choice to use
Philippine law.
• If we were to use the most significant relationship approach,
Philippine law would still apply because:
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o Decedent was a resident of the Philippines;
o He executed his will in the Philippines;
o Property forming part of his estate was located in the
Philippines;
o He intended Philippine law to govern the disposition of his
estate.
• Using characterization, the Court could have characterized the case
as one involving property, not succession, such that the rule of lex rei
sitae would be applicable.
o End result would be the same—Philippine law applies.
Suntay v. Suntay
Federico Suntay was a Filipino who died in China in 1934. Two alleged wills
were presented for probate: one executed in 1929 and another in 1931.
Silvino, a child of the decedent, alleged that the 1931 will had previously been
filed, recorded and probated before a court in Amoy, China.
HELD: The will cannot be probated. The following must be proved as facts:
1. That the district court in Amoy is a probate court;
2. The procedural law of China in the probate of wills; and
3. The legal requirements for the execution of a valid will in China in
1931.
No proof was presented on any of these points. As such, it may be presumed
that the proceedings in the matter of probating a will in the Chinese courts are
the same as those provided for in our laws on the subject.
Collector of Internal Revenue v. Fisher
The spouses Stevenson were British nationals who were married in the
Philippines. In Mr. Stevenson’s will, he instituted his wife as his sole and
universal heir. Upon his death, the administrator of his estate filed an
inheritance tax return. The CIR assessed the estate for deficiency taxes
claiming that under English law, all of the properties acquired during the
marriage belong exclusively to the husband. Thus, the taxable net estate is
the whole of Mr. Stevenson’s estate (no conjugal partnership). The Court of
Tax Appeals held that inasmuch as the spouses were married in the
Philippines, the system of conjugal partnership of gains applies.
HELD: The spouses’ property relations are governed by English law. However,
the law which allegedly vests on the husband full ownership of the properties
acquired during the marriage has not been proven by the CIR. In the absence
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of proof, the court is justified in indulging in “processual presumption,” in
presuming that the law of England on the matter is the same as [Philippine]
law.
Board of Commissioners (CID) v. Dela Rosa
The CID instituted deportation proceedings against William Gatchalian. It
claims that the marriage of his parents and grandparents, alleged to have
taken place in China, were not duly proven. Thus, he is an illegitimate child
whose citizenship follows that of his mother (Chinese).
HELD: William is a Filipino citizen, hence, he cannot be deported. The CID
failed to present the Chinese law on marriage. In the absence of proof of
foreign law, it is presumed to be the same as the Philippine law on the matter.
The Philippines adheres to lex loci celebrationis—a marriage formally valid
where celebrated is valid everywhere. Also, the presumption is in favor of
validity of the marriage (NCC220). The burden was on the CID to prove the
invalidity of the marriages in this case.
• Factors to be considered in determining whether to apply domestic
law or decide the case against the party who has the burden of
proving foreign law:
1. Public interest involved in the dispute;
2. Accessibility of foreign law materials to the parties;
3. Possibility that the plaintiff is merely forum shopping; and
4. Similarities between forum and foreign law on the issue in
point.
• It is more likely that forum law will not be applied except in some
cases involving marriage and family relations.
C. EXCEPTIONS TO THE APPLICATION OF FOREIGN LAW
• Three main categories:
1. When the local law expressly so provides;
2. When there is failure to plead and prove the foreign law or
judgment; and
3. When the case falls under any of the exceptions to the rule of
comity.
• Some exceptions are in NCC17:
xxx
Prohibitive laws concerning persons, their acts or property, and those
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which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country. (11a)
1. The foreign law is contrary to an important public policy of the forum
• Public policy – principle of law which holds that no subject or citizen
can lawfully commit any act which has a tendency to be injurious to
the public or against the public good.
• Public policy technique – court will not give due course to a claim
existing under foreign law because:
o It considers the nature of the claim unconscionable; or
o Its enforcement would violate a fundamental principle of
justice, some prevalent conception of good morals, or some
deep-rooted tradition of the commonweal.
• Dismissal on the grounds of public policy is not a dismissal on the
merits. Can seek relief elsewhere.
• SC refused to allow a claim based on foreign law (despite the parties
agreeing on said law) based on a “public interest” standard.
Pakistan International Airlines Corporation v. Ople
PIA employed two Filipinas (private respondents) as flight attendants. Prior to
the expiration of their employment contracts, they were dismissed. Private
respondents filed complaints for illegal dismissal with the Ministry of Labor
and Employment. PIA claims that the employment contracts contain a
choice-of-law clause favoring Pakistan law.
HELD: The choice-of-law clause cannot bar application of the Labor Code.
The relationship between PIA and private respondents is affected with public
interest. The otherwise applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other law to govern their
relationship. Also, since PIA failed to plead and prove Pakistan law, the
doctrine of processual presumption applies.
• One criticism of the public policy exception is that it can be used as
an ultimate escape device.
o Can just disregard choice-of-law approaches without having
to explain its analysis.
o Goodrich: it should take an extraordinary case to justify an
argument based on public policy of the forum.
• “Intolerable affectation of superior virtue”
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 o Courts of one state would pretend that the enforcement of a
right created by another state would offend its good morals.
o A court of the forum should not sit in judgment over the
wisdom and soundness of the applicable foreign law.
• Courts should ask: In what way is the foreign law repugnant to our
public policy?
o If the judge is absolutely sure that the foreign law is
barbarous or frightfully unjust, public policy is properly
invoked.
o If not so convinced, ask what policies are served by one
choice-of-law over the other.
2. The foreign law is procedural in nature
• Procedural laws are purely internal matters peculiar only to the State.
• Procedural law – prescribes forms of remedies in order that courts
applying them are able to administer justice.
• Why apply forum procedural law? Judicial convenience.
• Any individual who submits himself to the jurisdiction of the law of
the forum must follow the forum’s rules of procedure.
• Problem: characterization as substantive or procedural.
3. Issues are related to property (lex situs)
• GENERAL RULE: Questions relating to immovable property are
governed by the law of the place where the property is located. This
rule is embodied in NCC16.
• Three reasons why lex situs governs property:
1. Land and everything attached to it are within the exclusive
control of the State, only state officials can lawfully deal with
them physically.
a. Interest in immovables cannot be affected without
the consent of the state.
2. Following a policy-centered approach, immovables are of
greatest concern to the state in which they are situated.
3. Demands of certainty and convenience.
• EXCEPTIONS:
1. Where the transaction does not affect transfer of title to or
ownership of the land.
2. In contracts where real property is offered by way of security.
3. Testate or intestate succession.
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4. The issue involved in the enforcement of foreign claim is fiscal or
administrative
• A state is not obliged to enforce the revenue law of another.
• Banco de Brazil v. A.C. Israel: no enforcement of currency regulations.
• Moore v. Mitchell: Revenue laws fall within the same reasoning as
penal laws. They affect a state in matters as vital to its existence as
its criminal laws.
• Leflar: Foreign country wants to sue, let it. Follow the benefits-
received theory behind taxation.
5. The foreign law or judgment is contrary to good morals (contra bonos
mores)
• Standard is difficult to define.
• Contra bonos mores – acts having mischievous or pernicious
consequences or against true principles of morality.
o Killing
o Bribery of public officers
o Incestuous marriages
• Subject to the same criticisms as the public policy exception to due
inherent subjectivity.
6. The application of foreign law will work undeniable injustice to the citizens
of the forum
7. The foreign law is penal in character
• The Antelope: “The courts of no country shall execute the penal laws
of another.”
• Penal statute test: Whether, it appears to the tribunal which is called
upon to enforce it to be, in its essential character and effect, a
punishment of an offense against the public.
• Penalty – a sum of money exacted as punishment for a civil wrong as
distinguished from compensation for loss suffered by the injured
party.
• Lorenzo v. Posadas: “…a statute is penal when it imposes punishment
for an offense committed against the state which, under the
Constitution, the Executive has the power to pardon.”
• Penal statutes – all statutes which command or prohibit certain acts
and establish penalties for their violation.
• Revenue laws are generally not considered penal statutes.
• The penal law exception is partly remedied by the law on extradition.
Page 29 of 107
 o Under an extradition treaty, the state that receives the fugitive
from justice is legally obliged to surrender him to the state
from where he escaped.
o Political and religious offenders are generally not
extraditable.
• Recall interest analysis approach.
o Penal laws often express vital state interests.
o Should it not be, then, that penal laws should be one of the
first foreign laws to be enforced?
8. The application of the foreign law might endanger the vital interests of the
state
Merits and Demerits of Nationality as Personal Law
• Rationale: the laws of each state were presumed to be made for an
“ascertained population.”
• Since lawmakers considered the physical and moral qualities of the
citizens, then logically, laws should apply to such citizens wherever
they are.
• Nationality is easily verifiable from documents.
• Problems:
o Stateless persons or those with multiple nationalities.
o Places with no single national law like the US.
o Individuals who are nationals of one state but have lived in
another state for most of their life.

PART III: PERSONAL LAW Importance of Nationality in the Philippines

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

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B. DETERMINATION OF NATIONALITY
• Each state has the authority to determine its own nationals.
• The Hague Convention on Certain Questions Relating to the Conflict
of Nationality Law provides:
Article 2. Any question as to whether a person possesses the
nationality of a particular State shall be determined in accordance
with the law of the State.
• Sec. 1, Art. IV, 1987 Const. states:
Section 1. The following are citizens of the Philippines:
1. Those who are citizens of the Philippines at the time of the
adoption of this Constitution;
2. Those whose fathers or mothers are citizens of the
Philippines;
3. Those born before January 17, 1973, of Filipino mothers, who
elect Philippine citizenship upon reaching the age of majority;
and
4. Those who are naturalized in accordance with law.
1. NATURAL-BORN CITIZENS
• Jus soli – law of the place of one’s birth; used in many common law
countries.
• Jus sangguinis – rule of descent or blood; articulated in the
Constitution.
• Co v. Electoral Tribunal: Jose Ong is a natural-born citizen because
he did not have to perform any act to perfect his Filipino citizenship.
o His mother was Filipina.
o His father was Chinese who was naturalized when he was
only a minor.
• Aznar v. COMELEC: Private respondent presumed to be Filipino
because his father is Filipino.
o Burden of proof is on the person alleging that one has lost his
citizenship.
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Talaroc v. Uy
Alejandro Uy was born to a Spanish father and a Filipina mother. He ran for
and won as Mayor of Manticao, Misamis Oriental. A quo warranto proceeding
was filed against him alleging that he was not a Filipino citizen. In this
defense, Uy claimed that upon the death of his father in 1926, his mother
reacquired Filipino citizenship, and that he followed such citizenship as well.
HELD: Uy is a Filipino citizen.
Roa v. Insular Collector of Customs (1912): Upon [the husband’s] death, the
widow reverts back to her original citizenship, unless she elects to retain her
husband’s. Her children, in turn, follow her nationality with the proviso that
they may elect for themselves upon reaching majority.
The ruling in Roa was overturned by Tan Chong v. Secretary of Labor (1947).
Neither of the two cases is controlling. The 1935 Constitution states that
citizens of the Philippine Islands at the time of the adoption of the
Constitution are citizens of the Philippines. When the Constitution was
adopted, Uy was a citizen of the Philippines under the Roa doctrine. He
already held public office, exercised the right of suffrage, and took the oath of
allegiance. It would be unfair to hold Uy as an alien after he already exercised
privileges of citizenship. Moreover, the Tan Chong decision itself states that
the decision cannot be given retroactive effect.
CA 63 (1936) provides for a procedure to be followed in a widow’s
reacquisition of Philippine citizenship. This law cannot be given retroactive
effect. At the time it was passed, Uy’s mother had already been a widow for
10 years.
Co v. Electoral Tribunal of the House of Representatives
Ong Te was a Chinese citizen who settled in Samar in 1905. His son, Ong
Chuan, was born in China in 1905 and came to the Philippines in 1915. Ong
Chuan married one Agripina Lao. They had 8 children, one of whom is private
respondent Jose Ong, Jr. When private respondent was 9 years old, his father
Ong Chuan was naturalized as a Filipino citizen. Private respondent voted in
two consecutive elections in Laoang, Samar, before deciding to run for
Congress in 1987. He garnered the highest number of votes, defeating herein
petitioner. A protest was filed before the HRET. Ong, Jr. was declared a
Filipino.
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HELD: Private respondent Ong, Jr. is a Filipino. Under 1973 Constitution,
those born of Filipino mothers before Jan. 17, 1973 must elect Filipino
citizenship upon reaching the age of majority. But it is unnatural and
unnecessary to have required private respondent to elect Filipino citizenship
because he was already a citizen. His mother was a citizen. Ong Chuan, his
father, was naturalized when Ong, Jr. was only 9 years old. Furthermore, he
has voted in elections and is exercising a profession reserved only to
Filipinos. The exercise of the right of suffrage constitutes a positive act of
election of Filipino citizenship. Ong, Jr. lived his entire life as a Filipino.
Dissent: At birth, private respondent’s father was still a Chinese citizen. Thus,
he still had to elect Filipino citizenship upon attaining the age of majority.
Tecson v. Commission on Elections
Fernando Poe, Jr. (FPJ) filed a certificate of candidacy for President of the
Republic. Several petitions were filed to cancel his COC on the ground of
material misrepresentation relating to his citizenship. One of the petitioners,
Fornier, alleged that FPJ’s grandfather (Lorenzo Pou) was a Spanish citizen,
hence, FPJ’s father (Allan Poe) was also a Spanish citizen. And even
assuming that Allan was Filipino, FPJ could not follow his citizenship because
he was an illegitimate child.
HELD: FPJ is a Filipino. Lorenzo Pou died in Pangasinan in 1954. It could be
assumed that he was in the Philippines during the period of en masse
Filipinization under the Philippine Bill of 1902. This would make his son, Allan,
a Filipino as well. And finally, FPJ, who was born in 1939, would likewise be a
Filipino under the 1935 Constitution (those born of Filipino fathers). The
Constitution does not distinguish between legitimate and illegitimate
children.
Dissent: FPJ was born out of wedlock and was not recognized by his father.
An illegitimate child of a Filino father may be only be considered a natural-
born citizen if he was duly acknowledged by the latter at birth, thus leaving
the child with nothing more to do to acquire or perfect his citizenship.
2. CITIZENS BY NATURALIZATION
• Naturalization – confers to an alien nationality after birth by any of
the means provided by the law.
• The Naturalization Law is CA 473 as amended by RA 530.
• During the Marcos regime, LOI 270 was in force:
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o Summary administrative inquiry;
o No filing of declaration of intention, income requirements;
o Speak and write Filipino, English or Spanish and any principal
Filipino language.
o Special committee recommends issuance of a Decree to
qualified applicants to the President.
Qualifications for Applicants for Naturalization
1. Not less than 21 years old on the date of the hearing of the petition.
2. Must have resided in the Philippines for a continuous period of not
less than 10 years.
o 10-year residency requirement may be reduced in the
following cases:
! If the applicant has honorably held office under the
Philippine Government or any of its political
subdivisions or LGUs;
! If he established a new industry or introduced a new
invention in the Philippines;
! If he is married to a Filipino woman;
! If he had been engaged as a teacher in a public or
private school NOT established for the exclusive
instruction of children of persons of a particular
nationality/race in any of the branches of education
or industry for a period of two years;
! If he was born in the Philippines.
3. Of good moral character, believes in the principles underlying the
Constitution, conducted himself in a proper and irreproachable
manner during the entire period of residence in the Philippines in his
relations with the government as well as with the community.
o Proper and irreproachable – higher standard of morality than
good moral character.
o Dy Lam Go v. Republic: moral character of the highest degree;
merely being a law-abiding citizen is insufficient.
o Must be proved by competent evidence:
! Testimony of two character witnesses who must be
well-known in the community; good reputation for
probity.
! Persons employed by the petitioner would be
incompetent to testify.
o Que Tiac v. Republic:
Page 32 of 107
 ! Witnesses must have known the petitioner for the
period prescribed by law.
! Must be able to attest that the applicant conducted
himself in a proper and irreproachable manner during
the entire period of his residence.
4. Must own real estate in the Philippines worth not less than P5,000, or
must have some lucrative trade, profession or lawful occupation.
o Note that Art. XII of the 1987 Constitution provides:
Section 3. Lands of the public domain are classified into
agricultural, forest or timber, mineral lands and national
parks. Agricultural lands of the public domain may be further
classified by law according to the uses to which they may be
devoted. Alienable lands of the public domain shall be limited
to agricultural lands. Private corporations or associations
may not hold such alienable lands of the public domain
except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the
Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof, by purchase,
homestead, or grant.
Taking into account the requirements of conservation,
ecology, and development, and subject to the requirements of
agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired,
developed, held, or leased and the conditions therefor.
Section 7. Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Yu Kian Chie v. Republic
Petitioner applied for naturalization before the CFI claiming that he had an
average ncome of P3,000. The OSG opposed and alleged that he failed to
prove lucrative income. The lower court granted the petition for
naturalization. Hence, this appeal.
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HELD: Yu was not able to prove that he had lucrative income to support his
petition. The evidence presented tends to show that he was receiving only
P150 as salary. The rest were given in the form of allowances and bonuses.
This amount does not come up to the category of a lucrative income,
considering that the petitioner is now a married man.
4. [CONTINUED]
o “Lucrative trade, profession or lawful occupation” –
substantial gainful employment; the obtaining of tangible
receipts.
o Appreciable margin of income over expenses.
o Must be able to provide adequate support for the income-
earner and his family in the event of sickness, unemployment
or disability to work.
o Watt v. Republic:
! Not enough to show that the applicant is not a
financial burden upon the community.
! His financial condition must be such to permit him
and the members of his family to live with reasonable
comfort, in accordance with the prevailing standard
of living, and consistently with the demands of
human dignity.
! Courts should be skeptical of evidence provided by
applicants who work for their relatives or parents.
o Property ownership requirement is at odds with the
Constitution.
! Palacias v. Vda. de Ramirez: Hereditary succession
exception does not extend to cases of testamentary
succession.
• It would be easy to circumvent the provision
by asking someone to give property to an
alien by way of devise.
o BP 185 allows natural-born citizens who have lost their
Filipino citizenship to be transferees of private land for
residential purposes not exceeding 1,000 sq. m. of urban land
or 1 ha. of rural land.
o SC:
! In pari delicto doctrine can apply.
• Action to declare the contract of sale void
was dismissed by the SC on this ground.
! Naturalized aliens not prohibited from owning land.
Page 33 of 107
 • Rationale: underlying purpose of the
prohibition is to preserve the patrimony of the
nation for future generations of Filipinos.
5. Must be able to speak and write English or Spanish and any one of
the principal Philippine languages.
o If he can only understand, he is not qualified.
6. Must have enrolled minor children of school age in any of the public
or recognized private schools where Philippine history, government
and civics are taught or prescribed as part of the school curriculum
during the entire period of the residence required of him, prior to the
hearing of his petition for naturalization as a citizen.
o Children of the applicant must learn and imbibe Filipino
customs and traditions.
o Must be affirmatively shown, otherwise the application will be
denied.
o Even if the children cannot be brought to the Philippines due
to financial difficulties, the petition will still be denied.
o If the school is predominantly enrolled in by Chinese
students, the application will be denied.
Disqualifications for Naturalization
• GENERAL RULE: State has the burden of proving disqualification of an
applicant.
• EXCEPTION: SC has held in some cases that the applicant has the
burden have proving that he has none of the disqualifications.
o Rationale: naturalization is a privilege, not a right.
• Crimes involving moral turpitude – acts of baseness, vileness or
depravity in the private and social life in general, contrary to the
accepted and customary law of right and duty between men.
o Contrary to honesty, modesty or good morals.
• CA 473 requires that the applicant must deal with and receive
Filipinos in his home, and visit Filipino homes with a spirit of
friendship, friendliness and equality without discrimination.
o Petitioner kept his wife and children in a neighboring
country—shows lack of sincere desire to establish himself as
a Filipino citizen.
• Applicant must establish that his nation grants reciprocal rights to
Filipino citizens at the time of the hearing of his application.
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C. PROCEDURE FOR NATURALIZATION
1. Filing of declaration of intention, unless exempted;
2. Filing of petition for naturalization;
3. Publication in the OG or newspaper of general circulation, hearing;
4. If petition approved, rehearing two years after promulgation of
judgment awarding naturalization;
5. Oath-taking (allegiance to support and defend the Constitution and
the laws).
Declaration of Intention
Sec. 5. Declaration of intention. – One year prior to the filing of his petition for
admission to Philippine citizenship, the applicant for Philippine citizenship
shall file with the Bureau of Justice, a declaration under oath that it is bona
fide his intention to become a citizen of the Philippines. Such declaration
shall set forth name, age, occupation, personal description, place of birth, last
foreign residence and allegiance, the date of arrival, the name of the vessel or
aircraft, if any, in which he came to the Philippines, and the place of residence
in the Philippines at the time of making the declaration. No declaration shall
be valid until lawful entry for permanent residence has been established and a
certificate showing the date, place, and manner of his arrival has been issued.
The declarant must also state that he has enrolled his minor children, if any,
in any of the public schools or private schools recognized by the Office of
Private Education of the Philippines, where Philippine history, government,
and civics are taught or prescribed as part of the school curriculum, during
the entire period of the residence in the Philippines required of him prior to the
hearing of his petition for naturalization as Philippine citizen. Each declarant
must furnish two photographs of himself.
• Exemptions (§6):
1. Persons born in the Philippines and have received their
primary and secondary education in public schools or those
recognized by the Government and not limited to any race or
nationality;
2. Those who have resided continuously in the Philippines for a
period of thirty years or more before filing their application;
3. Widow and minor children of an alien who declared his
intention to become a citizen of the Philippines and dies
before he is actually naturalized.
• Watt v. Republic: if one comes within the exemption, a statement of
such exemption and the reasons therefor should appear in the
petition.
Page 34 of 107
 o Necessary to apprise the public so they can object or contest
to any evidence in that regard.
o Failure to comply constitutes a fatal defect; petition will be
void for noncompliance with the law.
• Jurisdiction conferred by §8:
Sec. 8. Competent court. – The Court of First Instance of the province
in which the petitioner has resided at least one year immediately
preceding the filing of the petition shall have exclusive original
jurisdiction to hear the petition.
• Character witnesses must be qualified and competent to testify on:
o Period of applicant’s residence in the Philippines;
o His good and irreproachable conduct.
• During the motion to take oath, court may inquire into any question
affecting the qualifications of the applicant.
Effect of Naturalization on Wife and Children
Sec. 15. Effect of the naturalization on wife and children. – Any woman who is
now or may hereafter be married to a citizen of the Philippines, and who might
herself be lawfully naturalized shall be deemed a citizen of the Philippines.
Minor children of persons naturalized under this law who have been born in
the Philippines shall be considered citizens thereof.
A foreign-born minor child, if dwelling in the Philippines at the time of the
naturalization of the parent, shall automatically become a Philippine citizen,
and a foreign-born minor child, who is not in the Philippines at the time the
parent is naturalized, shall be deemed a Philippine citizen only during his
minority, unless he begins to reside permanently in the Philippines when still
a minor, in which case, he will continue to be a Philippine citizen even after
becoming of age.
A child born outside of the Philippines after the naturalization of his parent,
shall be considered a Philippine citizen, unless within one year after reaching
the age of majority, he fails to register himself as a Philippine citizen at the
American Consulate of the country where he resides, and to take the
necessary oath of allegiance.
Ish Guidote
Vivo v. Cloribel
Chua, a chinese woman, and her two minor children, Koc and Tian, arrived in
the Philippines as temporary visitors. Chua’s husband filed a petition for
naturalization which the trial court granted. Thus, Chua and the children filed
for and indefinite extension of their stay in the Philippines. The Sec. of
Foreign Affairs approved and changed their status to “special non-
immigrants.” The Commissioner of Immigration refused to honor the
extension. The Sec. of Justice eventually revoked the extension, prompting
Chua to file a suit for mandamus to allow her to remain in the Philippines.
HELD: Chua is not entitled to stay in the Philippines as she did not
automatically acquire Philippine citizenship upon her husband’s
naturalization. She must first prove that she possesses all of the
qualifications and none of the disqualifications for naturalization. Instead, she
committed acts of misrepresentation in stating that she only came to the
Philippines for a temporary stay. Chua also failed to satisfy the 10-year
residency requirement.
As for the children, they cannot claim the benefit of their father’s
naturalization as they were not lawfully residing in the Philippines.
Moy Ya Lim Yao v. Commissioner of Immigration
Lau was a Hong Kong citizen who married petitioner, an alleged Filipino
citizen. Upon expiration of her visitor’s visa, she filed for injunctive relief
before the CFI to restrain the Commissioner of Immigration from deporting
her. The CFI denied the application on the ground that she did not ipso facto
acquire Philippine citizenship upon her marriage to Lim; she had to prove that
she had all of the qualifications and none of the disqualifications.
HELD: Lau automatically acquired Filipino citizenship upon her marriage to
Lim. Based on the construction given to the American statute on which our
Immigration Act is based, the husband’s citizenship is conferred to the alien
wife without having to prove that she possesses the special qualifications of
residence and moral character, among others, provided that she does not
suffer from any of the enumerated disqualfiications. Likewise, an alien
woman married to an alien who is subsequently naturalized here follows the
citizenship of her husband the moment he takes his oath as a Filipino citizen,
provided that she does not suffer from any of the disqualifications.
Page 35 of 107
 • Mo Ya Lim reversed Burca v. Republic which held that:
1. An alien woman married to a Filipino who desires to be a
Filipino citizen must file a petition for citizenship stating that
she has all the qualifications and none of the
disqualifications under the Revised Naturalization Law.
2. Petition must be filed in the CFI where petitioner has resided
at least one year immediately preceding the filing of the
petition; and
3. Any action by any other office declaring that the alien wife of
a Filipino citizen is also a Filipino citizen is null and void.
• After Mo Ya Lim was promulgated, Burca petitioned the SC for
affirmation of the trial court’s judgment declaring her a Filipino
citizen.
o SC held that Mo Ya Lim notwithstanding, Burca still had to
take steps to cancel her alien certificate of registration.
o Our laws do not allow judicial action or proceeding for the
declaration of the citizenship of an individual.
No Judicial Declaration of Philippine Citizenship
• May not be granted in an action for declaratory relief.
• Summary procedure under NCC412 for correction of error in the Civil
Registry was disallowed.
o Rule later relaxed.
o Change of citizenship may be granted where an appropriate
action is made. All parties who may be affected must be
notified and represented; there must be a full-blown hearing.
• Tan Yu Chin v. Republic:
o Under our laws, there can be no action or proceeding for the
judicial declaration of citizenship of an individual.
o As an incident only of the adjudication of the rights of the
parties to a controversy, the court may pass upon, and make
a pronouncement relative to, their status.
o Otherwise, such a pronouncement is beyond judicial power.
D. LOSS OF PHILIPPINE CITIZENSHIP
• Modes provided in CA 63 as amended by RA 106.
1. Naturalization in foreign countries
Frivaldo v. Commission on Elections (1989)
A petition was filed before the COMELEC to annul Frivaldo’s election and
Ish Guidote
proclamation as Governor of Sorsogon on the ground that he is not a Filipino
citizen. Frivaldo was naturalized in the US in 1983. However, he claims that he
was forced to seek American citizenship to protect himself from President
Marcos.
HELD: Frivaldo is not a Philippine citizenship. The OSG correctly found that he
has not repatriated himself even after his naturalization. There are three ways
to reacquire citizenship:
1. Direct act of Congress;
2. Naturalization;
3. Repatriation
The act of voting in Philippine elections does not constitute repatriation, even
if under the laws of the US, Frivaldo forfeited his US citizenship. The laws of
the US do not concern us here. At best, Frivaldo became a stateless person.
Neither can the filing of his COC constitute the “formal declaration” required
by CA 63.
Frivaldo v. Commission on Elections (1996)
Frivaldo applied for repatriation under PD 725 on Aug. 17, 1994. However, he
was not able to take his oath until June 30, 1995. It is argued that his COC
was invalid because at the time it was filed (May 8, 1995), Frivaldo was not
yet a Filipino citizen.
HELD: Frivaldo is a Filipino citizen. The reacquisition of citizenship is deemed
for all intents and purposes to have retroacted to the date of application.
Labo, Jr. v. Commission on Elections
Labo was elected Mayor of Baguio City. Lardizabal filed a quo warranto
proceeding alleging that Labo was an Australian citizen, as evidenced by the
following acts: naturalization, change of status from “immigrant” to “returning
former Filipino citizen,” obtaining an Immigrant Certificate of Resident, and
declaration of Australian citizenship in various sworn statements. Labo
claims that at worst, he is a dual citizen.
HELD: Labo is not a Filipino citizen. CA 63 provides that citizenship may be
lost by naturalization, express renunciation, or taking of an oath of allegiance
to another state. All of these apply to Labo. There is no showing that he has
taken steps to reacquire Philippine citizenship by any of the means provided
by Philippine laws.
Page 36 of 107
 • In a later case, Court held that Labo still failed to prove reacquisition
of Philippine citizenship.
o In the absence of any official action or approval by the proper
authorities, a mere application for repatriation does not, and
cannot, amount to an automatic reacquisition of the
applicant’s Philippine citizenship.
2. By express renunciation of citizenship
Aznar v. Commission on Elections
Osmeña filed his Certificate of Candidacy for Governor of Cebu. A petition for
disqualification was filed on the ground that he was an American citizen, as
proven by a Certification from the Deportation Commissioner that he had a
subsisting Alien Certificate of Registration. Osmeña claims that he remains a
Filipino since he was born of Filipino parents, had a valid Philippine passport,
voted in elections, and resided in the Philippines his entire life.
HELD: Osmeña is a Filipino citizen. Petitioner failed to prove that Osmeña lost
his citizenship by any of the means provided for under CA 63. Philippine
courts are only allowed to determine who are Filipino citizens and who are
not. Whether or not a person is considered an American under the laws of the
US does not concern us here. Loss of Filipino citizenship cannot be
presumed, considering that Osmeña vehemently denied having taken the oath
of allegiance to the US. Renunciation must be express—here, there was no
renunciation, express or implied.
3. Subscribing to an oath of allegiance to support the constitution or laws of a
foreign country upon attaining twenty-one years of age or more, subject to
certain exceptions
4. Rendering service to, or accepting commission in, the armed forces of a
foreign country, subject to certain exceptions
5. Having been declared by competent authority, a deserter of the Philippine
armed forces in time of war, unless subsequently, a plenary pardon or
amnesty has been granted
6. In the case of a woman, upon her marriage to a foreigner, if the by virtue of
the laws in force in her husband’s country, she acquires his nationality
7. Cancellation of the certificate of naturalization
Ish Guidote
• §18, CA 473 provides:
Sec. 18. Cancellation of Naturalization Certificate Issued. – Upon
motion made in the proper proceedings by the Solicitor-General or his
representative, or by the proper provincial fiscal, the competent judge
may cancel the naturalization certificate issued and its registration in
the Civil Register:
1. If it is shown that said naturalization certificate was obtained
fraudulently or illegally.
2. If the person naturalized shall, within the five years next following
the issuance of said naturalization certificate, return to his native
country or to some foreign country and establish his permanent
residence there: Provided, That the fact of the person naturalized
remaining for more than one year in his native country or the country
of his former nationality, or two years in any other foreign country,
shall be considered as prima facie evidence of his intention of taking
up his permanent residence in the same;
3. If the petition was made on an invalid declaration of intention;
4. If it is shown that the minor children of the person naturalized
failed to graduate from a public or private high schools recognized by
the Office of Private Education of the Philippines, where Philippine
history, government and civics are taught as part of the school
curriculum, through the fault of their parents either by neglecting to
support them or by transferring hem to another school or schools. A
certified copy of the decree cancelling the naturalization certificate
shall be forwarded by the clerk of the Court to the Office of the
President and the Office of the Solicitor General;
5. If it is shown that the naturalized citizen has allowed himself to be
used as a dummy requiring Philippine citizenship as a requisite for
the exercise, use or enjoyment of a right, franchise or privilege.
• Estoppel/res judicata cannot be invoked against a decree directing
the issuance of a certificate of naturalization—it is a mere grant of
political privilege.
• If it was obtained fraudulently or illegally, the certificate may be
cancelled.
Page 37 of 107
 Republic v. Li Yao
William Li Yao was naturalized as a Filipino citizenship. The OSG sought to
cancel his naturalization on the ground that it was obtained through
fraudulent means. Li Yao was alleged to have evaded the payment of income
taxes from 1946-1951. The CFI cancelled his certificate of naturalization.
HELD: The cancellation of the certificate was valid. A certificate of
naturalization may be cancelled if it is subsequently discovered that the
applicant obtained it by misleading the court upon any material fact. It can be
cancelled even thought the ground arose after the issuance of the certificate.
The principle of res judicata is inapplicable to naturalization proceedings as it
is not a judicial adversarial proceeding.
E. PROBLEMS IN APPLYING THE NATIONALITY PRINCIPLE
1. DUAL OR MULTIPLE CITIZENSHIP
• Considering the principles of the Hague Convention, it will be possible
that a person can be claimed as a national of two or more states.
• If a child is born to parents whose national laws follow jus sanguinis
in a country that follows jus soli, such child will have dual nationality.
• A Filipino who marries an alien MAY acquire the latter’s citizenship if
his/her national law so allows.
o GENERAL RULE: PH citizenship retained.
o EXCEPTION: Renunciation by oath of allegiance or express
renunciation.
• In the determination of the rights of an individual who may claim
multiply nationality in a third state, the ICJ applied the principle of
“effective nationality.”
Nottebohm Case (Liechtenstein v. Guatemala)
Nottebohm was a German national. Despite moving to Guatemala and
residing there for 34 years, he retained family and business connections in
Germany. He applied for naturalization in Liechtenstein, which was granted.
After this, he returned to Guatemala where he stayed until 1943. When he tried
to return after the war, Guatemala refused to admit him. Liechtenstein filed
suit against Guatemala before the ICJ seeking reparations. Guatemala’s
defense: Nottebohnm did not properly acquire Liechtenstein nationality, thus,
the country cannot espouse his claim.
HELD: Nottebohm is not a citizen of Liechtenstein. His connections with the
Ish Guidote
country are extremely tenuous, as it appears that his intention was always to
remain in Guatemala. He obtained naturalization in Liechtenstein only to
substitute his status as a national of a belligerent state with that of a neutral
state. Guatemala is under no obligation to recognize a nationality granted
under such circumstances. Liechtenstein’s claim is thus inadmissible.
Oh Hek How v. Republic
Oh Hek How applied for naturalization in the Philippines. He moved to be
allowed to take his oath, and did so even before the court ordered the same.
The Republic moved to cancel the certificate on this ground. Acting on the
motion, the trial court issued a new order authorizing Oh Hek How to take his
oath. Another certificate was issued to validate the first.
HELD: Oh Hek How was not validly naturalized. Under §12, CA 473, the
petitioner must “solemnly swear” that he renounces absolutely and forever all
allegiance and fidelity to any foreign… state or sovereignty, and particularly to
the state of which he is a subject or citizen. Here, there is no showing that
petitioner validly renounced his citizenship in accordance with the laws of
China. As a consequence, he cannot be naturalized until he has obtained the
previous permission of the Minister of the Interior of China.
Mercado v. Manzano
Mercado and Manzano were both candidates for Vice Mayor of Makati.
Manzano garnered the highest number of votes but his proclamation was
suspended because Mercado filed a petition claiming that Manzano was
actually a US citizen. The COMELEC found that he was a dual citizen, thus he
is disqualified under §40 (d) of the LGC. COMELEC en banc reversed and held
that Manzano was qualified to run.
HELD: Manzano is not disqualified. The phrase “dual citizen” in §40 (d) must
be understood as referring to dual allegiance. While dual citizenship is
involuntary, dual allegiance is not. Therefore, the latter must be subjected to
strict processes with respect to the termination of their status. For dual
citizens, it should suffice that they elect Philippine citizenship to terminate
their status as dual citizens. Here, Manzano elected Philippine citizenship
upon filing of his COC.
Page 38 of 107
2. STATELESSNESS
• De jure statelessness – refers to an individual who has been stripped
of his nationality by his own former government without having an
opportunity to acquire another.
o Problem began in WWII.
o Became serious during the Nazi regime and in the USSR.
• De facto statelessness – refers to an individual possessed of a
nationality but whose country does not give him protection outside its
own territory.
o Commonly referred to as refugees.
o Post-Vietnam war: people from Vietnam, Cambodia, Laos
• 1951 Geneva Convention on the Status of Refugees
o Ratified by 54 states.
o Provided some basic rights of stateless persons.
• 1954: UN Conference on the Elimination or Reduction of Future
Statelessness
• 1961: Convention on the Reduction of Statelessness
o Individual would not lose his nationality despite marriage,
divorce, adoption, naturalization, expatriation.
o Prohibits states from depriving their nationals of their identity
as punishment.
o Objective is to remedy the situation of children born without
acquiring any nationality.
! Occurs when a child is born in a jus sanguinis
jurisdiction of parents whose national laws follow jus
soli.
! Jus sanguinis country would have to extend
nationality to a person born within its territory if he
would otherwise be stateless.
! Jus soli country would extend its nationality to a
person who would otherwise be considered stateless
when one of his parents is a citizen of the contracting
state.
• Stateless persons can be naturalized if they possess all the
qualifications, save that of reciprocity.
Kookooritchkin v. Solicitor General
Petitioner first came to the Philippines in 1923 as a member of the White
Russians. He married a Filipina with whom he had one son. In 1941, he
applied for naturalization. The trial court granted the petition. Hence, this
appeal by the Solicitor General.
Ish Guidote
HELD: Kookooritchkin was stateless. While he stated that he was a Russian
citizen in his application for naturalization, the Empire of Russia has ceased
to exist since it was overthrown in 1917. Also, petitioner disclaims allegiance
or connection with the Soviet government established after the overthrow of
the Czarist government. Petitioner left Russia to reside in the Philippines.
Here, he established a home and a family. It would be beyond comprehension
to conclude that petitioner could feel any bond of attachment to the Soviet
dictatorship.
Chapter X
DOMICILE
A. DEFINITION
• Domicile is defined by:
o Municipal law (Philippine law); and
o Private international law.
• As to municipal law: NCC50 provides—
Article 50. For the exercise of civil rights and the fulfillment of civil
obligations, the domicile of natural persons is the place of their
habitual residence. (40a)
• As to conflict-of-laws:
o Restatement – the place with which a person has a settled
connection for certain legal purposes, either because his
home is there or because that place is assigned to him by
law.
o Justice Story – the place of his true, fixed permanent home
and principal establishment, and to which, whenever he is
absent, he has the intention of returning.
• Domicile has acquired a technical meaning; a person may be living
somewhere but domiciled elsewhere.
• To acquire a domicile, there must be:
o Intention to make a place one’s domicile; and
o Physical presence.
• On the other hand, residence simply requires bodily presence of an
inhabitant in a given place.
• Koh v. CA: “…the term domicile is not exactly synonymous in legal
contemplation with the term residence, for it is a established principle
in Conflict of Laws that domicile refers to the relatively more
Page 39 of 107
 permanent abode of a person while residence applies to a temporary
stay of a person in a given place…”
Caasi v. Court of Appeals
Miguel defeated Caasi for the position of Mayor of Bolinao, Pangasinan. Caasi
sought to have Miguel disqualified on the ground that the latter is a green
card holder. The COMELEC dismissed the petition.
HELD: Miguel is not a resident of Bolinao, Pangasinan. §68 of the Omnibus
Election Code requires waiver of the candidate’s status as a permanent
resident/immigrant of a foreign country. Mere filing of a COC is insufficient;
there must be other acts independent of and prior to the filing of the COC
which would manifest such waiver. Since Miguel admitted that he had a green
card, he had to prove that he waived his status as an immigrant. This, he
failed to do. Furthermore, when he ran as Mayor, he had only been residing in
Bolinao for 3 months.
Uytengsu v. Republic
Uytengsu was born in the Philippines of Chinese parents. He remained here
until he graduated college but pursued further studies abroad. In 1950, he
returned to the Philippines and applied for naturalization. While the
application was pending, he took up a postgraduate degree in the US. Upon
his return the following year, the CFI of Cebu granted the petition for
naturalization. Hence, this appeal by the Republic assailing his compliance
with the residency requirement.
HELD: Petitioner did not reside in the Philippines for the purpose of
naturalization. In this context, residence is NOT synonymous with domicile.
To be a resident, one must be physically present in that place.
RESIDENCE DOMICILE
Involves the intent to leave when the What is controlling is intent to remain
purpose for which he has taken up his (animo manendi)
abode ceases
An act An act coupled with an intent
Derived from residendi or “a temporary Derived from domus meaning “home”
place of remaining”
Uytengsu cannot be exempted from the requirement of filing a Declaration of
Intention. Actual and substantial residence, not legal residence or domicile, is
essential to the enjoyment of the benefits of said exemption.
Ish Guidote
B. MERITS AND DEMERITS OF DOMICILE
• Merits:
o Domicile is the very purpose for having a personal law.
! The relationship between an individual and the place
where he has his permanent home is an adequate
basis for him to exercise rights therein and for the
state to impose duties on him.
! Right to invoke the protection of the laws,
responsibility of sharing the costs of government.
o Domicile is suitable for places having a federal system of
government, since the domiciliary law is the law of the place
where the person lives.
• Demerits:
o Domicile is not ascertainable without going to court to
establish the existence of animo manendi.
o The notion of domicile differs widely.
! Some states hold that it is synonymous with
residence.
! Some attribute different meanings to it depending on
the purpose.
o Attenuated connection; same problem with nationality.
! Domicile is fixed at birth.
! There may be no significant ties between the person
and the place.
! Individual’s relations with the state may be so diluted
that it no longer serves as valid basis for personal
law.
• GENERAL RULE: Philippines follows the nationality law theory.
• EXCEPTIONS: Domiciliary law is adverted to in the following
situations—
o Cases where the litigant is an alien who comes from a
country following the domiciliary principle; his personal
status, capacity, condition and family rights are governed by
the law of his domicile;
o Stateless persons;
o Those with dual nationalities;
o Alien domiciled in the Philippines executes a will abroad;
! Follow formalities prescribed by the law of his
domicile.
o Revocation of a will outside the Philippines.
! Must be done in accordance with domiciliary law of
the testator (NCC829).
Page 40 of 107
C. GENERAL RULES ON DOMICILE
1. No person shall be without a domicile.
2. A person cannot have two simultaneous domiciles.
• The very purpose of identifying the domicile is to establish a
connection between a person and a definite legal system.
• In practice, courts may attribute different meanings to domicile
depending on the purpose.
o Can be domiciled in one state for purposes of divorce but not
for running for public office.
• It is more accurate to say that “a person can only have one domicile
for a given purpose or a given time under the law of a particular state,
but it should not be assumed that that determination will be binding
on other states or on the same state for other purposes.
• Sometimes residence is held to be synonymous with domicile.
3. Domicile establishes a connection between a person and a particular
territorial unit.
4. The burden of proving a change of domicile is upon whoever alleges that a
change has been secured.
• Without overwhelming evidence, courts will decide in favor of
continuance of an existing domicile.
Romualdez-Marcos v. Commission on Elections
Imelda Marcos filed her Certificate of Candidacy for Representative of the
First District of Leyte. She indicated that she had been residing there for 7
months. Thus, the incumbent, Montejo, filed a petition for disqualification
averring that Marcos failed to comply with the residency requirement under
the Constitution. The COMELEC cancelled her COC.
HELD: Marcos was a resident of the First District of Leyte for at least one year
preceding the day of the election. For election purposes, residence is
synonymous with domicile. It is the fact of residence, not a statement in the
COC, which ought to be decisive in determining whether an individual has
complied with the residency requirement. Petitioner’s residence of origin is
Tacloban, Leyte. She did not ipso facto lose her domicile upon her marriage.
Even assuming that she did, she acquired the right to fix a new one upon his
death. Her acts show her intent to reacquire her domicile of origin.
Ish Guidote
Dissents: Petitioner lost her domicile of origin by operation of law upon her
marriage. What was revived after Mr. Marcos’ death was not the domicile of
origin but the power to acquire her own domicile.
Ujano v. Republic
Ujano was a Filipino citizen who was later naturalized in the US. He returned
to the Philippines (admitted for a temporary stay) and applied for
reacquisition of Filipino citizenship. The CFI denied the petition for failure to
comply with the six-month residency requirement.
HELD: Petitioner failed to satisfy the residency requirement. Residence, in this
case, has been interpreted to mean the actual or constructive permanent
home otherwise known as legal residence or domicile. Since petitioner was
admitted for a temporary stay, he cannot be said to have established his
domicile here.
In Re Dorrance’s Estate
John Dorrance was originally from Pennsylvania. He worked for the
Campbell’s Soup Company in New Jersey, so he moved there with his wife.
They later moved to Philadelphia, then back to New Jersey where they bought
a country house. Several years later, Dorrance bought property again in
Pennsylvania and lived there until his death. In the estate proceedings, it was
contended that Dorrance was a resident of Pennsylvania. The court found
that his residence was in New Jersey.
HELD: Dorrance was domiciled in Pennsylvania at the time of his death. To
establish a domicile, there must be both factual residence and an intention of
remaining. The court is not convinced that Dorrance was a New Jersey
resident simply because he accumulated his fortune there. By birth, he was a
Pennsylvanian. He even lived there for three years after his marriage before
living in New Jersey. When he returned, he did not only resume his domicile of
origin; he purposely made his home in a neighborhood more congenial to his
family. Mere declarations that his residence was in New Jersey cannot
prevent the acquisition of domicile in Pennsylvania. A declaration of domicile
not followed by acts in accordance with such declaration will not be regarded
as conclusive, but will yield to the intent wich the acts and conduct of the
person clearly indicate.
Page 41 of 107
D. KINDS OF DOMICILE
1. Domicile of origin
• Person’s domicile at birth.
• Traditionally, legitimate child follows father’s while illegitimate child
follows mother’s.
• Upon emancipation, can acquire domicile of choice.
2. Domicile of choice
• Also known as voluntary domicile.
• Freely chosen by a person sui juris.
• There must be:
o Physical presence in the new place; and
o Unqualified intention to make that place one’s home.
Domicile of origin v. Domicile of choice
• Domicile of origin is said to be more enduring and less easily shaken
off than domicile of choice.
• Domicile of origin is not lost by mere abandonment and remains until
a domicile of choice is acquired.
• Upon the other hand, domicile of choice can be lost by the removal of
intent even before a new domicile is acquired.
• Reverter/revival doctrine: One the domicile of choice is given up, it is
presumed that the domicile of origin is revived until a new one is
acquired.
o Criticized because it violates the principles that—
! Domicile continues until a new one is acquired;
! Domicile is acquired upon the concurrence of act and
intention.
• Degree of permanence of abode – trend is to state intention in a
negative way.
o As long as there is no intention to return to the old domicile, a
new domicile is created, whether the intention is to remain for
the rest of one’s life or indefinitely or for the time being.
• Length of time the person has actually lived in the new domicile is
irrelevant.
o Only thing that matters is that the new domicile has been
selected and entered upon.
• Motive for change of domicile is immaterial.
o Once a permanent abode has been established in a new
place, the courts will not weigh the ethical values of his
motives.
Ish Guidote
o Motive is only relevant in determining the genuineness of
intent to acquire a new domicile.
Velilla v. Posadas
Moody was an American residing in Manila. He died in India. He executed a
will in the Philippines bequeathing all his property to his sister. Petitioner,
administrator of Moody’s estate, protested the CIR’s assessment of
inheritance taxes. It is argued that inasmuch as Moody was not a resident of
the Philippines at the time of his death, no inheritance taxes may be imposed.
HELD: Moody was a resident of the Philippines at the time of his death. There
is no statement of Moody, written or oral, that he adopted a new domicile
when he was absent from Manila. His statement that he did not intend to
return to Manila does not prove that he established a domicile elsewhere, for
he merely wanted to evade confinement in the Culion Leper Colony. To effect
abandonment of one’s domicile, there must be deliberate and provable choice
of a new domicile coupled with actual residence in the place chosen with a
declared or provable intent that it should be one’s fixed and permanent place
of abode, one’s home.
• Did the Court correctly apply the principles:
o As to the letter stating that he did not want to return to the
PH, is this not sufficient evidence of animo non revertendi?
o As to the motive for leaving the PH?
o As to the length of time spent in Paris?
! US courts ruled that momentary presence in the new
domicile constitutes substantial compliance with the
presence requirement.
White v. Tennant
Michael White and his wife lived on a farm in West Virginia. He agreed to sell
his farm so they could move permanently to Pennsylvania. Upon arriving in
Pennsylvania, they found the place damp and uncomfortable. The wife then
became afflicted with Typhoid fever. The spouses returned to West Virginia,
but Michael went to Pennsylvania every day to attend to his livestock. He, too,
fell ill. Michael died in West Virginia. Michael’s widow was given his entire
estate in accordance with the laws of West Virginia. Under Pennsylvania law,
she would only be entitled to ½.
HELD: At the time of his death, White was a domiciliary of Pennsylvania. If
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domicile is established, mere temporary absence will not destroy it, however
long continued. The facts show that White abandoned his domicile in West
Virginia with the intention not to return. He intended that his Pennsylvania
home be his new home for an indefinite time. When they arrived there, it
instantly became his domicile. There was a concurrence of intention to make
Pennsylvania his new domicile and the fact of abandonment of West Virginia
as his old domicile.
3. Constructive domicile
• By operation of law, a domicile is assigned to persons incapable of
choosing their own domicile.
o Minors
o Mentally disabled
o Married women
• Minors – domicile automatically changes when father’s domicile
changes.
o Take the domicile of their mother upon their father’s death.
! This is the prevailing rule in many countires as a
consequence of the application of laws on parental
authority.
o FC212:
In case of absence or death of either parent, the parent
present shall continue exercising parental authority. The
remarriage of the surviving parent shall not affect the
parental authority over the children, unless the court appoints
another person to be the guardian of the person or property of
the children. (n)
o Drastically different from NCC328:
The mother who contracts a subsequent marriage loses the
parental authority over her children, unless the deceased
husband, father of the latter, has expressly provided in his will
that his widow might marry again, and has ordered that in
such case she should keep and exercise parental authority
over the children.
o NCC333 provided that widow who remarries only regains
parental authority should she become a widow again.
Ish Guidote
o Thus, a child whose mother remarries retains his old domicile
until he voluntarily changes it upon reaching the age of
majority.
• Mentally disabled persons – presumed that they cannot acquire a
domicile of choice because of inherent inability to decide where to
make his home.
o But if it is shown that the person is capable of understanding
his act and its consequences, he may be able to acquire a
domicile of choice.
Special Problems in Domicile of Choice vis-à-vis Constructive Domicile
• Problems confronting acquisition of domicile of choice:
o People under compulsion;
o Married women seeking to acquire domicile separate from
their husbands.
• People under compulsion – freedom of choice is an indispensable
criterion.
o A person under compulsion is in that place not as a result of
his volition.
o Examples: military personnel, prisoners, PWDs confined in
institutions.
Carballo v. Republic
Carballo was a member of the US Air Force. He was stationed in Clark. There,
he met his wife Graciela. They sought to adopt one Norma Lee Caber, who
they have reared since birth. The CFI denied the petition for adoption on the
ground that Carballo, a non-resident alien, was disqualified from adopting
under the Civil Code.
HELD: Carballo was not a resident of the Philippines. Residence must be
chosen freely and voluntarily. Thus, presence in a place not of a person’s
voluntary choice and without intention to remain there indefinitely does not
make him a resident of that place. Since petitioner’s stay in the Philippines is
temporary, he is not qualified to adopt.
• Recent US decisions: person should be allowed to prove acquisition
of domicile of choice if he shows intent to remain in the place even
after compulsion ceases.
• Compulsion is reduced to a factor which determines whether intent
exists.
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 • To hold otherwise would be to curtail the constitutionally protected
right to choose one’s domicile.
• Married women – unity of identity of spouses; wife presumed to take
domicile of husband.
o This presumption is archaic and constitutes gender-based
discrimination.
o FC69:
The husband and wife shall fix the family domicile. In case of
disagreement, the court shall decide.
The court may exempt one spouse from living with the other
if the latter should live abroad or there are other valid and
compelling reasons for the exemption. However, such
exemption shall not apply if the same is not compatible with
the solidarity of the family. (110a)
o No case yet deciding a controversy over the wife’s right to
establish her own domicile.
o In Romualdez, it was ruled that the wife had the right to
acquire her own domicile after her husband’s death.
Go Chen and Go Lek v. Collector of Customs of Cebu
Tan Bon was married to Go Tuan. They had two children, herein petitioners.
After Go Tuan died, Tan Bon remarried to another Chinese man. Tan Bon
came to the Philippines and was admitted as the wife of a Chinese merchant.
She asked petitioners to come to the Philippines as well.
HELD: Tan Bon cannot bring petitioners with her to the Philippines to lawfully
reside here. She did not enter the Philippines through her own right but by
virtue of the right of her second husband. Since petitioners are not children of
Tan Bon’s second husband, they are not entitled to enter.
De La Vina v. Villareal and Geopano
Narcisa Geopano and Diego De La Vina were spouses living in Negros
Oriental. Narcisa filed an action for divorce before the CFI of Iloilo citing
Diego’s infidelity. Diego assailed the jurisdiction of the CFI of Iloilo inasmuch
as the conjugal home as in Negros Oriental. He claimed that Narcisa could
not acquire a domicile in Iloilo prior to the dissolution of their marriage.
Ish Guidote
HELD: Narcisa was a resident of Iloilo. GENERAL RULE: Wife follows domicile
of the husband. This theory is founded upon the identity of person and
interest between husband and wife. EXCEPTIONS:
1. When the theoretical unity of husband and wife is dissolved, as it is by
the institution of divorce proceedings;
2. Where the husband has given cause for divorce;
3. Where there is a separation of the parties by agreement;
4. Where there is a permanent separation due to desertion of the wife by
the husband or attributable to cruel treatment by the husband;
5. Where there has been a forfeiture by the wife of the benefit of the
husband’s domicile.
Here, the husband has given cause for divorce.
• Wife may establish a separate domicile where she is justified in
leaving her husband.
• Modern view dispenses with the presumption that the wife’s domicile
is the same as her husband.
o Each party establishes his/her domicile independent of the
other.
o Wife need not show that the husband has given cause for
divorce/legal separation to be able to fix her own domicile.
Chapter XI
PRINCIPLES ON PERSONAL STATUS AND CAPACITY
A. DEFINITION
• Personal status
o General: includes both condition and capacity;
o Specific:
! Beginning and end of human personality;
! Capacity to have rights in general;
! Capacity to engage in legal transactions;
! Protection of personal interests, family relations;
• Husband-wife
• Parent-child
• Guardian-ward
! Transactions of family law;
• Marriage
• Divorce
• Separation
• Adoption
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 • Legitimation
• Emancipation
! Succession.
• Testate
• Intestate
• “Status” was taken from the Roman doctrine of status libertates
(freedom), status civitates (citizenship) and status familiae (position
as head of house or person subject to pater familia).
• No exact meaning and is nebulous because the law does not
recognize absolute legal characteristics inherent in every person.
• Juridical capacity – the fitness of man to be the subject of legal
relations.
• Capacity to act – the power to do acts with juridical effects.
• Both must concur to produce complete civil capacity.
• Civil Code provides:
Article 37. Juridical capacity, which is the fitness to be the subject of
legal relations, is inherent in every natural person and is lost only
through death. Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost. (n)
• Status and capacity of a person is determined by the national law of
such person following NCC15.
o In case of aliens, their national law applies if their country
follows the nationality principle.
o If their country follows the domiciliary principle then the
domiciliary law applies.
Recto v. Harden
Mrs. Harden hired Claro M. Recto to represent her in a case against her
husband. The case was for support and preservation of her rights in the
conjugal partnership, as she was contemplating filing for divorce. Mrs.
Harden agreed that Recto would be paid 20% of the value of the conjugal
partnership after litigation. The court ruled in favor of Mrs. Harden. Pending
appeal, the spouses compromised. Recto was not paid attorney’s fees, thus,
he filed a complaint for collection. The spouses’ defense is that the contract
is void because its purpose is to secure a divorce decree in violation of
Philippine law.
HELD: The contract between Mrs. Harden and Atty. Recto is valid. The case
was filed merely to protect the interest of Mrs. Harden in the conjugal
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partnership. Moreover, since the spouses are US citizens, their status is
governed by US law, which law sanctions divorce. The contract cannot be
said to be contrary to law, morals, good customs, public order or public policy.
B. LEGISLATIVE JURISDICTION DISTINGUISHED FROM JUDICIAL
JURISDICTION
• Status, once established by the personal law of the party, is given
universal recognition.
• Universality is the basic principle of status in PrIL.
o The particular status brought into existence by the law of
country A must have attributed to it by country B the self-
same personal capacity or incapacity, the self-same rights
and duties, which country A conferred or imposed upon that
person, natural or artificial.
o The court of country B can introduce into that status no
exceptions or qualifications unknown to the status of its
creation unless they are bound to by some definite and
protected rule of municipal law.
• Aliens can sue and be sued in the PH subject to PH procedural law.
o But their status and capacity is to be determined by our
courts using their personal law.
Barnuevo v. Fuster
Fuster and Yanez were Spanish subjects who were married in Spain. They
executed an agreement to separate and live apart. Yanez later filed for divorce
before the CFI of Manila. The court granted the petition.
HELD: The CFI had jurisdiction to decree the divorce now on appeal. The
authority of jurisdictional power of courts to decree a divorce is not
comprised within the personal status of the husband and wife, rather, it is a
matter of public or political law of the nation. The court had jurisdiction over
the persons of the parties, as they were both residents of Manila. It also had
jurisdiction over the subject matter, because CFIs of the Philippine Islands
have the power and jurisdiction to try actions for divorce.
• At present, PH courts no longer try actions for divorce even if brought
by persons whose national laws allow it.
• Contrary to public policy.
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C. BEGINNING AND END OF PERSONALITY
• Determination of beginning is referred to individual’s personal law.
• Examples:
o German CC: upon completion of the person’s birth.
o Spanish CC: must be alive for at least 24 hours.
• Our Civil Code provides:
Article 40. Birth determines personality; but the conceived child shall
be considered born for all purposes that are favorable to it, provided it
be born later with the conditions specified in the following article.
(29a)
Article 41. For civil purposes, the foetus is considered born if it is
alive at the time it is completely delivered from the mother's womb.
However, if the foetus had an intra-uterine life of less than seven
months, it is not deemed born if it dies within twenty-four hours after
its complete delivery from the maternal womb. (30a)
• Tolentino: before birth, fetus is not a person but a part of the internal
organ of the mother.
o Expectancy that it will be born, thus the law affords it
protection.
o Its legal existence, if it should be born alive, retroact to the
moment of its conception.
• Geluz v. CA: No cause of action for damages on behalf of unborn
child, because CC states that it should be subsequently born alive.
o But damages may be awarded to the parents for such
damage directly sustained by them.
• As civil personality is commenced at birth, it is extinguished by death.
• Declaration of death by a competent court is considered valid for all
purposes.
• Some rights and obligations are extinguished by death but others are
transmitted to his heirs/successors.
• Limjoco v. Intestate Estate of Fragrante:
o Purpose of an estate as an artifical person is to enable proper
disposition of the assets of the deceased.
o Bill of Rights makes no distinction between natural and
artificial persons as to the due process clause and the right
against unreasonable searches and seizures.
o Pending application for a CPC is a right that survived the
decedent’s death.
o Estate can still be considered the applicant for such CPC.
Ish Guidote
D. ABSENCE
• Domestic laws of various countries do not treat absentees alike.
• Ways to deal with this problem:
o Rebuttable presumption that a person is dead after absence
for a specified number of years;
o Person’s unexplained absence is judicially investigated and
established which results in legal effects similar to those of
death; and
o Judicial decree shall be issued declaring the person dead
before legal effects of death take place.
• Philippine laws follow the rebuttable presumption:
Article 390. After an absence of seven years, it being unknown
whether or not the absentee still lives, he shall be presumed dead for
all purposes, except for those of succession.
The absentee shall not be presumed dead for the purpose of opening
his succession till after an absence of ten years. If he disappeared
after the age of seventy-five years, an absence of five years shall be
sufficient in order that his succession may be opened. (n)
Article 391. The following shall be presumed dead for all purposes,
including the division of the estate among the heirs:
(1) A person on board a vessel lost during a sea voyage, or an
aeroplane which is missing, who has not been heard of for four years
since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has
been missing for four years;
(3) A person who has been in danger of death under other
circumstances and his existence has not been known for four years.
(n)
• Declaration of death is required for certain purposes, such as a
subsequent marriage under FC41.
o Otherwise, marriage void.
o Periods reduced to 4 and 2 years, considering modern means
of communications.
• Legal effects of absence and restrictions on the absentee’s capacity
to act are determined by his personal law.
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E. NAME
• Beale: Determination of name is not a problem of status because a
person is traditionally free to assume a name and change it at will.
• At present: Name cannot be changed without judicial intervention.
• NCC364-366 govern use of surnames.
• NCC376 provides that no person can change his name or surname
without judicial authority.
• Grounds allowed under jurisprudence:
o Ridiculous, tainted with dishonor, extremely difficult to
pronounce;
o Change is necessary to avoid confusion;
o Right to new name is consequence of change in status;
o Sincere desire to adopt a Filipino name to erase signs of
former alien nationality which unduly hamper social and
business life.
• Padilla v. Republic: name is a reflection of one’s paternity.
o Affects status of child as legitimate or illegitimate.
o Confusion as to paternity is a valid ground for denial of
petition for change of name.
• WoN change of name is valid depends on alien’s personal law.
F. AGE OF MAJORITY
• Legal disability attached to minority and rights recognized upon
attainment of age of majority are aspects of personal status.
• Individual’s personal law determines whether he has attained the age
of majority.
• Once emancipated, parental authority is terminated and the person is
qualified and responsible for all acts of civil life, subject to certain
exceptions.
o Parents’ continued observance of responsibilities under Art.
46, PD603.
• RA 6809 lowered the age of majority from 18 to 21. Parental consent
to contract marriage required until age 21.
G. CAPACITY
• Ability to act with legal effects is governed by personal law.
o It is best qualified to decide what restrictions should be
imposed on the individual.
• Incapacities attached to legal status follow the individual wherever he
goes.
• Those who contract with another must first ascertain his legal
capacity.
Ish Guidote
o Nearly impossible task—investigate the personal law of
another to see if his capacity to act is limited.
• Exceptions to the general rule:
o Torts – law of the place of the tort;
o Restrictions on the contracting capacity of a married woman
– can be governed by law governing the spousal relations.
• Another problem arises when a person who is fully capacitated under
his personal law enters into a contract to be performed in a foreign
country that does not consider him capable of contracting.
Insular Government v. Frank
The petitioner entered into an employment contract with Frank in Chicago. He
started performing his duties as a stenographer but later abandoned his post
and refused to comply with the terms of the contract. Petitioner filed an
action to hold Frank liable for travel expenses in accordance with the
contract. Frank claims that he was a minor at the time he executed the
contract, thus, the contract is void. CFI ruled for plaintiff.
HELD: Frank is liable under the contract. The contract was entered into in
Illinois. Under the laws of that state, Frank was already an adult and had full
authority to contract. Matters bearing upon the execution, interpretation and
validity of a contract are governed by lex loci contractus.
• Court applied lex loci contractus but the result would have been the
same had it applied Frank’s personal law.
• Difficulties attached to determining what the individual’s personal law
is and the issue of WoN he should be governed by such law have led
courts to compromise.
• Distinctions must be made between:
o Situations which call for the law of the contract as demanded
by local interests (e.g. need for stability in commercial
transactions), and
o Those where protective policies are enshrined in one’s
personal law (e.g. transactions involving family relations).
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 PART FOUR: CHOICE OF LAW PROBLEMS
Chapter XII
CHOICE OF LAW IN FAMILY RELATIONS
• Problems in conflict of laws began from the time people ventured
beyond their immediate surroundings and entered into transactions
and relations that were necessarily connected to more than one legal
system.
o Interstate/international families whose family relations span
the globe.
• Marriage between a man and a woman in a country other than that of
their nationality—questions may arise as to:
o Personal and property relations;
o Status and rights of their children
! Use of the father’s surname;
! Right to inherit.
• Family law is an area of law which reflects strong state policies
anchored on values highly held by its society.
• Emotions rule but once created, family relations give rise to grave
individual and societal concerns.
• Family law is thus one of the most complicated and sensitive areas to
be dealt with from a conflict of laws perspective.
A. MARRIAGE
Article 1, Family Code. Marriage is a special contract of permanent union
between a man and a woman entered into in accordance with law for the
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. (52a)
• Full significance of this definition is realized when juxtaposed with
NCC15.
o Lex nationalii governs questions of family rights and duties,
status, conditions and capacity.
• As a contract:
o Marriage is a declaration of the contracting parties in the
presence of—
Ish Guidote
! Solemnizing officer
! Two witnesses of legal age
o That they take each other as husband and wife,
o Signed or marked by the contracting parties and their
witnesses, and
o Attested by the person solemnizing the marriage.
o It is a special contract because:
! It must be entered into by a man and a woman;
! They must be at least 18 years of age;
! It is solemnized by an officer specifically authorized
by law;
! It is a permanent union unless—
• One of the parties dies;
• The marriage is declared void or annulled.
! It cannot be abrogated, amended or terminated by
one or both parties at will;
! Nature and consequences are governed by law and
are not subject to stipulation;
! Violation of marital obligations may give rise to penal
or civil sanctions.
• Breach of ordinary contract entitles party to
damages.
1. PHILIPPINE POLICY ON MARRIAGE AND THE FAMILY
§2, Art. XV, 1987 Constitution. Marriage, as an inviolable social institution, is
the foundation of the family and shall be protected by the State.
• In order to give stability to the institution of marriage, there is a
presumption of validity of marriage as embodied in NCC220:
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.
• Purpose of the principles:
o To guide the courts;
o To further strengthen the solidarity of the family; and
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 o To impress upon its members the importance of the family
and the paramount interest the state has in preserving it.
2. EXTRINSIC VALIDITY OF MARRIAGE
• Many conflict rules distinguish between extrinsic and intrinsic validity
of marriage.
• Extrinsic – referred to lex loci celebrationis.
o Formalities
o External conduct required of the parties or of third persons
especially of public officers, necessary to the formation of a
legally valid marriage.
• Hague Convention: Formal requirements for marriage are governed by
the law of the state of celebration.
• GENERAL RULE: All states recognize as valid marriages celebrated in
foreign countries provided they comply with the legal formalities
prescribed there.
• Formal requisites under FC3:
The formal requisites of marriage are:
(1) Authority of the solemnizing officer;
(2) A valid marriage license except in the cases provided for in
Chapter 2 of this Title; and
(3) A marriage ceremony which 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. (53a, 55a)
• Furthermore, ¶1, Art. 26 provides:
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, except those
prohibited under Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a)
Adong v. Cheong Seng Gee
Cheong Boo, a Chinese subject, died intestate in Zamboanga. There are two
conflicting claimants to his estate: petitioner, his alleged wife, and
respondent, an alleged legitimate child of the decedent and Tan Dit who were
Ish Guidote
married in China in 1935. CFI favored petitioner after finding that the evidence
did not sufficiently establish the Chinese marriage. Respondent claims that
the marriage was adequately proven by a matrimonial letter.
HELD: The marriage of the decedent in China was not sufficiently proven. To
establish the validity of a foreign marriage it is necessary to prove (1) the
foreign law as a question of fact, and (2) the alleged foreign marriage by
convincing evidence. Here, there is lacking proof so clear, strong and
unequivocal to produce a moral conviction of the existence of the alleged
prior Chinese marriage.
People v. Mora Dumpo
Moro Hassan and Mora Dumpo were legally married under Muslim rites.
Dumpo remarried without having her first marriage dissolved, so Hassan
charged her with the crime of bigamy. Dumpo was convicted. She now
appeals her conviction on the ground that her second marriage was void ab
initio as her father’s consent thereto was not obtained.
HELD: Dumpo’s second marriage is void. While no judicial notice may be
taken of the formal requisites for the validity of a Muslim marriage, Dumpo
presented the testimony of an Imam to prove that the consent of the bride’s
father is indispensable to the validity of a marriage. The state did not present
any controverting evidence. Moreover, Dumpo’s father categorically declared
that he did not consent to his daughter’s second marriage. Since the second
marriage cannot be considered valid, there is no justification to hold Dumpo
guilty of the crime charged.
Wong Woo Yu v. Vivo
Petitioner sought admission to the Philippines as the wife of a Filipino,
Perfecto Blas. She alleged that they were married in China by a village leader.
Petitioner was admitted to the Philippines as a non-quota immigrant, but as
the Board of Special Inquiry changed its composition, the decision was
reversed.
HELD: Petitioner was not able to prove her marriage to Blas. She should have
presented Chinese law on the matter. Since she did not do so, the doctrine of
processual presumption applies. Under Philippine law, a village leader is not
among the persons authorized to solemnize marriages. Hence, her marriage
to Blas cannot be recognized in this jurisdiction.
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 Apt v. Apt
Petitioner and respondent are German nationals of Jewish origin. Respondent
moved to Argentina. He wrote to petitioner proposing marriage, and she
accepted. Consequently, a proxy marriage was celebrated in Argentina
between respondent and an agent of petitioner (with SPA executed before a
London notary). Petitioner later filed for declaration of nullity of marriage.
Under English law, petitioner’s domiciliary law, the marriage would be void.
But under Argentinian law, proxy marriages are recognized.
HELD: The marriage is valid. Celebration of marriage by proxy is a matter of
form, thus governed by lex loci celebrationis.
• NCC71 provided that bigamous, polygamous and incestuous
marriages were exceptions to the rule of lex loci celebrationis.
• FC26 expanded the exceptions to 16:
1. Either or both parties are below 18 years of age;
2. It is bigamous or polygamous;
3. A subsequent marriage is performed without recording in the
Civil Registry and Registry of Properties the judgment of
annulment or declaration of nullity of the first marriage, the
partition and distribution of the properties of the spouses and
the delivery of the children’s presumptive legitimes;
4. Mistake as to the identity of the contracting party;
5. One of the parties was psychologically incapacitated to
comply with the essential marital obligations;
6. Marriage is incestuous;
7. Marriage is void by reason of public policy.
• These exceptions relate to the capacity of parties to enter into the
marriage, therefore substantive.
o Personal law of the parties (national law of Filipinos) thus
governs.
o They are exceptions to lex loci celebrationis because they are
governed by lex nationalii.
3. INTRINSIC VALIDITY OF MARRIAGE
• Intrinsic – refers to capacity or the “general ability of a person to
marry, for instances defined by requirements of age and parental
consent, but does not refer clearly to an individual’s being permitted
to marry a specific person or person of a determinate class.”
• Municipal laws provide the substantive requirements of a valid
marriage.
Ish Guidote
• Philippine law requires:
o Legal capacity – must be at least 18 years old, without legal
impediments;
o Consent freely given in the presence of the solemnizing
officer.
! Matrimonial consent means that the parties are at
least, not ignorant that the marriage is a permanent
union.
• In mixed marriages, the law governs the substantive validity of
marriage is the national law of the parties.
• FC38 enumerates the marriages that are void on the grounds of
public policy:
The following marriages shall be void from the beginning for reasons
of public policy:
(1) Between collateral blood relatives whether legitimate or
illegitimate, up to the fourth civil degree;
(2) Between step-parents and step-children;
(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the
adopted child;
(6) Between the surviving spouse of the adopted child and the
adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other,
killed that other person's spouse, or his or her own spouse. (82)
• Hague Convention allows a contracting state to refuse recognition of
the marriage if:
o One of the spouses was already married;
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 o Spouses were related to each other, either by blood or by
adoption, in the direct line or as brother or sister;
o One of the spouses had not attained the minimum age
required for marriage nor acquired the necessary
dispensation;
o One of the spouses did not have the mental capacity to
consent;
o One of the spouses did not freely give consent to the
marriage.
EAP: Always ask if the question involves essential or formal requisites of
marriage.
• If the issue is intrinsic validity (essential requisites), look at Art. 15,
Civil Code.
• If the issue is extrinsic validity (formal requisites), look at Art. 26, par.
1 of the Family Code.
Sottomayor v. De Barros
Sottomayor and De Barros were Portuguese subjects and first cousins. They
got married in London. Portuguese law would classify their marriage as
incestuous. Sottomayor sought to have the marriage declared void. The trial
court refused to do so.
HELD: The marriage is void. Lex loci celebrationis governs issues relating to
the validity of the marriage ceremony. However, personal capacity of the
parties must be governed by the lex domicilii. Since the parties are
Portuguese subjects, the laws of that country apply.
In Re: May’s Estate
Sam and Fannie May were married in Rhode Island, but residents of New
York. They decided to marry in Rhode Island because under New York law,
their marriage would be void, Fannie being Sam’s half-blood niece. After
Fannie’s death, one of the couple’s six children petitioned for the issuance of
letters of administration on the ground that the Mays’ marriage was void
under New York law. The surrogate court agreed.
HELD: The marriage was valid. GENERAL RULE: Rights dependent upon
nuptial contracts are to be determined by the lex loci. EXCEPTIONS:
1. Cases within the prohibition of positive law; and
2. Cases involving polygamy or incest in a degree regarded generally as
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within the prohibition of natural law.
Neither of the exceptions is applicable. While New York law declares to be
incestuous and void a marriage between an uncle and a niece, it does not
regulate marriages solemnized between its domiciliaries in another state
where the marriage is concededly legal. The marriage between the Mays was
not so offensive to the public sense of morality to a degree regarded generally
with abhorrence.
• Christianity prohibits polygamous and incestuous marriages—
doctrine must be confined to cases deemed incestuous by the
general consent of all Christendom.
• Court may withhold recognition of foreign marriage by invoking public
policy.
o Marriages which are manifestly incompatible with the ordre
public of the state of which the parties are nationals may be
refused recognition.
o This rule should not apply where the question of marriage is
only incidental to the resolution of another issue.
• In Re Dalip Singh BIR’s Estate:
o Singh died leaving two purported legal wives, both claiming to
have married the decedent in Punjab over 50 years ago in
accordance with the laws of that state.
o Court ruled that both marriages were valid.
o Decedent died in CA. Under the laws of CA, only the first wife
is the legal widow.
o Petitioners claim that both marriages should be declared as
valid on the strength of CC63, similar to FC26.
o HELD: Polygamous marriages can be recognized in English
law as to confer on the wives the status of a wife, for
purposes of §10 of the British Nationality and Status of Aliens
Act or for the purpose of succession, and upon the children,
the status of legitimacy.
Marriages Celebrated by a Consular Official
• Hague Convention: marriages celebrated by a diplomatic
agent/consular official in accordance with state law shall be valid as
long as it is not prohibited by the state of celebration.
• Under the FC, Philippine Consul General/Consul/Vice-Consul may
perform a marriage between Filipino nationals as long as the formal
and essential requisites are complied with.
o Includes valid marriage license + publication and registration.
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 o Also applicable to Filipino-Alien as long as the alien complies ! Immigration laws are still applicable and the marriage
with the requisites under his national law. does not excuse the alien from her failure to depart
o Additionally, the alien must present a Certificate of Legal the country upon the expiration of her extended stay
Capacity to Contract Marriage issued by his here as an alien.
diplomatic/consular office. • Restatement 2d: Wife who lives with her husband has the same
o If one is stateless, he must submit an affidavit setting forth domicile as his, except when special circumstances of the wife make
circumstances showing his legal capacity to marry in lieu of such result unreasonable.
the affidavit. o Previous chapter: constructive domicile assigned to wife
constitutes gender-based discrimination.
4. EFFECTS OF MARRIAGE
Property Relations of Spouses
Personal Relations Between the Spouses • Hague Convention: Property relations to be governed by—
• Includes: o Internal law designated by the spouses before the marriage;
o Mutual fidelity or
o Respect o Internal law of the state in which both spouses fix their first
o Support habitual residence.
o Cohabitation • Here, FC80 states:
o Support
o Right to use the husband’s surname In the absence of a contrary stipulation in a marriage settlement, the
• These are governed by the national law of the parties. property relations of the spouses shall be governed by Philippine
o If they are of different nationalities, generally, the husband’s laws, regardless of the place of the celebration of the marriage and
national law prevails as long as it is not contrary to law, their residence.
morals, good customs of the forum.
• FC69 provides: This rule shall not apply:

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

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B. DIVORCE AND SEPARATION
• Two kinds:
o Absolute
o Limited
• Absolute divorce – Termination of the legal relationship between the
spouses by an act of law.
• Relative divorce/legal separation – separation from bed and board
which does not affect the dissolution of the marital ties.
o Modifies the incidents of the marriage; spouses no longer
required to live with each other.
o Since the court may order the payment of support by one
spouse, it must have personal jurisdiction over such spouse
and the property it seeks to affect by its decree.
• NO CONFLICT WHEN: Spouses are nationals of the same country,
domiciled and divorced there.
• When any one of those factors is governed by the laws of another
state, a conflict arises.
o Problems:
! Recognition of decree
! Division of marital property
! Claim to custody
! Provisions for support
• Most countries exercise divorce jurisdiction on the basis of:
o Domicile of one of the parties; or
o Matrimonial domicile.
• Rationale: Divorce, being a matter of concern of the state, should be
governed by the law of the place where the person is most intimately
concerned, the place where he dwelleth and hath his home.
o Forum court must have substantive contract with the
relationship which by its laws it will decide whether or not to
dissolve.
• Hague Convention: Granting of divorce/separation must comply with
the national law of the spouses AND the law of the place where the
application for divorce is made.
• Codigo Bustamante/Siamese law:
o Right to divorce – national law of the spouses
o Grounds – forum law, provided the parties were domiciled
there.
• Grounds are dictated by lex fori.
o Many states refuse to recognize a foreign ground for divorce
unless it is also a ground under forum law.
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o This practice is followed whether the choice-of-law approach
used is traditional or policy-centered.
1. DIVORCE DECREES OBTAINED BY FILIPINOS
• Decrees of absolute divorce obtained by Filipinos abroad are of no
validity and are not recognized in the PH.
• Marriage between Filipino and foreigner is susceptible to divorce if
obtained only by the alien spouse.
• ¶2, FC26 provides:
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law. (As amended by
Executive Order 227)
• This provision has the effect of partial recognition of divorce.
• If it is obtained by the Filipino spouse, it is of no effect.
• Rationale: uneven status of Filipino nationals whose alien spouses
obtained divorce abroad and remarried other persons while the
Filipino spouses remained married to them in the eyes of PH law.
Tenchavez v. Escaño
Escaño married Tenchavez without the knowledge of her parents. She later
filed for divorce in the US, and a Nevada court issued a divorce decree. She
remarried and acquired US citizenship. Back in the Philippines, Tenchavez
filed for legal separation. Escaño pleaded the divorce granted by the Nevada
court. The trial court dismissed the action for legal separation but relieved
Tenchavez from the obligation to give support.
HELD: The divorce granted by the Nevada court is not valid in the Philippines.
At the time Escaño obtained the decree, she was still a Filipino citizen. Hence,
Art. 15 of the Civil Code applies. To recognize the foreign divorce would be in
patent violation of the declared public policy of the State. Furthermore, it
would result in discrimination in favor of wealthy citizens who can afford to
go abroad to get divorce. It is irrelevant that Tenchavez appeared before the
Nevada court. Mere appearance of a non-resident cannot confer jurisdiction
where the court originally had none.
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 Van Dorn v. Romillo
Alice Reyes-Van Dorn, a Filipina, married Richard Upton, an American. They
obtained a divorce in the US. Thereafter, petitioner married Theodore Van
Dorn. In the Philippines, Upton filed a complaint for accounting before the
RTC of Pasay concerning alleged conjugal properties. Petitioner filed a
motion to dismiss and pleaded the foreign divorce which stated that they had
no community property. The motion was denied.
HELD: The divorce is valid in the Philippines. It is true that NCC15 prohibits
Filipinos from obtaining divorces. However, the alien spouse may validly do
so provided such is allowed by their national law. Pursuant to US law, Upton
is no longer petitioner’s husband. To maintain that she is still married to him
cannot be just. Petitioner should not be discriminated against in her own
country.
Pilapil v. Ibay-Somera
Pilapil, a Filipina, was married to Geiling, a German. The husband initiated
divorce proceedings in Germany, while the wife filed an action for legal
separation before the CFI of Manila. The German court granted the divorce.
Geiling later filed a criminal complaint for adultery against Pilapil. The latter
filed a motion to quash, but the same was denied.
HELD: The trial court was without jurisdiction to try the criminal case.
Adultery is a private crime which must be prosecuted by the offended spouse.
At the time Geiling filed the complaint, he was already divorced from
petitioner. He being no longer the husband of Pilapil, had no legal standing to
commence the case.
Quita v. Court of Appeals
Fe Quita married Arthur Padlan in the Philippines. She went to California and
obtained a divorce. Quita remarried twice. Padlan died intestate in the
Philippines. During the estate proceedings, one Dandan asserted that she
was Padlan’s legitimate spouse. She presented the divorce decree between
Quita and Padlan.
HELD: The case must be remanded for determination of Quita’s citizenship at
the time the divorce was granted. If she was a Filipino, Tenchavez would
apply and the divorce would be invalid. But if Quita was already an American,
then the applicable ruling would be that in Van Dorn.
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Republic v. Orbecido III
Orbecido and Villanueva, both Filipinos, were married in Ozamis City. They
had two children. Villanueva moved to the US with their son. Later, Orbecido
learned that Villanueva was naturalized as a US citizen. She also obtained a
divorce and married a certain Stanley. Cipriano thereafter filed a petition for
authority to remarry before the RTC, invoking ¶2 of Art. 26, Family Code. The
trial court granted the petition.
HELD: Orbecido may remarry. On its face, ¶2, Art. 26 appears to apply only to
mixed marriages. Note however the CBCP’s comment that the provision
discriminates against those whose spouses are Filipinos who divorce them
abroad. They cannot remarry while the spouses of foreigners who validly
divorce them abroad can. According to Sempio-Diy, the intent of the law is to
avoid the absurd situation where the Filipino spouse remains married to the
alien spouse who, after obtaining a divorce, is no longer married to the Filipino
spouse. The twin elements for application of ¶2, Art. 26 are:
1. A valid marriage between a Filipino citizen and a foreigner; and
2. A valid divorce obtained abroad by the alien spouse capacitating him
or her to remarry.
The reckoning point is not the citizenship of the parties at the time of the
celebration of the marriage, but their citizenship at the time the divorce is
obtained. Here, Cipriano has not adduced sufficient proof as to the foreign
divorce decree and the naturalization of Villanueva. Hence, his petition for
authority to remarry cannot be granted.
EAP: The court arrived at the correct conclusion using the wrong legal basis.
¶2, Art. 26 applies only to mixed marriages. While the Court correctly ruled
that the reckoning point is the parties’ citizenship at the time the divorce was
obtained, the applicable provision of law is Art. 15 of the Civil Code
(nationality principle) and not Art. 26 of the Family Code.
San Luis v. San Luis
Felicisimo San Luis contracted three marriages. His first wife predeceased
him, while his second wife, an American named Merry Lee, obtained a divorce
in Hawaii. Felicisimo married his third wife, Felicidad, in California. After
Felicisimo died, Felicidad filed a petition for issuance of letters of
administration. One of the children of the first marriage opposed alleging that
the marriage between Felicisimo and Felicidad was void for being bigamous.
The trial court dismissed the petition on the ground that the divorce obtained
by Merry Lee cannot be recognized in the Philippines. CA reversed.
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HELD: A Filipino spouse is capacitated to remarry by vitrtue of a decree of
absolute divorce obtained by an alien spouse. However, in this case, there is
no adequate proof as to the validity of the divorce and the validity of
Felicisimo’s marriage to Felicidad under US law. The case must be remanded
to the trial court for further reception of evidence.
Bayot v. Court of Appeals
Vicente and Rebecca Bayot were married in Mandaluyong City. Rebecca was
an American citizen, having been born in Guam to American parents. She
obtained a divorce in the Dominican Republic. Rebecca subsequently filed a
petition for declaration of nullity of marriage under Art. 36 before the RTC.
Vicente filed a motion to dismiss for failure to state a cause of action. The
trial court denied the MTD.
HELD: The petition for declaration of nullity should be dismissed. At the time
Rebecca obtained the divorce, she was an American citizen. Even if she later
acquired Filipino citizenship, she chose her US citizenship to govern her
marital relationship. She was bound by the laws of the US, a country that
allows divorce. It follows that as a result of the issuance of the divorce
decree, the marital bond between the spouses was severed. Rebecca
therefore has no cause of action against Vicente.
Corpuz v. Sto. Tomas
Corpuz was a natural-born Filipino who became a naturalized Canadian
citizen. He returned to the Philippines and married Sto. Tomas. When he
discovered that his wife was having an affair, he instituted divorce
proceedings in Canada. A divorce decree was issued. Several years later,
Corpuz wished to marry another Filipina. He tried to register the divorce
decree with the Civil Registrar, but registration was refused. Corpuz then filed
a petition for judicial recognition of the foreign divorce. The RTC denied the
petition on the ground that ¶2 of Art. 26 can only be invoked by the Filipino
spouse.
HELD: ¶2, Art. 26 does not extend to aliens the right to petition a Philippine
court for recognition of a foreign divorce. The substantive right is established
in favor of the Filipino spouse. Our courts cannot make a declaration as to the
capacity of the alien spouse to marry in view of the nationality principle.
Nonetheless, Corpuz is possessed of sufficient legal interest to enable him to
file for recognition of the foreign divorce under the Rules of Court. But since
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he failed to include a copy of the Canadian law on divorce, the case must be
remanded to the RTC for futher proceedings.
2. VALIDITY OF FOREIGN DIVORCE BETWEEN FOREIGNERS
• Hague Convention: foreign divorce will be recognized in all
contracting states if, at the date of the institution of proceedings:
o Respondent/petitioner had his habitual residence there;
o Both spouses were nationals of that state; or
o If only the petitioner was a national, he should have his
habitual residence there.
• US:
o State has the duty to recognize divorce pronounced by
another state where both parties are domiciled there.
o If it is only the plaintiff, other conditions must be satisfied
(e.g. service of process to defendant).
o A divorce rendered by a foreign country is not subject to the
full faith and credit clause, but would be recognized under the
same circumstances that a sister state’s divorce decree is
given recognition.
! Jurisdiction of foreign court based on domicile.
• PH:
o No specific provision.
o Foreign divorce between foreigners should be recognized
under the principle of comity.
! Provided it does not violate a strongly held policy of
the Philippines.
C. ANNULMENT AND DECLARATION OF NULLITY
• Also affects the status and domestic relations of the parties.
• Based on defects existing at the time of celebration of marriage.
o In divorce, ground occurs after celebration.
• For states whose choice-of-law approach is traditional, the grounds
follow lex loci celebrationis.
• For those who follow the policy-centered approach, applicable law is
the law of the state of marital domicile.
o Has the most significant interest in the status of the spouses.
• In both approaches, lex fori plays no substantial role since the action
turns on the validity of the marriage.
• The following states can claim adequate jurisdictional basis to hear a
conflicts case:
o State where marriage was celebrated;
o State where parties have their marital domicile.
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 • Whealton v. Whealton: even a court which acquires only personal
jurisdiction over the parties can grant an annulment decree.
• Example of conflicts annulment case:
o Both parties are domiciliaries of State A, 18 years old.
o Married in State B without knowledge of parents.
o Annulment brought in State C, husband’s residence.
o What law applies?
! Following lex loci celebrationis, State B law. If such
law requires parental consent, then annulment may
be granted.
! If the most significant relationship approach is used,
State A law (marital domicile). If the law states that
they have full capacity, no ground for annulment.
! Choice of law rule of State C is irrelevant.
D. PARENTAL RELATIONS
• Issue of legitimacy is submitted to the personal law of the parents.
• Personal law of father is used to determine legitimate relationship.
o German law: head of the family
• Paternity – civil status of the father/mother with respect to the child
begotten by him/her.
• Filiation – status of the child in relation to his parents.
• PH law: legitimacy of child governed by the national law of the
parents.
o If different, national law of the father.
Determination of Legitimacy of a Child
Art. 163, Family Code. The filiation of children may be by nature or by
adoption. Natural filiation may be legitimate or illegitimate. (n)
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
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illegitimate, unless otherwise provided in this Code. (n)
• Personal law of illegitimate child is governed by the personal law of
the mother.
• If legitimated, personal law follows that of the father.
• Common law:
o Now provides that children born of certain invalid marriages
may still be legitimate.
o Illegitimate children may be legitimated by events occurring
after their birth.
• Differences in some states give rise to choice of law problems.
o Child may be legitimate as to one parent but illegitimate as to
the other.
• Restatement 2d:
o §287. Child legitimate if this would be his status under the
law of the state where:
! Parent was domiciled when the child’s status of
legitimacy is claimed to have been created; or
! Child was domiciled when the parent acknowledged
the child as his own.
o §288. A state usually gives the same incidents to a status of
legitimacy created by a foreign law under the principles
stated in §28 that it gives to the status when created by its
own local law.
! Persons legitimated may inherit land in the forum to
the same extent and under the same circumstances
as those legitimated under forum law.
Parental Authority Over the Child
• Roman law concept of patria potestas.
• Personal law of the father controls the rights and duties of parents
and children.
• Joint exercise of parental authority is mandated by FC211.
• If child is illegitimate, mother exercises parental authority under
FC176.
• Scope:
o Care and rearing of children for civic consciousness and
efficiency and the development of their moral, mental and
physical character and development.
o Actions for support.
o Requirements of parental consent to marriage.
o Discipline and chastisement.
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E. ADOPTION
• Adoption – the act by which relations of paternity and affiliation are
recognized as legally existing between persons not so related by
nature.
o Judicial act creating between two persons a relationship
similar to that which results from legitimate paternity and
affiliation.
• Adoption originally considered to supply solace to those who:
o Had no children;
o Lost their children.
• Now, adoption is given a social and moral purpose.
o Even those with biological children and single people can
adopt.
• The process of adoption affects the status of the parties, thus
governed by lex domicilii.
• Problem: if adopter is domiciled in one state and the child, in another.
o What court has power to create adoptions whose effects
would be recognized outside its jurisdiction?
o What law is applicable to adoption of or by a foreigner in the
forum?
• Since the main object of adoption is to provide for the welfare of the
child, then his personal law should apply.
• Use of the child’s personal law is weakened where his domicile is
merely constructed or if he is a citizen of a state where he does not
actually reside in.
o No basis for the courts to protect the interest of the child.
o Cannot supervise the relations between the child and the
adopters.
o This has led many states to consider the adopter’s personal
law as having reasonable basis for exercising jurisdiction,
either exclusively or concurrently.
• May an alien adopt a child in the Philippines?
o GENERAL RULE: No, because they have very different family
orientation, cultures, customs and traditions which could
pose a problem for Filipinos to adapt themselves to a new
environment.
o EXCEPTIONS: FC184 provides:
! (a) A former Filipino citizen who seeks to adopt a
relative by consanguinity;
! (b) One who seeks to adopt the legitimate child of his
or her Filipino spouse; or
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! (c) One who is married to a Filipino citizen and seeks
to adopt jointly with his or her spouse a relative by
consanguinity of the latter.
! Aliens not included in the foregoing exceptions may
adopt Filipino children in accordance with the rules
on inter-country adoptions as may be provided by
law.
• RA 8552 (Domestic Adoption Law) introduced significant changes in
the adoption law.
o §7(b) provides:
Any alien possessing the same qualifications as above stated
for Filipino nationals: Provided, That his/her country has
diplomatic relations with the Republic of the Philippines, that
he/she has been living in the Philippines for at least three (3)
continuous years prior to the filing of the application for
adoption and maintains such residence until the adoption
decree is entered, that he/she has been certified by his/her
diplomatic or consular office or any appropriate government
agency that he/she has the legal capacity to adopt in his/her
country, and that his/her government allows the adoptee to
enter his/her country as his/her adopted
son/daughter: Provided, Further, That the requirements on
residency and certification of the alien's qualification to adopt
in his/her country may be waived for the following:
(i) a former Filipino citizen who seeks to adopt a relative
within the fourth (4th) degree of consanguinity or affinity; or
(ii) one who seeks to adopt the legitimate son/daughter of
his/her Filipino spouse; or
(iii) one who is married to a Filipino citizen and seeks to adopt
jointly with his/her spouse a relative within the fourth (4th)
degree of consanguinity or affinity of the Filipino spouse;
o Aliens must also present certification of legal capacity to
adopt, and that their state laws allow entry of an adoptee to
the adopter’s country as an adopted son or daughter.
! May be waived if adoptee is relative.
• RA 8043 establishes rules for adoption of Filipino children by aliens
and Filipino citizens permanently residing abroad.
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 o Passed in consideration of obligations under the Hague
Convention.
o Objectives of the Convention:
! To establish safeguards to ensure that inter-country
adoptions takes place in the best interests of the
child and with respect for his or her fundamental
rights as recognized in international law;
! To establish a system of cooperation amongst
Contracting States to ensure that those safeguards
are respected and thereby prevent the abduction, the
sale of, or traffic in children;
! To secure the recognition in Contracting States of
adoptions made in accordance with the Convention.
• Prior to RA 8043, what applied were the “Rules and Regulations on
Foreign Adoption” which implemented PD 603 and bilateral
agreements with foreign countries.
Republic v. Court of Appeals
Hughes, an American, married Mabunay, a Filipina. Mabunay was later
naturalized as a US citizen. The spouses sought to adopt Mabunay’s niece
and nephew who have been living with them even prior to the filing of the
petition. The minors and their parents consented to the adoption.
HELD: The spouses cannot adopt. Hughes, an alien, does not fall under any of
the exceptions in Art. 184 of the Family Code. On the other hand, while
Mabunay falls under the exception of a “former Filipino citizen seeking to
adopt a relative by consanguinity,” she cannot adopt alone as husband and
wife must jointly adopt if one of the spouses is an alien.
Effects of Adoption
• Body of rights and other legal effects may be governed by two laws
depending on which law governed the creation of the adoption.
o If adopter’s personal aw applied, same law governs effects.
o If child’s personal law applied, such law will cease to regulate
parent-child relations and will yield to the personal law of the
parents.
• Adoption relates to a civil right and does not effect changes in the
political rights of the adopter.
o Citizenship of adopter not automatically given to adopted
child.
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• Decree granting adoption is a foreign judgment, hence, principles on
recognition and enforcement of foreign judgment shall govern.
Uggi Lindamand Therkelsen v. Republic
Petitioner is Danish and a permanent resident of the Philippines. He is
married to Blancaflor, a Filipina. The spouses seek to adopt Blancaflor’s
natural child. The Juvenile and Domestic Relations Court denied the petition
because it would not result in the minor’s acquisition of Danish citizenship.
HELD: The petition for adoption must be granted. The law does not require
that the adoption must result in the minor child’s acquisition of the
citizenship of the adopter. The citizenship of the adopter is a matter political,
not civil, in nature, and the ways in which it should be conferred lay outside
the ambit of the Civil Code.
Ng Hian v. Collector of Customs
Ng Hian is the son of Ng Chion Tue by his first marriage. The latter married
Jiongco, a woman born in the Philippines to a Filipina mother and a Chinese
father. Jiongco adopted Ng Hian and decided to take him to the Philippines to
study. The Board of Special Inquiry refused Ng Hian the right to enter.
HELD: Ng Hian has the right to enter the Philippines. As an adopted child of a
person who has a right to enter the Philippines, he enjoys the same right.
Adopted children stand on equal footing with natural children. Since one can
bring his natural child to the United States, it follows that he can also bring
his adopted child to the United States.
Chapter XIII
CHOICE OF LAW IN PROPERTY
A. THE CONTROLLING LAW
• The classification of whether a particular piece of property is movable
or immovable usually determines the applicable legal system.
• For immovables: lex situs.
o Rationale: The characterization of immovable property as an
isolated object of rights so that the interests of various
persons are determined by the law of the place where the
property is situated.
o The connecting factor is the immovable itself and not the
parties concerned.
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 • For movables: may be lex domicilii, lex situs, lex loci actus, or the
property law of transfer.
o Old law: mobilia sequuntur personam – rights over movables
are governed by the domiciliary law of the owner.
! Rationale: Objects could be moved from place to
place, difficult to anticipate where they may be
situated at a given time.
! For purposes of simplicity and convenience.
o Lex situs
! Basis is the exercise of power. State where property
is located has the sole power to decide the validity
and effects of the transfer of property.
! Policy-centered rationale: Parties’ legitimate
expectations are protected.
• Normal expectation is for the contract to be
governed by the law of the state where the
object is located.
• Parties should know at time of conveyance
whether there is a valid transfer and the
nature of such.
o Lex loci actus – law of the place where the transaction was
located.
o Proper law of the forum – law of the state which has the most
real connection with the transfer.
• The Civil Code provides:
Article 414. All things which are or may be the object of appropriation
are considered either:
(1) Immovable or real property; or
(2) Movable or personal property. (333)
Article 16. Real property as well as personal property is subject to the
law of the country where it is situated.
• A conflicts problem will have to be resolved by Philippine courts only
where the property is located in a foreign country which has a law
that distinguishes between real and personal property.
• Thus, the Philippines follows the lex rei sitae rule.
o Rationale: Being physically part of the country, the property
should be governed by the laws thereof.
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o Even if one uses the modern approach, the place where the
property is located is still the state that is closely and
significantly related to the issue in question.
o The rule governs the following issues:
! Sale
! Mortgage
! Barter
! Exchange
! Lease assignment
! Any form of alienation
! Effects of co-ownership
! Quieting of title
! Taxation
! Registration
! Prescription
o Code Commission: Great increase in the amount and variety
of personal property not connected with the person of the
owner makes it advisable to adopt the doctrine of lex sitae
also to movables.
o Personal property may be separated from its owner, who may
be taxed on its account at the place where the property is
located, although he is not a domiciliary, citizen or resident of
the state which imposed the tax.
B. CAPACITY TO TRANSFER OR ACQUIRE PROPERTY
• This is governed by the law of the place where the property is located.
Llantino v. Co Liong Chong
The Llantinos leased land to Juan Molina, then a Chinese citizen who went by
the name Co Liong Chong. The parties disagreed as to the expiration of the
lease contract, thus, the Llantinos filed a complaint for quieting of title. The
trial court dismissed the complaint upon finding that the 60-year lease
provided in the contract was valid. The Llantinos allege that Molina being a
Chinese citizen at the time the lease was entered into, the contract is void.
HELD: The lease contract is valid. Under the Constitution, lease to an alien for
a reasonable time is valid. A lease may only be considered invalid if there are
circumstances attendant to its execution which are used as a scheme to
circumvent the constitutional prohibition. Even assuming that the lease
contract was invalid at its inception, it can no longer be challenged in view of
private respondent’s acquisition of Filipino citizenship.
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 Cheesman v. Intermediate Appellate Court
Thomas Cheesman, an American, was married to Criselda Cheesman, a
Filipina. They bought real property from one Altares in 1974, but the Deed of
Sale was executed in favor of Criselda only. Likewise, the property was
declared for tax purposes under Criselda’s name. After the parties separated,
Criselda sold the property to Padilla. Thomas sued for the annulment of the
sale. The trial court ruled in his favor.
HELD: The sale to Padilla was valid. The property was purchased using
Criselda’s personal funds, thus, it does not form part of the conjugal property
of the spouses. Furthermore, the Constitution prohibits the sale of residential
land to aliens; Thomas was charged with knowledge of this prohibition.
Assuming that it was his intention to buy the property together with his wife,
he knowingly violated the Constitution by doing so. Hence, the sale to him is
null and void. If the Court were to declare the property as conjugal, it would
amount to a circumvention of the constitutional prohibition.
C. EXTRINSIC AND INTRINSIC VALIDITY OF CONVEYANCES
• Formalities are governed by lex situs.
• Any transfer which requires registration of title cannot be accepted by
the Register of Property unless the formal requirements of the lex
situs are complied with.
• Validity and effect of conveyance of property are treated as a
question of property rather than contract.
• Lex situs also applies to the essential validity of the transfer unless
the lex intentionis is clearly established.
• Likewise, lex situs governs the effects of the conveyance of
properties.
Spouses Alcantara v. Nido
Revelen Srivastava verbally authorized her mother, herein respondent Nido, to
sell a parcel of land in Rizal. Petitioners-spouses offered to buy the same.
They paid the down payment but later defaulted. Nido filed a case to recover
possession of the lot from petitioners. The RTC ordered rescission of the
contract. The CA reversed holding that the unlawful detainer case should
have been filed with the MTC. Also, rescission is not proper because the
contract is void for want of written authority to sell as required by NCC1874.
HELD: The contract is void. A special power of attorney is required under Arts.
1874 and 1878 of the Civil Code. Nido only had a general power of attorney in
Ish Guidote
her favor. Even assuming that this would satisfy the requirements of the Civil
Code, the document cannot be admitted in evidence. It has not been proven
as a public/official record in accordance with the Rules of Court.
D. EXCEPTIONS TO LEX SITUS RULE
1. Where the transaction does not affect transfer of title to or ownership of
the land.
• Governing law is lex intentionis or lex voluntatis.
Liljedahl v. Glassgow
Bailey mortgaged a parcel of land in Colorado to Liljedahl as security for a
debt payable in Iowa. He later sold the same to Glasgow. The deed of sale
provided that the vendee would assume the mortgage debt. Glassgow, in turn,
sold the land to Hiatt and Hiatt sold the land to Hilger. Liljedahl sued
Glassgow for payment of the debt. Under Colorado law, Glassgow would not
be liable while under Iowa law, he became liable upon acceptance of the deed.
HELD: Iowa law applies. Contracts made and to be performed in a particular
state are made with reference to the law of that state, which the parties must
be presumed to have had in mind at the time of making the contract. Liljedahl
and Glassgow are both residents of Iowa. The contract was made there, and
the deed was delivered there. Likewise, payment of the debt was to be made
in Iowa. Here we are concerned with the assumption of mortgage clause,
which deals only with consideration and not title to the property per se. It
could have been the subject of a separate contract, and it must be construed
and given effect according to the laws of Iowa.
2. In contracts where real property is offered by way of security for the
performance of an obligation such as loan.
• Principal contract is loan, accessory contract is mortgage.
• Mortgage governed by lex situs but loan contract is governed by rules
on ordinary contracts.
3. Testate or intestate succession and capacity to succeed are governed by
the national law of the decedent.
• Under a policy-centered approach the forum court is not bound to
look at the law of the situs when the situs of the movable property at
the time of transfer was insignificant or incidental.
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 o If chosen for mere convenience of the parties, but both
parties knew that the property would be used principally in
another location.
! Then the governing law would be the law of the place
of principal use.
• Where the issue involves considerations other than the validity and
effect of the transfer itself, law of the state which has a real interest in
applying its law governs.
• Rudow v. Fogel: Issue was not with respect to title to property but to
WoN the conveyance would result in a constructive trust among
family members.
o Since all the family members were residing in another state,
the forum court applied the domiciliary laws of the parties
(trustor and trustees) instead of the lex situs of the property.
E. SITUS OF CERTAIN PROPERTIES
1. SITUS OF PERSONAL PROPERTY FOR TAX PURPOSES
• Mobilia sequuntur personam
o Mere fiction of law.
o Based on convenience and public policy.
• Cannot be applied to limit the right of the state to tax property within
its jurisdiction.
• Yields to established facts of legal ownership, actual presence, and
control elsewhere.
• Cannot be applied if it would result in inescapable and patent
injustice.
Asiatic Petroleum v. Co Quico
Asiatic appointed Co as its commission agent. The latter became indebted to
the former in the amount of P2,123. Without rendering an accounting, he went
to China. Asiatic filed a collection suit and succeeded in having Co’s property
attached. The trial court issued a writ of attachment over Co’s deposit with
the Mercantile Bank of China. Summons was served by publication. The trial
court rendered default judgment against Co and levied upon the bank deposit.
Co’s counsel entered a special appearance. The court declared the
proceedings null and void for want of jurisdiction over Co, since the complaint
was an action in personam.
HELD: The trial court had jurisdiction to decide the case. Service of summons
by publication was sufficient. All property within a state is subject to the
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jurisdiction of its courts, and they have the right to adjudicate title thereto,
enforce liens thereon, and subject it to the payment of the debts of its owners,
whether resident or not. The modern tendency is to make no distinction
between mobility and immobility of property established by the principles of
lex rei sitae and mobilia sequuntur personam.
2. SITUS OF MONEY
• Leon v. Manufacturers Life Insurance Co.: A contract was entered into
in Canada and was endorsed in an annuity.
o HELD: Situs of the money was in Canada, hence, outside the
probate jurisdiction of the Manila courts.
o The defendant in this case was only a branch office of the
Canada company who held the funds.
! Its only duty is to deliver checks issued and made out
by the home office to the annuitant.
o No showing that the funds have been transferred to the
Manila branch.
3. SITUS OF DEBTS
• Two kinds of movable property:
o Choses in possession – embraces all kinds of tangible
physical objects.
o Choses in action – refers to intangible objects.
! Rights of actions – ex. Debt arising from a loan.
! Rights represented by documents – those capable of
delivery and susceptible to negotiation as a separate
legal entity.
Harris v. Balk
Harris owed Balk $180. They were both residents of North Carolina. Balk
owned Epstein, a Maryland resident, more than $300. When Harris came to
Baltimore to buy merchandise, Epstein served him with a writ attaching the
debt which he owed Balk. Harris did not contest. However, back in North
Carolina, Balk sued Harris for collection of the $180. Harris pleaded the
Maryland judgment garnishing the debt. The court ruled for Balk finding that
the Maryland court had no jurisdiction to garnish the debt, its situs being in
North Carolina.
HELD: The Maryland court had jurisdiction. If the court acquires jurisdiction
over the garnishee, it can garnish the debt due from him to the debtor of the
plaintiff and condemn it. The only condition is that the garnishee could
Page 61 of 107
himself be sued by the creditor in that state. That Harris was only in Baltimore
temporarily is of no moment—the obligation to pay his debt clings to and
follows the debtor wherever he goes.
• This conclusion was based on two holdings:
o Debt, though intangible, is subject to seizure like tangible
property; and
o The debt is located where the debtor is located because it is
where he can be sued and the debt collected.
• Prof. Beale’s criticism: The decision did injustice to the creditor.
o The creditor is actually the owner of the property.
o Yet, he has no control over where his own property is located
because the debtor may travel all over.
• This issue remains unsettled in this jurisdiction.
o It is suggested that the law which governs the contract from
which the debt arises should also govern the transfer of the
debt.
4. SITUS OF CORPORATE SHARES OF STOCKS
Section 63, Corporation Code. Certificate of stock and transfer of shares. -
The capital stock of stock corporations shall be divided into shares for which
certificates signed by the president or vice president, countersigned by the
secretary or assistant secretary, and sealed with the seal of the corporation
shall be issued in accordance with the by-laws. Shares of stock so issued are
personal property and may be transferred by delivery of the certificate or
certificates indorsed by the owner or his attorney-in-fact or other person
legally authorized to make the transfer. No transfer, however, shall be valid,
except as between the parties, until the transfer is recorded in the books of
the corporation showing the names of the parties to the transaction, the date
of the transfer, the number of the certificate or certificates and the number of
shares transferred.
No shares of stock against which the corporation holds any unpaid claim
shall be transferable in the books of the corporation.
• The next case distinguishes between:
o Situs of the shares themselves; and
o Situs of the income derived from the sale of such shares.
Ish Guidote
Collector of Internal Revenue v. Anglo California National Bank
Anglo California National Bank is the trustee of CSEI, a resident foreign
corporation. The CIR assessed CSEI deficiency income taxes based on capital
gains derived from the sale of certain PASUMIL shares. The CTA cancelled
the assessment as the capital gains constituted income from sources without
the Philippines.
HELD: The income derived from the sale of the PASUMIL shares is not taxable
in the Philippines. While the rule with respect to the situs of shares of stock is
mobilia sequuntur personam, here we are concerned not with the shares
themselves but with the sale of such shares. The negotiation, perfection, and
consummation of the sale were all done in California. In accordance with the
NIRC, the profit derived therefrom shall be treated as derived entirely from
sources within the country in which sold.
F. PATENTS, TRADEMARKS, TRADE NAME, AND COPYRIGHT
• 27 Sept. 1965: Philippines became party to the Union Convention for
the Protection of Industrial Property.
o Art. 8: a “trade name shall be protected in all the countries of
the Union without the obligation of filing of registration,
whether or not it forms part of the trade name.”
• Western Equipment and Supply Co. v. Reyes:
o Western Electric Co. (WEC), Inc. is a foreign corporation duly
organized under the laws of NY.
! Not licensed to do business in the Philippines.
o A Nevada corporation imported WEC’s products into the
Philippines.
o Later, defendants Herman, et al. filed with the SEC articles of
incorporation for a corporation to be known as Western
Electric Company, Inc.
! Purpose: manufacture and dealing in electrical and
telephone apparatus and supplies.
o WEC filed a case to restrain the issuance of the certificate of
incorporation to defendants.
o HELD: Although WEC has not done in the Philippines, it has
the right to protect its reputation.
! Use of a company’s corporate and trade name is a
property right which may be asserted against the
whole world.
! Hanover Star Milling v. Allen: “Since it is the trade and
not the mark that is to be protected, a trademark
Page 62 of 107
 acknowledges no territorial boundaries of
municipalities or states or nations, but extends to
every market where the trader’s goods have become
known and identified by the use of the mark.”
• RA 8293 was passed in 1998 prescribing the Intellectual Property
Code and establishing the Intellectual Property Office.
o §123 (what cannot be registered): names “well known
internationally and in the Philippines, whether or not it is
registered here, as being already a mark of a person other
than the applicant for registration, and used for identical or
similar goods or services.”
o §3 provides:
International Conventions and Reciprocity. - Any person who
is a national or who is domiciled or has a real and effective
industrial establishment in a country which is a party to any
convention, treaty or agreement relating to intellectual
property rights or the repression of unfair competition, to
which the Philippines is also a party, or extends reciprocal
rights to nationals of the Philippines by law, shall be entitled
to benefits to the extent necessary to give effect to any
provision of such convention, treaty or reciprocal law, in
addition to the rights to which any owner of an intellectual
property right is otherwise entitled by this Act. (n)
! Thus, a foreign corporation may bring an action under
§160 of the IP Code.
o However, §156 of the Act allows only owners of registered
marks to recover damages from any person who infringes his
rights.
Philips Export B.V. v. Court of Appeals
PEBV is a foreign corporation not engaged in business in the Philippines. It
filed a letter-complaint against Standard Philips Corp. before the SEC asking
for cancellation fo the word “PHILIPS” from Standard Philips’ corporate name.
HELD: PEBV is entitled to the removal of the word. The use of a corporate
name and trade name is a right in rem—it can be asserted and protected
against the whole world. It is regarded as a property right which cannot be
impaired or defeated by subsequent appropriation by another corporation in
the same field.
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Emerald Garment Manufacturing Corporation v. Court of Appeals
H.D. Lee, a Delaware corporation, sought to cancel petitioner’s trademark
registration for the trademark “STYLISTIC MR. LEE.” It claimed that
petitioner’s trademark “so closely resembled” private respondent’s, “LEE,” as
previously registered and used in the Philippines. The Bureau of Patents
cancelled the registration. Petitioner now claims that H.D. Lee failed to prove
prior commercial use of the mark before filing its application for registration.
HELD: H.D. Lee is not entitled to the cancellation of petitioner’s trademark
registration. The trademark should be considered as a whole. The
dissimilarities between the two marks become conspicuous, noticeable and
substantial enough to matter. Also, private respondent failed to prove prior
actual commercial use of the mark “LEE” prior to the filing of its application.
Hence, it has not acquired ownership over said mark. For a foreign
corporation to have capacity to sue for infringement, it must prove actual use
and prior registration. On the other hand, petitioner has adequately proven
actual use since 1976 as evidenced by sales invoices.
Chapter XIV
CHOICE OF LAW IN CONTRACTS
• Pertinent provisions of the Civil Code involving contracts:
Article 1305. A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give
something or to render some service. (1254a)
Article 1315. Contracts are perfected by mere consent, and from that
moment the parties are bound not only to the fulfillment of what has
been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage
and law. (1258)
Article 1356. Contracts shall be obligatory, in whatever form they may
have been entered into, provided all the essential requisites for their
validity are present. However, when the law requires that a contract
be in some form in order that it may be valid or enforceable, or that a
contract be proved in a certain way, that requirement is absolute and
indispensable. In such cases, the right of the parties stated in the
following article cannot be exercised. (1278a)
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 • Principal purposes of contract law:
o Protect the reasonable expectations of parties to the
contract; and
o Secure stability in commercial transactions.
A. CONTRACTS INVOLVING A FOREIGN ELEMENT
• Due to modern means of communications, there are now more
contracts being entered into by people of varying nationalities, thus
giving rise to problems in conflict of laws.
• States may have different rules regarding:
o Formalities of a contract;
o Capacity of parties;
o Essential requisites for intrinsic validity;
o Interpretation of contracts; and
o Law governing execution of contracts.
• Forum court presented with a contract involving a foreign element
must be aware that the parties to the contract may have intended a
particular State law to govern.
o Must be ready to displace its own law with that earlier relied
upon by the parties.
• Moreover, many specific provisions in contracts (e.g. interpretations
of contracts) are merely designed to carry out the general policies of
contract law common to all states.
o Applied only when the lex loci intentionis of the parties
cannot be ascertained.
• Contract law does not reflect strong state policies grounded on a
particular society’s values.
o Thus the forum court is not prevented from supplanting
forum law with another state law.
B. EXTRINSIC VALIDITY OF CONTRACTS
• Governed by lex loci celebrationis.
• A contract is valid as to form “if in accordance with any form
recognized as valid by the law of the country where made.”
o Corollarily, no contract is valid which is not made in
accordance with the local form.
• If the contract does not comply with the formal requirements of the
lex loci celebrationis, it does not come into existence.
• Restatement 2d considers acceptable “formalities which meet the
requirements of the place the parties executed the contract.”
Ish Guidote
• NCC17 provides:
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. x x x
• These principles are derived from a broader proposition that the place
governs the act (locus regit actum).
• What about contracts entered into by cablegram, telex or fax? What is
the place of execution?
o NCC1319, par. 2 states:
Acceptance made by letter or telegram does not bind the
offerer except from the time it came to his knowledge. The
contract, in such a case, is presumed to have been entered
into in the place where the offer was made. (1262a)
o Engel v. Velasco: Where telegraphic communications are
followed by letters expressly referring to the telegrams and
confirming the same, such telegrams become admissible as
part of the correspondence between the parties.
C. INTRINSIC VALIDITY OF CONTRACTS
• Refers to the nature, content and effects of the agreement.
• NCC1318 states:
Article 1318. There is no contract unless the following requisites
concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (1261)
• Three possible laws:
o Law of the place of the making;
o Law of the place of performance;
o Law intended by the parties.
Page 64 of 107
1. LEX LOCI CONTRACTUS
• Refers to the law of the place where the contract is made.
• To determine where the contract is made, we look to the place where
the “last act is done which is necessary to bring the binding
agreement into being insofar as the acts of the parties are
concerned.”
• Advantage: relative ease in establishing the place of contracting.
o Certainty and stability are achieved.
• Disadvantage: may lead to unjust results where the place of making
is incidental or casual and has no significant relationship with the
contract or its performance.
2. LEX LOCI SOLUTIONIS
• Law of the place of performance.
• Governs all matters relating to the time, place and manner of
performance, sufficiency of performance and valid excuses for non-
performance.
o Connected to the contract in a significant way.
• Criticism: to allow the state where the contract is to be performed to
determine the validity of a contract made in another state is to give
extraterritorial effects to the laws of the former.
• Disadvantage: Not helpful when the contract is to be performed in
two or more states with conflicting laws on validity of contracts.
Macmillan and Bloedel v. T.H. Valderama and Sons
T.H. Valderama through its agent, Splane, entered into a contract in
Vancouver with Macmillan for the purchase of railroad equipment. Among the
terms of the contract was that Valderama should obtain an import license to
be able to open a letter of credit. He failed to do so, thus, Macmillan cancelled
the contract. It sought to recover damages from Valderama.
HELD: The governing law is Canadian law. It is both the lex loci contractus
and the lex loci solutionis. Splane was fully authorized by Valderama to enter
into the contract in Canada. On the other hand, the sale was FOB Vancouver,
thus the place of performance is in Vancouver.
3. LEX LOCI INTENTIONIS
• Dicey and Cheshire: the intrinsic validity of a contract should be
governed by the law intended by the parties.
• Intention may be expressed in a choice-of-law provision in the
contract.
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• NCC1306 provides:
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. (1255a)
• When the parties stipulate that the contract be governed by a specific
law, such will be recognized unless there are cogent reasons not to
(e.g. the public policy exception).
• Questions of construction and interpretation of contracts are within
the contractual capacity of the parties. The following are relevant
NCC provisions:
Article 1370. If the terms of a contract are clear and leave no doubt
upon the intention of the contracting parties, the literal meaning of its
stipulations shall control.
If the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former. (1281)
Article 1371. In order to judge the intention of the contracting parties,
their contemporaneous and subsequent acts shall be principally
considered. (1282)
• Parties may not have stopped and considered the effects of their
agreement.
o Thus, the law looks at their acts and circumstances to
determine which among them could have possibly exerted
influence upon their actions, and assumes that their
intentions are in harmony with such acts and circumstances.
o Rule on implied intention of parties finds application when the
issue is the validity of the contract. Parties presumed to have
contemplated entering into a valid contract.
! Forum court should apply the law of the place which
would sustain the contract’s validity.
D. CAPACITY TO ENTER INTO CONTRACTS
• Personal law of the parties applies (national or domiciliary law).
• In Insular Government v. Frank, Court disregarded lex nationalii and
instead applied lex loci celebrationis.
Page 65 of 107
 o The result, however, would have been the same had it applied
lex nationalii, because according to Frank’s national law, he
was already capacitated to enter into the contract.
E. CHOICE OF LAW ISSUES IN CONFLICTS CONTRACTS CASES
• Under the principle of freedom of contract, parties may stipulate on
the law to govern their agreement.
• Most troublesome:
o Validity of choice of law regarding venue in litigation and
arbitration;
o Contracts with adhesion clauses.
1. CHOICE OF FORUM CLAUSE
Compagnie De Commerce v. Hamburg Amerika
Compagnie (French corporation) entered into a charter party with Hamburg
(German corporation). The vessel which was to dock in Saigon received
orders to proceed to a neutral port for refuge due to rumors of impending war
between France and Germany. The vessel docked in Manila. Compagnie filed
for damages arising from breach of contract before the CFI of Manila.
Hamburg invoked the arbitration clause in the charter party requiring
submission of all disputes to a Board of Arbitration in England.
HELD: The CFI of Manila has jurisdiction, notwithstanding the arbitration
clause. There is an absence of averment and proof that under English law,
compliance with, or an offer to comply with an [arbitration clause] constitutes
a condition precedent to the institution of judicial proceedings for the
enforcement of the contract. Also, the issue of jurisdiction was raised only on
appeal.
King Mau v. Sycip
King Mau was appointed as Sycip’s agent in New York. The agreement was
embodied in a letter sent by King Mau from New York, which was accepted by
Sycip. After King Mau successfully sold 1,000 tons of coconut emulsion, he
filed a collection suit before the CFI for his commission. Sycip claims that the
CFI has no jurisdiction as the agency agreement was perfected in New York.
HELD: CFI has jurisdiction. A non-resident may sue a resident before
Philippine courts where the defendant may be summoned and his property
may be levied upon in case of judgment debt. There is no conflicts issue in
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this case, it is only a matter of enforcing the contract between the parties.
Hong Kong and Shanghai Banking Corporation v. Sherman
Respondents guaranteed Eastern Book Supply’s loan obligation to HSBC.
When the principal debtor defaulted, HSBC filed suit before the RTC of Quezon
City to enforce the guaranty. Respondents invoke the choice-of-forum clause
in the guaranty agreement in favor of Singapore.
HELD: The choice-of-forum clause cannot oust the RTC of jurisdiction. The
parties did not stipulate that ONLY the courts of Singapore, to the exclusion
of all the rest, have jurisdiction.
• In King Mau, the court held that “there is no conflict of laws involved
in this case.”
o This statement disregards the concept of conflict of laws as
encompassing all cases which have at least one foreign
element.
o Since the contract was executed in NY and the parties were
also based in NY, it is obvious that there are foreign elements
involved.
o In saying that “it is only a question of enforcing an obligation
created by or arising from contract,” the court must have
meant that there is only an APPARENT conflict.
! Using interest analysis, it could have determined that
the Philippines has no significant interest in applying
its own law.
! Thus, there is a false conflict and the law to be
applied is that of the interested state which is the lex
loci celebrationis.
• Parties may stipulate on the venue of the suit in case of litigation
concerning the contract.
o GENERAL RULE: Plaintiff decides venue.
o EXCEPTION: A case arising from the contract will be litigated
only in the forum chosen by the parties if the choice of forum
clause specifically identifies it as the ONLY venue.
o In Compagnie de Commerce, the Court upheld the jurisdiction
of the Philippine court in the absence of any showing that
compliance with the arbitration clause was a condition
precedent for the enforcement of the contract.
Page 66 of 107
 o Likewise, in HSBC, the Court held that the parties failed to
designate Singapore as the exclusive forum to the exclusion
of the rest.
• Restatement Second clarifies the extent to which choice-of-forum
clauses will be recognized:
Action in Another Place by Agreement. – If the parties have agreed in
writing that an action on a controversy shall be brought only in
another state and it is brought in a court of this state, the court will
dismiss or stay the action, as appropriate, unless:
1. The court is required by statute to entertain the action;
2. The plaintiff cannot secure effective relief in the other state, for
reasons other than delay in bringing the action;
3. The other state would be a substantially less convenient place for
the trial of the action than this state;
4. The agreement as to the place of the action was obtained by
misrepresentation, duress, the abuse of economic power, or other
unconscionable means; or
5. It would for some other reason be unfair or unreasonable to
enforce the agreement.
• There may be abuse of economic power in cases of contracts of
adhesion.
2. CONTRACTS WITH ARBITRATION CLAUSE
• Question: May one party compel the other to submit to arbitration?
• Meacham v. Jamertone, Franklin and Clearfield R.R. Co.:
o Arbitration clause: designated the Chief Engineer as arbiter to
decide all matters in dispute arising out of the contracts.
! His decisions were to be final and conclusive
between the parties thereto.
! Each and every party waives all rights of actions.
o American court declared this clause as contrary to the
declared policy of the courts.
Puromines, Inc. v. Court of Appeals
Puromines contracted with Philip Brothers for the purchase of urea. The
contract contained an arbitration clause stating that all disputes should be
settled in London. Since the urea arrived in bad order, Puromines filed a case
before the RTC against Philip Brothers and Maritime Factors, the shipagent.
Philip Brothers moved to dismiss invoking the arbitration clause. The RTC
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accordingly dismissed the case.
HELD: The dismissal of the case was proper. Petitioner derives its rights from
the bill of lading. The arbitration clause being incorporated into such bill of
lading, its provisions must be respected. Unless the agreement is such as to
absolutely close the doors of the courts against the parties, which agreement
would be void, the courts will look with favor upon such amicable
arrangements.
The Bremen, et al. v. Zapata Off-Shore Company
Zapata entered into a contract with Unterweser for the towing of is rig from
Louisiana to Italy. The rig was badly damaged, thus, Zapata filed a case
before the District Court of Tampa. Unterweser moved to dismiss invoking the
forum-selection clause in favor of London. Its motion was denied.
HELD: The case must be remanded for determination of the validity of the
forum-selection clause. A contractual choice-of-forum clause should be held
unenforceable if enforcement would contravene a strong public policy of the
forum in which the suit is brought, whether declared by statute or judicial
decision. A forum clause may also be considered unreasonable if the venue
chosen is “seriously inconvenient” for the trial of the action.
• In 1912, the New York Arbitration Law was passed providing that
arbitration contracts shall be “valid, enforceable and irrevocable.”
• Hence, under US law, arbitration clauses are no longer considered as
contrary to the public policy of the forum.
• There is nothing inherently wrong, immoral or against natural justice
in arbitration agreements; on the contrary, the modern tendency of
the court is to look with favor upon such agreements.
• American courts: choice-of-law and choice-of-venue provisions do
not oust them of jurisdiction.
o Same view taken by Philippine courts.
Korea Technologies Co., Ltd. v. Lerma
KOGIES and PGSMC entered into a contract for the manufacture and
operation of LPG cylinders. PGSMC failed to pay under the terms of the
contract and sought to rescind the same. KOGIES invoked the arbitration
clause arguing that the contract cannot be unilaterally rescinded without first
referring the dispute for arbitration in Korea.
Page 67 of 107
HELD: The arbitration clause is valid. The Supreme Court has sanctioned the
validity of arbitration clauses in a catena of cases. In this case, the arbitration
clause has not been shown to be contrary to any law, or against morals, good
customs, public order or public policy. The RTC is not ousted of jurisdiction
because under the ADR law, it must still confirm the foreign arbitral award.
3. ADHESION CONTRACTS
• Adhesion contract – one not negotiated by the parties, having been
drafted by the dominant party and usually embodied in a
standardized form.
• Called a contract of adhesion because the only participation of the
other party is to sign it.
• Also known as a “take it or leave it” contract.
• Examples:
o Insurance contract
o Bill of lading
o Contract of sale of land from real estate firms
o Airline tickets
Pan Am World Airways v. Rapadas
Rapadas was boarding a Pan Am flight from Guam to Manila when he was
forced to check-in his Samsonite attaché case. It never arrived in Manila. He
filed for damages placing the value of the contents of the case at $42,403.90.
Pan Am averred that it could only be liable for $160, as the “Notice of
Baggage Liability Limitations” provides for a limit of $20/lb.
HELD: Rapadas is bound by the terms as printed on the ticket. The Warsaw
Convention applies. Contracts of adhesion are not entirely prohibited, as one
who adheres to a contract is free to reject it entirely. However, since Rapadas
was compelled to check-in his bag against his will, it should be considered as
unchecked baggage, liability for loss of which is limited by the Warsaw
Convention to $400.
Philippine Airlines v. Court of Appeals
Mejia shipped a microwave from San Francisco to Manila. When it arrived, the
front glass door was broken. She filed suit against PAL. The trial court
awarded actual and moral damages.
HELD: The air waybill, despite being a contract of adhesion, is valid. However,
the Warsaw Convention does not operate as an exclusive enumeration of the
Ish Guidote
instances when a carrier shall be held liable for breach of contract or as an
absolute limit of the extent of liability. It does not preclude the application of
the Civil Code or other pertinent laws. Here, PAL was so grossly negligent that
it amounted to bad faith. The award of moral damages was therefore proper.
• Fricke v. Isbrandtsen Co.:
o A steamship ticket written in English which called for the
application of US law was issued in Germany to a German
plaintiff.
o The Court ruled that the provision cannot be enforced unless
the party urging enforcement proved the other literate in the
language of the contract with knowledge of what was
intended.
• Where there is an undue advantage made by a dominant party,
usually in a huge corporation or business monopoly, the principle of
contracting party autonomy does not apply.
o Court may invoke public interest/public policy.
o Ambiguity to be resolved in favor of the party impugning it.
• Saludo v. Court of Appeals:
o Even if the contract is one of adhesion and must be construed
strictly against the party who drafted it, it will be struck down
as void and unenforceable only where the weaker party is
imposed upon in dealing with the dominant bargaining party
and is reduced to the alternative of taking it or leaving it,
completely deprived of the opportunity to bargain on equal
footing.
• Sweet Lines v. Teves:
o It is hardly just and proper to expect the passengers to
examine their tickets received from crowded/congested
counters, more often than not during rush hours, for
conditions that may be printed much charge them with
having consented to the conditions, so printed, especially if
there are a number of such conditions in fine print, as in this
case.
o Again, it should be noted that Condition No. 14 was prepared
solely at the instance of the petitioner, respondents had no
say in its preparation.
! They could not examine the same before buying the
tickets.
! Unlike in insurance contracts, where the would-be
insured is given full opportunity to examine and
consider the fine print.
Page 68 of 107
 o It should also be stressed that slapping companies are o Oct. 12, 1929
franchise holders of certificates of public convenience and o For the regulation and establishment of uniform rules and
therefore, posses a virtual monopoly over the business of regulations on the liability of international airline carriers in
transporting passengers between the ports covered by their case of death, injuries of passengers or loss/damage of
franchise. cargo.
! Since they have a virtual monopoly, the passengers o Amendments:
are often left without a choice. ! Hague Convention
o Finally, judicial notice may be taken of the fact that the bulk of ! Guadalajara
those who board these inter-island vested come from the ! Montreal Agreement
low-income groups and are less literate, and who have little ! Guatemala Protocol
or no choice but to avail of petitioner's vessels. ! Montreal Protocol
o Philippines became a party to the Convention on Feb. 7, 1951.
4. SPECIAL CONTRACTS o Applies to all international transportation of persons,
• There are special types of contracts with special characteristics baggage or goods performed by aircraft for hire.
which are governed by specific rules. o Enumerates the instances where the carrier is liable, fixing
o Sales – lex situs the maximum amount of damages.
o Simple loan – law of the permanent place of business of the ! By special contract, parties may agree to greater
financial institution liability.
o Loan by private individual – law of the place where the loan ! Negligence of the passenger may relieve the carrier
was obtained. from liability.
o Pledge/mortgage/antichresis – lex situs o Carrier liable for death/injury of a passenger if the accident
took place:
Carriage of Goods by Sea ! On the aircraft;
! While embarking or disembarking.
American President Lines, Ltd. v. Klepper o Carrier liable for loss/damage to checked in luggage, if the
damage took place during the transportation by air.
Klepper sued APL for damages after its shipment arrived in bad order. The ! Period of responsibility includes the time during
trial court ordered petitioner to pay for the total value of the goods damaged + which the baggage/goods are in the charge of the
sentimental value. It now claims that its liability cannot exceed $500 under carrier.
the COGSA. o Liability for death/injury = $75,000.
! Limits do not apply where the carrier’s
HELD: The COGSA is not controlling in this case. NCC1735 provides that the employee/agents acted recklessly or with intent to
law of the country to which the goods are to be transported shall govern the cause damage, or with knowledge that damage would
liability of the common carrier. Hence, the Civil Code applies. However, probably result.
Klepper, having accepted the bill of lading, is bound by the terms thereof. o Liability for lost/damaged luggage:
Among such terms is a stipulation limiting the carrier’s liability to $500. ! $20/kg. for checked luggage;
! $400 for unchecked luggage.
Contracts for International Transportation o Passenger ticket is prima facie evidence of the contract of
• Claims for damages arising from contracts of international air carriage.
transportation – a comparatively new subject in Conflict of Laws. o Checked baggage is prima facie evidence of the registration
• Warsaw Convention (Convention for the Unification of Certain Rules of the luggage and the condition thereof.
Relating to International Transportation by Air) o Venue:
! Domicile of the carrier
Ish Guidote Page 69 of 107
 ! Principal place of business of the carrier
! Place of business of the carrier through which the
contract was made
! Place of destination
o Procedural rules of the forum court apply.
o Prescription: 2 years from—
! Date of arrival at destination
! Date on which the aircraft ought to have arrived
! Date on which the transportation stopped
o In case of several carriers:
! Each of the successive carriers is bound by the rules
set in the Convention, deemed to be a contracting
party only insofar as said carrier deals with the part
of transportation which it performed.
! Passenger can take action only against the carrier
who performed the transportation during which the
accident/delay occurred.
• Exception: if first carrier assumed liability for
whole journey.
! FOR GOODS:
• Consignor has right of action against first
carrier.
• Consignee has right of action against last
carrier.
• Both can take action against the carrier who
performed the transportation during which
the loss, damage or delay took place.
• Jointly and severally liable.
• Most SC decisions involved malice, bad faith and discriminatory acts.
Thus, the Court refused to apply the Warsaw Convention.
Lopez v. Pan Am World Airways
The Lopezes held first class tickets to San Francisco. However, Pan Am
refused to let them board as they allegedly had no reservations in first class
but only in economy. When Sen. Lopez arrived back in Manila, he filed a
complaint for damages against Pan Am. Pan Am raises the defense of good
faith.
HELD: Pan Am is liable for damages. It acted in bad faith by representing to
the Lopezes that their first class tickets were confirmed when in reality, their
bookings were cancelled. To make matters worse, it intentionally withheld
Ish Guidote
from plaintiffs the fact of said cancellation. In this case, Pan Am’s employees
exhibited gross negligence amounting to bad faith. Thus, the award of moral
damages is proper.
KLM Royal Dutch Airlines v. Court of Appeals
The Mendozas bought tickets to Europe from KLM. The Barcelona-Lourdes
leg was to be serviced by Aer Lingus. However, only the daughter and niece
were allowed to board. Plaintiffs were constrained to take the train to Lourdes
instead. Upon their return to Manila, they filed for damages against KLM. KLM
disclaims liability invoking Art. 30 of the Warsaw Convention. It claims that
since it was Aer Lingus which performed that part of the transportation, such
airline should be held liable.
HELD: Art. 30 is inapplicable. The tickets issued to the Mendozas provide that
the carriage is to be regarded as a single operation. They dealt only with KLM.
Since KLM knew that respondents would be flown by various carriers, it was
the former’s liability to inform the latter of the conditions prescribed in the
tickets, or at the very least, ascertain that they read the conditions. KLM did
not exert any effort to discharge this responsibility.
• Sabena Belgian World Airlines v. Court of Appeals:
o Lower court applied “usual rules” on recovering damages
beyond Warsaw limitations.
o Common carrier held liable for all damages which can be
reasonably attributed, although unforeseen, to the non-
performance of the obligation, including moral and exemplary
damages.
• Northwest Airlines v. Court of Appeals:
o Remanded to trial court for reception of evidence.
o In moving for summary judgment, Northwest admitted that its
liability was limited to the maximum allowed in Art. 22(2) of
the Convention.
o However, it should be allowed to prove that it was liable ONLY
to the maximum amount.
o The Convention does not regulate or exclude liability for other
breaches of contract or misconduct of officers or employees.
• Another issue arising from the Convention is the character of Art. 28
(1). The Court ruled that it is a matter of jurisdiction.
Page 70 of 107
 Santos III v. Northwest Orient Airlines
Santos purchased a round-trip ticket SFO-MNL-SFO. When he checked in, he
was informed that he had no reservation. He was placed on the waitlist.
Santos sued Northwest for damages. Northwest moved to dismiss for lack of
jurisdiction citing Art. 28 (1) of the Warsaw convention. The trial court
dismissed the case.
HELD: Art. 28 (1) is not merely a rule of venue but a rule of jurisdiction. Art. 32,
which indicates the places where the action for damages “must” be brought,
underscores its mandatory nature. The characterization is also consistent
with the object of the Warsaw Convention to “regulate in a uniform manner
the conditions of international transportation by air.” Finally, the Convention
does not contain any other provision prescribing rules of jurisdiction.
Manila is not the place of destination. It is merely an agreed stopping place.
Neither is it the carrier’s domicile, its principal place of business, or a place of
business through which the contract was made. Hence, the RTC did not have
jurisdiction.
Philippine Airlines v. Hon. Savillo
Griño and his companions bought tickets to Jakarta to join a golf tournament.
The Singapore-Jakarta leg was to be serviced by Singapore Airlines. They
were not allowed to board the flight. Griño was forced to buy a ticket from
Garuda instead. He fell ill and was not able to participate in the golf
tournament. When he returned to Manila, he filed a complaint for damages
against PAL. PAL filed an MTD alleging prescription under the Warsaw
Convention (two years).
HELD: Griño’s claims are not governed solely by the Warsaw Convention; the
Civil Code applies. Griño prayed for moral damages arising from PAL’s gross
negligence. Following NCC1146, the prescriptive period is four years.
Lhuillier v. British Airways
Lhuillier filed a suit for damages against British Airways. She alleged that she
was rudely treated by the flight attendants during a flight from the UK to
Rome. The RTC dismissed the complaint for lack of jurisdiction.
HELD: The RTC has no jurisdiction. Tortious conduct as ground for the
petitioner’s complaint is within the purview of the Warsaw Convention. Under
Ish Guidote
the Convention, the action may be brought either in the UK or Rome. British
Airways is domiciled in the UK. The ticket was purchased in Rome, and the
final destination was Rome. The case of Santos is squarely applicable.
EAP: Compare this case with PAL v. CA. In this case, the Court made no
determination that there was willful misconduct amounting to bad faith.
F. THE APPLICABLE LAW IN THE ABSENCE OF AN EFFECTIVE CHOICE
• Restatement 2d: In the absence of an effective choice of law by the
parties, consideration will be given to the following factors to
determine the state with which the contract has its most significant
relationship:
o (a) the place of contracting,
o (b) the place of negotiating of the contract,
o (c) the place of performance,
o (d) the situs of the subject matter of the contract,
o (e) the domicile, residence, nationality, place of incorporation
and place of business of the parties, and
o (f) the place under whose local law the contract will be most
effective.
• If (a), (b) and (c) are the same, the local law of that state ordinarily
determines the validity of the contract.
o Exception: usury
• The Restatement directs the forum court to single out the state of the
most significant relationship with the contract:
o As a whole; or
o With a specific issue arising therefrom.
• Court localizes the contract by examining factual contacts with the
concerned state.
o Example: deterioration of goods in transit – place of
destination
• If the place of making and performance are the same, it is presumed
that it is that state which is most significantly related to the contract.
• Where there are significant contacts with a transaction, the court will
apply its own law following a policy-centered approach.
o The court should also consider the legitimate expectation of
the parties.
G. LIMITATIONS TO CHOICE OF LAW
• Generally, parties may not select a law to govern their contract if said
law has no connection at all with the transaction or the parties.
• If the law selected changes, the law as changed should govern.
Page 71 of 107
 o Exception: if the change is so revolutionary that it was never
contemplated by the parties.
o In such a case, the governing law is that originally intended.
• Parties may select the law to govern the contract but such selection
cannot oust the court of jurisdiction over the parties and subject
matter previously acquired.
• Manila Resources Development Corporation v. NLRC:
o Ruben Manahan was hired to work as a mechanical engineer
in Riyadh.
o Upon arrival, it was discovered that his qualifications did not
meet the requirements of the job.
o Salary reduced from USD1k to USD360.
o He was repatriated.
o HELD: Philippine laws cannot be rendered illusory by the
parties agreeing on some other law to govern their
relationship.
! 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 governing principle is that parties may not
contract away applicable provisions of law especially
peremptory provisions heavily impressed with public
interest.
• Use of cognovit clauses
o Cognovit clause – debtor may agree to be subject to the
jurisdiction of a specific court/s in case he breaches the
contract or defaults in payment.
o Cognovit note waives debtor’s right to receive notice,
authorizes entry of judgment against him.
o Also known as confession-of-judgment clause.
! Valid only if the parties were of equal bargaining
power and the debtor agreed to it voluntarily.
Chapter XV
CHOICE OF LAW IN WILLS, SUCCESSION AND ADMINISTRATION OF ESTATES
Article 783, Civil Code. A will is an act whereby a person is permitted, with the
formalities prescribed by law, to control to a certain degree the disposition of
this estate, to take effect after his death. (667a)
Ish Guidote
• Osorio v. Posadas: A will is a disposition made:
o By a competent testator,
o In the form prescribed by law,
o Of property over which he has legal power of disposition.
• From a conflicts perspective, a will is an involuntary transfer of
property.
o Execution of a will is a voluntary act but that in itself does not
transfer title.
o Will comes into effect upon the death of the testator, and it is
only then that transfer of title is effected.
o Governing law:
! Domiciliary law (for common law countries)
! National law (for civil law countries)
EAP: Two kinds of succession—
• Universal – governed by the personal law of the decedent regardless
of whether the property is movable or immovable.
• Split – as to movables, lex domicilii, but as to immovables, lex situs.
A. EXTRINSIC VALIDITY OF WILLS
• Filipino executes will abroad:
o Lex loci celebrationis – pursuant to NCC815, which follows
the rule in NCC17:
When a Filipino is in a foreign country, he is authorized to
make a will in any of the forms established by the law of the
country in which he may be. Such will may be probated in the
Philippines. (n)
o Lex nationalii – no specific provision in the Civil Code.
! Tolentino: If an alien is allowed to execute a will in a
foreign country following Philippine law on
formalities, with more reason should the Filipino be
allowed to do so.
! Law did not intend to put the Filipino in a worse
position than the alien in relation to Philippine law.
! Code should have expressly stated this considering
the rule in NCC17.
Page 72 of 107
 In Re Estate of Johnson, supra
Johnson was a US citizen. He died in Manila leaving a holographic will which
was signed by only two witnesses instead of three as required by the Code of
Civil Procedure. The will was admitted to probate as it was found to have
complied with Illinois law, the decedent being a citizen of that state. His
daughter seeks to annul probate of the will.
HELD: The will was correctly admitted to probate. The Code of Civil Procedure
provides that if a will is executed in accordance with the national law of the
testator, and was probated and allowed there, it may be proved, allowed and
recorded in the Philippines. However, the trial court erred in taking judicial
notice of the Illinois statute because only an annotation was presented in
court. This notwithstanding, the decision can no longer be disturbed as it has
not been alleged that the Illinois law is different from what the court found.
Extrinsic Validity of Joint Wills
Article 818, Civil Code. Two or more persons cannot make a will jointly, or in
the same instrument, either for their reciprocal benefit or for the benefit of a
third person. (669)
• Joint wills executed by Filipinos anywhere (even if the foreign country
allows it) are VOID on grounds of public policy.
• Dacanay v. Florendo: Joint wills are prohibited because—
o A will is a purely personal and unilateral and this is defeated if
two or more persons make their will in the same instrument;
o It is contrary to the revocable character of a will;
o A joint will may expose a testator to undue influence and may
even tempt one of the testators to kill the other.
• Purpose of NCC818 is to prevent overreaching especially between the
husband and wife.
o The spouse who is more aggressive or dominant is liable to
dictate the terms of the will for his or her own benefit or for
that of third persons whom he or she desires to favor.
o Reciprocal wills – one spouse may be tempted to kill of or
dispose of the other.
• If a joint will is admitted to probate upon the death of the husband,
the decree of probate affects only the estate of the husband.
o Wife would then die intestate.
• NCC says nothing about a joint will executed in the Philippines by
aliens whose national laws do not prohibit it.
Ish Guidote
o In accordance with NCC819, the will should not be probated if
it affects heirs in the Philippines.
Extrinsic Validity of Holographic Wills
Article 816. The will of an alien who is abroad produces effect in the
Philippines if made with the formalities prescribed by the law of the place in
which he resides, or according to the formalities observed in his country, or in
conformity with those which this Code prescribes. (n)
Article 817. A will made in the Philippines by a citizen or subject of another
country, which is executed in accordance with the law of the country of which
he is a citizen or subject, and which might be proved and allowed by the law
of his own country, shall have the same effect as if executed according to the
laws of the Philippines. (n)
• These provisions are applicable to holographic wills.
• A holographic will is defined in NCC810:
A person may execute a holographic will which must be entirely
written, dated, and signed by the hand of the testator himself. It is
subject to no other form, and may be made in or out of the
Philippines, and need not be witnessed. (678, 688a)
• A holographic will is also known as an autographic will.
o Introduced by the NCC to facilitate the secret expression of
the desire by the testator.
o Simplest and most convenient method for making a last
testament.
o JBL Reyes: the simplicity of holographic wills is an invitation
to forgery.
Babcock Templeton v. Rider Babcock
Babcock Templeton filed a petition for the probate of an alleged holographic
will executed by Jennie Rider Babcock. Since the will was not executed in
compliance with the Code of Civil Procedure, it was alleged that California
law, as the testatrix’s domiciliary law, should govern its extrinsic validity. The
trial court admitted the will to probate.
HELD: California law applies. The trial court correctly found that the testatrix
was a domiciliary of California. It was shown that she abandoned the same
Page 73 of 107
and subsequently acquired a new domicile. While she resided in the
Philippines before her death, she had no intention staying here permanently.
Her repeated declarations show her intent to return ultimately to the US.
B. INTRINSIC VALIDITY OF WILLS
• Governed by the national law of the decedent. NCC16 provides:
xxx
However, intestate and testamentary successions, both with respect
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is
under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found. (10a)
• Miciano v. Brimo:
o Re: the following condition in the testator’s will—
Second. I likewise desire to state that although, by law, I am a
Turkish citizen, this citizenship having been conferred upon
me by conquest and not by free choice, nor by nationality and,
on the other hand, having resided for a considerable length of
time in. the Philippine Islands where I succeeded in acquiring
all of the property that I now possess, it is my wish that the
distribution of my property and everything in connection with
this, my will, be made and disposed of in accordance with the
laws in force in the Philippine Islands, requesting all of my
relatives to respect this wish, otherwise, I annul and cancel
beforehand whatever disposition found in this will favorable to
the person or persons who fail to comply with this request.
o The condition is void for being violative of Art. 10, OCC.
o Assuming said condition was legal and valid, any legatee who
fails to comply with it, as the herein oppositor who, by his
attitude in these proceedings has not respected the will of the
testator, as expressed, is prevented from receiving his legacy.
o Said condition is considered unwritten, and the institution of
legatees in said will is unconditional and consequently valid
and effective even as to the oppositor.
• Criticism:
Ish Guidote
o The Court, in applying the doctrine of processual
presumption, disregarded the clear intention of the testator.
o It is submitted that the Court should have used a policy-
centered approach in addressing the issue instead of the
mechanical application of lex nationalii.
o Using the most significant relationship approach, Philippine
law would have applied:
! Decedent was a resident of the PH.
! He executed his will here.
! He desired PH law to govern.
! The properties subject of the will were located in the
PH.
o In the alternative, the Court could have used “disingenuous
characterization”:
! Issue characterized as one of property instead of
succession.
! Thus, lex rei sitae would apply.
Cayetano v. Leonidas
Adoracion Campos died leaving her father Hermogenes and siblings as her
heirs. Hermogenes, believing himself to be the only compulsory heir, executed
an affidavit of self-adjudication. Adoracion’s sister, Nenita, later filed a
petition for reprobate of a will allegedly executed by the deceased in the US.
At the time of her death, Adoracion was allegedly a Pennsylvania citizen.
Hermogenes opposed claiming that he would be deprived of his legitime as
the testatrix’s forced heir. The trial court admitted the will to probate, as the
law of Pennsylvania does not provide for legitimes.
HELD: Hermogenes is not entitled to receive anything by way of legitime. Art.
16, par. 2 of the Civil Code provides that the intrinsic validity of a will shall be
governed by the decedent’s national law. The testatrix being a national of
Pennsylvania, the laws of that state apply. Under such laws, she was free to
dispose of her entire estate by will.
C. INTERPRETATION OF WILLS
• Pursuant to the nationality principle embodied in the Civil Code, the
interpretation of a will must be governed by the rules of interpretation
of the decedent’s national law.
• Where the terms are clear and unambiguous, the lex intentionis
should be followed.
• If there is ambiguity, refer to:
Page 74 of 107
 o The context of the instrument itself; or
o The testator’s contemporaneous and subsequent acts in
keeping with the nature and object of the document.
• Presumptions may be resorted to if the intentions of the testator
cannot be ascertained.
o First, the ambiguity should be resolved in keeping with the
laws and customs of that state most probably in the mind of
the testator when he used the words, and with which he is
presumed to be most familiar.
! If it is apparent that the testator had a specific state
law in mind, such will control the interpretation of the
will.
o Second, in case a will admits of different interpretations, the
interpretation by which the disposition is to be operative shall
be preferred (NCC788).
! Most favorable construction to accomplish the
purpose intended by the testator.
! Presumed that the testator intended a lawful thing.
D. REVOCATION
Article 828. A will may be revoked by the testator at any time before his death.
Any waiver or restriction of this right is void. (737a)
E. PROBATE
• According to NCC829, a revocation done outside the Philippines, by a
person who does not have his domicile in this country, is valid when it
is done according to:
o The law of the place where the will was made (lex loci
celebrationis); or
o The law of the place in which the testator had his domicile at
the time (lex domicilii).
• If a will is revoked abroad by a domiciliary of the Philippines, the
governing law is:
o Law of the domicile (Philippine law); or
o Law of the place of the revocation (lex loci actus).
• If the revocation takes place in the Philippines, it is valid when it is in
accordance with the provisions of the Civil Code.
• NCC 830 provides instances wherein a will is considered revoked,
thus:
No will shall be revoked except in the following cases:
Ish Guidote
(1) By implication of law; or
(2) By some will, codicil, or other writing executed as provided in case
of wills; or
(3) By burning, tearing, cancelling, or obliterating the will with the
intention of revoking it, by the testator himself, or by some other
person in his presence, and by his express direction. If burned, torn,
cancelled, or obliterated by some other person, without the express
direction of the testator, the will may still be established, and the
estate distributed in accordance therewith, if its contents, and due
execution, and the fact of its unauthorized destruction, cancellation,
or obliteration are established according to the Rules of Court. (n)
• Problem: Testator is domiciled in State A, revokes his will there. He
changes domicile to State B, where he dies. What if the revocation
was valid according to the laws of State A, but not of State B? Which
law applies?
o Common law jurisdictions: law of domicile at the time of the
testator’s death governs, revocation is invalid.
o Philippines: law of the place of revocation. Revocation valid.
(But what is the statutory basis for this?)
• Probate – an adjudication that the last will and testament of a person
was executed with all the formalities required by law.
• Generally, does not pass upon the intrinsic validity of the will.
• Probate is synonymous with authentication of a will.
• Since the disallowance of a will is procedural in character, the law of
the forum will govern procedural matters.
• But again, since probate is concerned with the extrinsic validity of a
will, the forum court will have to use lex loci celebrationis pursuant to
NCC17, 816 and 817.
• Grounds for disallowance are provided in Rule 76, §9 of the Rules of
Court:
Grounds for disallowing will. — The will shall be disallowed in any of
the following cases:
(a) If not executed and attested as required by law;
(b) If the testator was insane, or otherwise mentally incapable to
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 make a will, at the time of its execution;
(c) If it was executed under duress, or the influence of fear, or threats;
(d) If it was procured by undue and improper pressure and influence,
on the part of the beneficiary, or of some other person for his benefit;
(e) If the signature of the testator was procured by fraud or trick, and
he did not intend that the instrument should be his will at the time of
fixing his signature thereto.
• Wills executed in a foreign country may be probated in the PH upon a
showing of:
o Due execution in accordance with the lex loci celebrationis;
and
o Testamentary capacity at the time of execution of the will.
! Under NCC799, there is testamentary capacity where
“the testator was able at the time of making the will
to know the nature of the estate to be disposed of, the
proper objects of his bounty, and the character of the
testamentary act.”
• Philippine courts may order the allowance of wills already probated in
foreign countries, thus, Rule 77, §1 provides:
Will proved outside Philippines may be allowed here. — Wills proved
and allowed in a foreign country, according to the laws of such
country, may be allowed, filed, and recorded by the proper Court of
First Instance in the Philippines.
• §3 provides for the effect of allowance:
When will allowed, and effect thereof. — If it appears at the hearing
that the will should be allowed in the Philippines, the shall so allow it,
and a certificate of its allowance, signed by the judge, and attested by
the seal of the court, to which shall be attached a copy of the will,
shall be filed and recorded by the clerk, and the will shall have the
same effect as if originally proves and allowed in such court.
• In connection, NCC817 states:
A will made in the Philippines by a citizen or subject of another
country, which is executed in accordance with the law of the country
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of which he is a citizen or subject, and which might be proved and
allowed by the law of his own country, shall have the same effect as if
executed according to the laws of the Philippines. (n)
• Common law conflicts rule:
o If the will is allowed at the testator’s last domicile, it is valid
everywhere with respect to movable property.
! This is because with respect to movable property, lex
domicilii governs.
o However, with respect to real property, the probate of the will
in the testator’s last domicile does not affect the conveyance
of land which is governed by lex situs.
Suntay v. Suntay, supra
Suntay was a Filipino who died in China. He allegedly executed a will in China
in 1931. His son, Federico, filed a petition for probate of the will, which had
allegedly been filed, recorded and probated before the District Court of Amoy,
China. The petition was denied by the trial court.
HELD: The will cannot be admitted to probate. The following must be proven
as facts:
1. That the Amoy district court is a probate court;
2. The procedural law of China on the probate/allowance of wills; and
3. The legal requirements for the execution of a valid will in China in
1931.
Federico merely presented an Order issued by the court which consisted of a
statement that the parties underwent depositions. Since there was no proof
of Chinese law presented, the doctrine of processual presumption applies.
Philippine law requires notice to all interested parties. There is no showing
that such parties were notified.
Vda. De Perez v. Tolete
The Sps. Perez were Filipinos who later became US citizens. The husband
executed a will bequeathing his entire to estate, with a proviso that should
she predecease him, his estate will go to his children and grandchildren, with
his brother Rafael as trustee. The wife similarly executed a will of her own.
The spouses perished in a fire, thus, Rafael filed a petition for probate of the
wills before a New York court. He was appointed administrator. In Bulacan,
Mrs. Perez’s mother filed a petition for reprobate of the wills. The trial court
denied reprobate because the will was only signed by two witnesses.
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HELD: Mrs. Perez’s mother should be given an opportunity to prove New York
law. Proof of foreign law is required because our courts cannot take judicial
notice of such laws. Moreover, the wills should be jointly probated. What the
Civil Code prohibits are joint wills, whereas here there were two distinct wills.
The Rules should be liberally construed in order to promote their object and to
assist the parties in obtaining just, speedy and inexpensive determination of
every action and proceeding.
F. ADMINISTRATION OF ESTATES
• Duties:
o Manage and settle decedent’s debts;
o Distribute the residuum of the estate to the deceased’s heirs.
• Probate court has the duty, upon allowance of the will, to issue letters
testamentary to the person named in the will upon the latter’s
application.
• Where there is no will, the court may appoint an administrator.
• Title vested in the administrator results from law.
o PRIMARY PURPOSE: Protection of creditors
o INCIDENTAL PURPOSE: Distribution of the estate to the next
of kin.
• Title of a domiciliary administrator has no extraterritorial force.
• Ancillary administrator – appointed by the court of the foreign
country where the assets or property are located.
Tayag v. Benguet Consolidated Mining Company, Inc.
Perkins died leaving two stock certificates covering some 30,000 shares in
the Benguet Consolidated Mining Company (BCMC). The New York probate
court appointed the County Trust Company of New York (CTC) as domiciliary
administrator. CTC had possession of the stock certificates. Meanwhile,
Sanidad instituted ancillary proceedings before the CFI. Tayag was appointed
ancillary administrator. CTC refused to surrended the BCMC stock certificates
to him. Tayag then petitioned the court to declare the stock certificates lost.
The trial court granted his petition.
HELD: Tayag, as ancillary administrator, is entitled to possession of the stock
certificates. When a person dies and he leaves properties in his domicile as
well as in a foreign country, administration proceedings are instituted in both
countries. Principal administration takes place in the decedent’s domicile,
while any other administration is termed the ancillary administration. Since
BCMC is a domestic corporation, the actual situs of the shares of stock is in
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the Philippines, hence, it is the ancillary administrator who is entitled to
possess the same.
G. TRUSTS
• Trust – a right of property, real or personal, held by one party for the
benefit of another.
o Deed – during the lifetime of the trustor.
o Will
• Conflicts issues arise when:
o They involve interests or properties in a place other the
decedent’s domicile;
o Questions as to the validity of the propriety of the trust arise;
or
o There is an issue as to compliance with formalities.
• Governing law:
o If there is a choice-of-law clause: law chosen by the creator
of the trust.
o If there is none, the law that will sustain the validity of the
trust. May be:
! Law of the state where the trust is being
administered; or
! Law of the state where the trustor was domiciled.
o In the case of testamentary trusts, the controlling law as to
capacity and extrinsic validity is the same as that of the will
which created them.
! Characterized as an issue of property, thus, as to
intrinsic validity, lex situs applies.
Chapter XVI
CHOICE OF LAW IN TORTS AND CRIMES
• “Tort” is derived from the French word torquere or “to twist.”
• It is an act or omission producing injury to another without any
previous existing lawful relation of which the act or omission may be
said to be a natural outgrowth or incident.
• Anglo-American law/jurisprudence: Tort includes malice and willful
intent.
• Spanish concept of quasi delict excludes obligations arising from
contract.
• NCC provisions:
Article 20. Every person who, contrary to law, willfully or negligently
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 causes damage to another, shall indemnify the latter for the same.
Article 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed
by the provisions of this Chapter. (1902a)
A. POLICIES BEHIND CONFLICTS TORT LAW
• Policies underlying substantive tort law:
o To deter socially undesirable or wrongful conduct; and
o To rectify the consequences of the tortious act by distributing
the losses that result from accident and products liability.
• Thus, the policy behind tort law will most likely be a strongly held
policy of the state.
o As a result, courts will be less inclined to displace forum law
with foreign law.
• Considerations in determining the applicable law in conflicts torts
cases:
o Needs of interstate and international systems including the
policies of:
! Upholding the justified expectation of parties; and
! Minimizing the adverse consequences that might
follow from subjecting a party to the law of more than
one state.
o Discouraging forum shopping
o Achieving decisional harmony
• Ordinarily, parties to a tort case could not have had a specific state
law in mind, since accidents are fortuitous.
o Nonetheless, they may have anticipated the possibility of
liability and insured against it.
• In the same vein, corporations may expect that the laws of the state
where it has continuous and systematic business activities will be
applicable.
o But it cannot comply with various laws without
reincorporating in each state.
• In such cases, the courts should lessen the adverse effects of
applying the laws of several states on the parties.
• When will a conflicts tort problem arise?
o Place where tortious conduct and resulting injury occurred
are different.
o One state imposes higher standards than the other.
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o Difference in product liability laws.
o Varying judicial interpretations in the extent of liability.
• Interstate accidents:
o Concerned states are those where:
! The victims and tortfeasor reside; or
! The enterprise has business activity.
o It is in these states that the effects of granting/denying
damages will be greatly felt.
• Other states which may be considered concerned states on the
grounds of strongly held state policies:
o State where the liability creating conduct occurred; or
o State where the injury occurred.
B. LEX LOCI DELICTI COMMISSI
• The law of the place where the alleged tort was committed
determines tort liability in matters affecting conduct and safety.
o Traffic rules and speed limits further state policies of
deterring socially unproductive conduct.
• The locus delicti is not easily determined where the liability producing
conduct occurs in one state but the injuries are sustained in another.
• Common law: where the last event necessary to make an actor liable
for an alleged tort occurs.
o Adheres to the vested rights theory.
o If there is no harm, then there is no tort.
o Negligence in itself is not actionable unless there is injury.
• Civil law: where the tortious conduct was committed.
o Legality or illegality of a person’s act should be determined by
the law of the state where he is at the time he does such act.
o If he falls short of the standard of conduct prescribed, he is
liable for any injury caused even if it takes place in another
state.
• Whether the situs of the tort is the place of conduct or the place of
injury, the traditional view is that an actor liable by the lex loci delicti
is liable everywhere, in accordance with the vested rights theory.
o Lex loci delicti will not be enforced in the forum where it
violates state policy.
o However, absence of a similar law in the forum imposing
liability does not preclude the grant of relief under a foreign
tort claim.
• Alabama Great Southern Railroad v. Carroll:
o Negligent act – failure to inspect the links – occurred in
Alabama.
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 o Injury – occurred in Mississippi.
o Since under Mississippi law, no recovery could be had, it
follows that the plaintiff had no rights which could be
enforced by the Alabama courts.
Loucks v. Standard Oil Company
Loucks was a domiciliary of New York who was killed in a car accident in
Massachusetts, purportedly due to the negligence of Standard Oil’s
employees. His widow and children filed suit for damages before a New York
court. Massachusetts law grants a right of action against the employer for the
negligence of its agents or servants. New York law does not provide for
similar liability.
HELD: The right of action under Massachusetts law may be enforced in a New
York court. A foreign statute is not law in this state, but it gives rise to an
obligation which, if transitory, follows the person and may be enforced
wherever the person may be found. While NY law does not provide for similar
liability, the Massachusetts law has not been found to be contrary to any
public policy of the state. The fundamental public policy is perceived to be
that rights lawfully vested shall be everywhere maintained. Only exceptional
circumstances should lead one of the states to refuse a right acquired in
another.
• The application of lex loci commissi leads to uniformity of results.
• Prof. Weintraub’s criticism: If the object of conflicts law is to achieve
uniformity of results, then there must be uniformity of rules in each
possible forum.
o Unreasoned application of the lexi loci delicti commissi to
achieve uniformity of results independent of fairness to the
parties frustrates the ends of justice.
C. MODERN THEORIES ON FOREIGN TORT LIABILITY
1. THE MOST SIGNIFICANT RELATIONSHIP
• Considers the state’s contacts with the:
o Occurrence
o Parties
• Contacts to be considered:
o Where the tortious conduct occurred
o Where the injuries were sustained
o Domicile, residence or nationality of the victim and tortfeasor
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o Place where the relationship of the parties are centered.
• Two-fold purpose of determining contacts:
o To identify the interested state; and
o To evaluate the relevance of these contacts to the issue in
question.
• Strength is not drawn in numbers. Rather, the court localizes the state
of the most significant relation.
o It then assesses the event or transaction in light of the
relevant policy considerations of the interested states and
their underlying policies.
• Babcock v. Jackson:
o NY contacts were more significant than Ontario contacts.
! Only connection with Ontario was that the accident
occurred there.
o Guest-host relationship was formed in NY, trip commenced
and was to terminate there.
Saudi Arabian Airlines v. Court of Appeals
Morada, a flight attendant of SAUDIA, went to a disco with her fellow
attendants, Thamer and Allah, while on a stopover in Jakarta. One of her
companions, Thamer, attempted to rape her. Both men were arrested but
were subsequently released upon intervention of the Saudi government. When
Morada flew to Saudi, her passport was confiscated and was released only
after she agreed to drop the case against Thamer and Allah. When she was
about to depart from Riyadh, she was apprehended and taken to a court. To
Morada’s surprise, she was convicted of violation of Islamic law. She filed a
complaint against SAUDIA under Arts. 19 and 21 of the Civil Code.
HELD: Philippine law applies. This dispute should be characterized as one of
tort. Morada alleged that SAUDIA misrepresented to her that she was being
taken to Jeddah only to testify against Thamer and Allah, when in truth she
was the one made to face trial for very serious charges. Following the
traditional approach, the applicable law is Philippine law since it is the lex loci
delicti commissi. The acts alleged to have been violative of the Civil Code
took place in the Philippines. Even under the modern approach (most
significant relationship), Philippine law would still govern. Morada is a
Filipina, working with SAUDIA, a resident foreign corporation.
2. INTEREST ANALYSIS
• Considers the relevant concerns that the state may have in the case
and its interest in having its law applied on that issue.
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 • First step: determine if there is a false or true conflict.
o False conflict – if only one state has an interest in having its
law applied and failure to apply the other state’s law would
not impair the policy reflected in that law.
o True conflict – where both states have an apparent interest in
applying their respective laws to the case.
! Check if the interests are substantial.
• Babcock presented a false conflict.
o Canada had no interest in applying its guest statute to the
case because the policy behind the law was to protect hosts
from suits by ungrateful guests or insurance companies from
collusive suits.
! The parties to the case were both non-domiciliaries.
! The insurance was registered in NY.
o Application of NY law will advance state policies without
impairing the policy of Canada.
3. CAVER’S PRINCIPLE OF PREFERENCE
• Third principle in torts deals with rules that sanction some kind of
conduct engaged in by a defendant in one state and extends the
benefit of this higher standard of conduct and financial protection to
the plaintiff even if the state of injury does not create analogous
liabilities.
Schmidt v. Driscoll Hotel
In Wisconsin, Driscoll Hotel sold liquor to Sorrensen resulting in the latter’s
intoxication. Despite this, he drove an automobile which turned over resulting
in injury to Schmidt, his passenger. This accident occurred in Wisconsin.
Schmidt sued Driscoll Hotel in Minnesota. The trial court dismissed the
complaint on the ground that the Minnesota Civil Damage Act permits
recovery only when the illegal sale of liquor is followed by an injury in the
state. On the other hand, the lexi loci delicti commissi does not have a civil
damage act.
HELD: Schmidt can still recover. Under the Restatement, the law of the place
of the wrong governs. But if this were to be applied in the case at bar, Schmidt
would be without a remedy against Driscoll Hotel. In conformity with the
principles of equity and justice, it is Minnesota law which should apply—all
the parties were residents of Minnesota, and Driscoll Hotel was licensed to
operate under Minnesota law. The illegal sale took place in Minnesota.
Wrongful conduct was complete in this state when, as a result thereof,
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Sorrenson became intoxicated.
• Schmidt illustrates the imposition of liability under a substantive rule
of tort law that has a strong underlying admonitory policy.
American Contributions to Conflicts Tort Law
• Law of the tort – applicable to matters involving regulation of
conduct.
• Domiciliary law of the parties – governs in matters relating to loss
distribution or financial protection.
• Applying these principles, Babcock would be decided on the basis of
the parties’ domiciliary law, which is New York law.
o Award of damages centered around the parties’ domicile.
o A state’s loss distribution policy benefits its domiciliaries
even when they act outside the state borders.
D. FOREIGN TORT CLAIMS
• Tortious liability is transitory—it is deemed personal to the tortfeasor
and follows him wherever he goes.
o Compensation may be exacted from him in any tribunal which
can obtain jurisdiction over his person.
o Enforcement of claim not limited to the place where the cause
of action arises.
• Thus, an action for tort may be brought wherever the tortfeasor is
subject to suit.
1. CONDITIONS FOR THE ENFORCEMENT OF TORT CLAIMS
• Requisites:
1. The foreign tort is based on a civil action and not on a crime;
2. The foreign tort is not contrary to the public policy of the
forum; and
3. The judicial machinery of the forum is adequate to satisfy the
claim.
• As opposed to contracts, the defendant in a transnational tort is
usually sued before a foreign court against his will.
o Questions often arise as to jurisdiction, especially in issues
involving products liability.
2. PRODUCTS LIABILITY OF THE FOREIGN MANUFACTURER
• State laws on basis and extent of liability for defectively
manufactured products vary significantly, giving rise to conflicts torts
cases.
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 o Possible bases:
! Negligence
! Strict liability
! Breach of warranty against hidden defects
• In a typical products liability case, the plaintiff purchases a fungible
or non-fungible product from an out-of-state manufacturer. If he
suffers injury after ingesting/using the product, he may bring an
action against the manufacturer in his home state.
o Forum court has real interest in applying its own law in order
to allow its injured domiciliary to recover damages.
! This principle was not followed in Asahi Metal
Industry.
Asahi Metal Industry Co. v. Superior Court of California
Asahi manufactured tire valve assemblies in Japan which it sold to Cheng
Shin, a Taiwanese company. Cheng Shin incorporated the valve assemblies
into tires that were sold in the US. An accident occurred in California wherein
a motorcycle driver lost control of his vehicle and collided with a tractor. The
driver filed a products liability action against both Asahi and Cheng Shin in
California. Asahi moved to dismiss for lack of jurisdiction.
HELD: The California court has no jurisdiction over Asahi. The test of whether
an exercise of personal jurisdiction comports with due process is whether the
defendant purposely established minimum contacts in the forum state. The
placement of a product in the stream of commerce, without more, is not an
act of the defendant purposely directed toward the forum state. Here,
respondents have not demonstrated that Asahi purposely availed itself of the
California market. It has no office, agents, employees or property in California,
neither does it advertise or solicit business in this state.
EAP: This case distinguished between stream of commerce and purposeful
availment. The latter is a higher standard, and must be met for purposes of
exercising jurisdiction over a non-resident.
• Societe Nationale Industrille Aerospatiale v. Lee Kui Jak: A helicopter
manufactured by Aerospatiale crashed in Brunei killing a Brunei
resident.
o Aerospatiale is a French company, owned by an English
company and operated by a Malaysian company.
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o The widow of the Brunei resident brought suit against the
Malaysian company before a Brunei court, and against
Aerospatiale and its affiliate in Texas.
o Jurisdiction in Texas was asserted on the basis of
Aerospatiale’s doing business there.
! Texas appeared to have more favorable laws on
products liability.
! Aerospatiale filed MTD, denied.
o Aerospatiale filed proceedings before a Brunei court to enjoin
plaintiff from continuing with the Texas case.
! Brunei was the natural forum for the trial.
! It would be oppressive for the plaintiffs to continue
with the TX proceedings as Aerospatiale would not be
able to pursue legal proceedings against the
Malaysian company.
• Bier v. Mines de Potasse d’ Alsac: A Dutch market gardener operating
nurseries using water from the Rhine river filed suit against a French
mining company before a Dutch court.
o He alleged that the French company had been dumping
chloride into the river causing pollution damage.
o Where did the harmful event occur, as required by the
Brussels Convention?
! Where the wrongful conduct occurred (France)
! Where the effects were felt (Netherlands)
o Dutch court originally declined to exercise jurisdiction.
o European Court held that the plaintiff could at its election, sue
at either place.
Sovereignty as Basis of Jurisdiction
• Jurisdiction
o An aspect of sovereignty.
o Refers to judicial, legislative and administrative competence.
• Exercise of civil jurisdiction over aliens presents the same problems
as in criminal cases.
• Common law: Tag jurisdiction
o Used to justify the exercise of personal jurisdiction over a
defendant present in the territory, however short.
o Pennoyer v. Neff: “Every state possesses exclusive
jurisdiction and sovereignty over persons and property within
its territory… No state can exercise direct jurisdiction and
authority over persons and property not within its territory.”
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 • Worldwide Volkswagen Corp. v. Woodson: US courts have jurisdiction
over a foreign corporation which introduces its products into the
stream of commerce with the expectation that they will be purchased
by consumers in the forum state.
Worldwide Volkswagen Corporation v. Charles Woodson
The Robinsons were residents of New York. They purchased a vehicle from
Seaway Volkswagen, a New York-based dealer. The spouses met a car
accident in Oklahoma purportedly due to the defective design and placement
of their car’s gas tank and fuel system. The Robinsons sued before an
Oklahoma court.
HELD: The Oklahoma court has no jurisdiction. Exercise of personal
jurisdiction over a non-resident may be justified only if there exist minimum
contacts between the defendant and the forum state. There is a total absence
of such contacts in this case. Petitioners carry on no activity whatsoever in
Oklahoma. The only connection with that state is that the accident occurred
there. This alone cannot justify the exercise of jurisdiction.
3. THE ALIEN TORT ACT
28 U.S.C. §1350. The district courts shall have original jurisdiction of any civil
action by an alien for a tort only, committed in violation of the law of nations
or a treaty of the United States.
• The Alien Tort Statute was enacted in 1789.
o Rationale: “compliance with the law of nations was a
fundamental concomitant of Nationhood… and the nation’s
obligation to comply with a particular legal duty was
supplemented by a moral duty.”
o Purposes:
! Stability of commercial relations and national
security.
! Recognition of the obligation of every state to the law
of nations as a means to avert war and chaos.
• Hilao v. Estate of Ferdinand Marcos: Victims of human rights abuses
during the Marcos administration filed suit for damages before the
District Court of Hawaii.
o US Court of Appeals upheld jurisdiction over a tort claim of an
alien against an official of his own government for torture
committed within that government’s internal jurisdiction.
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o Case recognized that tort liability is transitory.
o Other pertinent issues discussed in the case involved:
! Lex loci delicti commissi
! Statute of limitations
! Command responsibility
! Exhaustion of remedies
Hilao, et al. v. Estate of Ferdinand Marcos
A class suit for damages was filed against Ferdinand Marcos before the
District Court of Hawaii. The plaintiffs allegedly suffered torture,
“disappearance,” and summary execution during Marcos’ tenure as President.
The court ruled in favor of plaintiffs, awarding nearly $2 million in damages.
HELD: The district court had jurisdiction over the plaintiffs’ claims. There are
three requisites for the exercise of jurisdiction under the Alien Tort Statute:
1. A claim by an alien;
2. A tort; and
3. A violation of international law.
The ATS applies to conduct that occurred abroad in the absence of any
limitation as to the locus of the injury.
Filartiga v. Peña-Irala
The Filartigas were Paraguayan citizens who sought political asylum in the
US. There, they filed a suit for wrongful death against Peña-Irala, likewise a
citizen of Paraguay. Plaintiffs alleged that Peña-Irala caused the kidnapping
and torture of Filartiga’s son as retaliation for his political activities.
Summons was served on Peña-Irala in Brooklyn, where he was facing
deportation. The trial court dismissed the complaint for lack of jurisdiction
over the subject matter.
HELD: The US courts may exercise jurisdiction under the ATS. Common law
courts of general jurisdiction adjudicate transitory tort claims between
individuals over whom they exercise personal jurisdiction, wherever the tort
occurred. A state or nation has a legitimate interest in the orderly resolution
of disputes among those within its borders, and where the lex loci delicti
commissi is applied, it is an expression of comity to give effect to the laws of
the stat where the wrong occurred. In the case at bar, the acts complained of,
if proven, would constitute a violation of Paraguayan law.
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 • Trajano v. Marcos: Agapita Trajano sued Imee Marcos and Fabian Ver
for the wrongful death of her son Archimedes. District Court awarded
$4.4 million in damages.
o US DOJ filed an amicus brief with a narrowed interpretation of
the scope of the ATS.
! US jurisdiction over foreign tort actions limited to
those which the US might be held accountable to the
offended nation if it did not extend protection of its
laws.
• If accountability were to be made the basis of jurisdiction under the
ATS, it would present a significant setback to the advancement of
international law.
• Furthermore, it has been recognized that individuals are subjects of
PIL and are protected against abuses committed by their own
governments.
• In 1789, when the ATS was passed, the drafters of the Judiciary Act
could not have expected the provision to extend to a case like
Filartiga because they could not have imagined international law
extending so far.
o How could a tort committed by a citizen of a foreign country
on a fellow citizen within that country ever amount to a
violation of international law?
• In Guinto v. Marcos, the US District Court excluded free speech claims
from the coverage of the ATS.
Guinto v. Marcos
Plaintiffs, Filipinos residing in California, filed suit against Ferdinand Marcos
alleging violation of their First Amendment rights. Particularly, Pres. Marcos
seized and restrained distribution of the film 100 Days in September, which
plaintiffs produced and directed. Marcos arranged for plaintiffs’ arrest,
prompting them to flee the country. Marcos filed a motion to dismiss on the
ground of lack of jurisdiction, among others.
HELD: The District Court of California has no jurisdiction over the subject
matter of the complaint. Among the requisites for exercise of jurisdiction
under the ATS is a violation of international law. A violation of the law of
nations arises only when there has been a violation by one or more
individuals of those standards, rules or customs (a) affecting the relationship
between states or between an individual and a foreign state, and (b) used by
those states for their common good and/or in dealings inter se. A violation of
the First Amendment right of free speech does not rise to the level of
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internationally recognized rights and so does not constitute a violation of the
law of nations.
• Violation of human rights is a universal evil which warrants the
exercise of jurisdiction over completely foreign tort cases under the
ATS. This is so even though:
o There are no significant contacts between the forum, the
parties and the events; or
o There is no substantial state interest in the case other than
compliance with international law.
• In order for the ATS to apply, it must be established that the tortious
conduct violated an internationally protected human right.
4. PHILIPPINE RULE ON FOREIGN TORTS
• There is no specific statutory law governing the enforcement of
claims for damages arising from foreign torts.
o It is submitted that Philippine courts may exercise jurisdiction
over such cases provided the defendant can be served with
summons in the Philippines.
• It is suggested that we should follow the English Rule – tort
committed abroad is actionable in the country where it was
committed and also under Philippine law.
o There would be no choice of law problem because the
Philippine law on torts would be applicable regardless of the
forum chosen.
o Phillips v. Eyre: Plaintiff was arrested and imprisoned in
Jamaica upon orders of the defendant who was then the
Governor of Jamaica. He brought suit for damages before an
English court.
! Defense: martial law was declared, acts were lawful.
! HELD: Defendant not liable.
! In order to found a suit in England for a wrong alleged
to have been committed abroad, two conditions must
be fulfilled:
• First, the wrong must be of such a character
that it would have been actionable if
committed in England; and
• Second, the act must not have been
justifiable by the law of the place where it
was done.
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 • Time v. Reyes was an opportunity for the Philippine SC to clarify the F. LEX LOCI DELICTI
Philippine conflicts torts rule. But instead, it characterized the issue
as one of procedure than of PrIL.
Time, Inc. v. Reyes, et al.
Villegas and Enrile filed a libel suit against the publisher of Time Magazine, a
US corporation having its principal office in New York. The case was filed
before the CFI of Rizal. Time filed a motion to dismiss on the ground that
venue was improperly laid. The trial court deferred action on the MTD as the
grounds raised by Time did not appear indubitable. Time then filed a petition
for prohibition.
• Nullum crimen sine lege (no crime without law) – in order for a person
to be punished for an act, such act should have been made
punishable as a crime by law.
• Crimes may be defined by:
o Municipal law; and
o More recently, international law.
• NCC14 provides:
Penal laws and those of public security and safety shall be obligatory
upon all who live or sojourn in the Philippine territory, subject to the
principles of public international law and to treaty stipulations. (8a)

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

Ish Guidote Page 84 of 107

 o Court held that ultra vires acts cannot be part of official duty.
o Killing a person in cold blood while on patrol duty, running
over a child while driving with reckless imprudence on an
official trip, or slandering a person during office hours could
not possibly be covered by the immunity agreement. Our laws
and, we presume, those of the United States do not allow the
commission of crimes in the name of official duty.
Liang v. People
Liang worked as an economist with the ADB. He called one of the clerks a
bitch. Two cases for grave oral defamation were filed against him. The MeTC
received an “office of protocol” from the DFA stating that Liang was covered
by immunity from legal process under §45 of the agreement between the ADB
and the Philippine Government. The MeTC dismissed the cases.
HELD: Liang does not enjoy immunity from suit. Courts cannot blindly adhere
and take on its face the communication from the DFA that petitioner is
covered by any immunity. The due process rights of the prosecution were
violated when the MeTC dismissed the cases motu proprio. Even assuming
that petitioner is indeed immune from suit, the immunity extends only to acts
done in “official capacity.” Slandering a person cannot possibly be part of
official duty.
2. Crimes committed on board a foreign vessel even if it is within the
territorial waters of the coastal state.
• Philippine courts do not acquire jurisdiction over offenders.
• Philippine laws cannot apply unless the crime disturbs our peace and
order.
• UNCLOS, Art. 27 provides:
Criminal jurisdiction on board a foreign ship
1. The criminal jurisdiction of the coastal State should not be
exercised on board a foreign ship passing through the territorial sea
to arrest any person or to conduct any investigation in connection
with any crime committed on board the ship during its passage, save
only in the following cases:
(a) if the consequences of the crime extend to the coastal State;
(b) if the crime is of a kind to disturb the peace of the country or the
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good order of the territorial sea;
(c) if the assistance of the local authorities has been requested by the
master of the ship or by a diplomatic agent or consular officer of the
flag State; or
(d) if such measures are necessary for the suppression of illicit traffic
in narcotic drugs or psychotropic substances.
2. The above provisions do not affect the right of the coastal State to
take any steps authorized by its laws for the purpose of an arrest or
investigation on board a foreign ship passing through the territorial
sea after leaving internal waters.
3. In the cases provided for in paragraphs 1 and 2, the coastal State
shall, if the master so requests, notify a diplomatic agent or consular
officer of the flag State before taking any steps, and shall facilitate
contact between such agent or officer and the ship's crew. In cases
of emergency this notification may be communicated while the
measures are being taken.
4. In considering whether or in what manner an arrest should be
made, the local authorities shall have due regard to the interests of
navigation.
5. Except as provided in Part XII or with respect to violations of laws
and regulations adopted in accordance with Part V, the coastal State
may not take any steps on board a foreign ship passing through the
territorial sea to arrest any person or to conduct any investigation in
connection with any crime committed before the ship entered the
territorial sea, if the ship, proceeding from a foreign port, is only
passing through the territorial sea without entering internal waters.
EAP: The UNCLOS follows the French Rule.
United States v. Fowler
Fowler was accused of theft of 16 bottles of champagne on board the Lawton,
a US vessel then navigating the high seas. The complaint was filed before the
CFI of Manila. Fowler filed a demurrer claiming lack of jurisdiction as the
crime was committed on the high seas. The CFI dismissed the case.
Page 85 of 107
HELD: The CFI had no jurisdiction. Act No. 400 confers jurisdiction upon the
CFIs over any offense committed on the high seas, or within any of the
navigable waters of the Philippine Archipelago, on board a ship or watercraft
of any kind registered or licensed in the Philippine Islands. The vessel Lawton
was of US registry.
People v. Wong Cheng
Wong Cheng allegedly smoked opium on board the English merchant vessel
Changsa while it was docked in Manila Bay. The CFI dismissed the case for
lack of jurisdiction.
HELD: The CFI had jurisdiction. Under the French Rule, crimes committed
aboard foreign merchant vessels should not be prosecuted in the courts of
the country within whose territorial jurisdiction they were committed, unless
their commission affects the peace and security of the territory. But under the
English Rule, which is followed in this jurisdiction, crimes perpetrated under
such circumstances are in general triable in the courts of the country within
territory they were committed. Here, the crime was committed within the
territorial jurisdiction of the City of Manila, 2.5 miles from the shore.
United States v. Look Chaw
Cebu port authorities inspected the steamship Erroll which was of English
nationality. There they found two sacks of opium. Look Chow admitted that
he bought the opium from Hong Kong and intended to sell the same in Mexico
or Vera Cruz. A complaint was filed against him before the CFI of Cebu for
possession and sale of opium. The CFI overruled Look Chow’s demurrer
grounded upon lack of jurisdiction.
HELD: The CFI had jurisdiction. GENERAL RULE: Mere possession of a thing
of prohibited use in these Islands, aboard a foreign vessel in transit, in any of
their ports, does not constitute a crime triable by the courts of this country, on
account of such vessel being considered as an extension of its own
nationality. EXCEPTION: When the article, whose use is prohibited within the
Philippine Islands, in the present case a can of opium, is landed from the
vessel upon Philippine soil, thus committing an open violation of the laws of
the land. This case falls under the exception.
EAP: This case applied the French Rule.
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3. Crimes which, although committed by Philippine nationals abroad, are
punishable under Philippine law.
• RPC2 provides:
Application of its provisions. — Except as provided in the treaties and
laws of preferential application, the provisions of this Code shall be
enforced not only within the Philippine Archipelago, including its
atmosphere, its interior waters and maritime zone, but also outside of
its jurisdiction, against those who:
1. Should commit an offense while on a Philippine ship or airship;
2. Should forge or counterfeit any coin or currency note of the
Philippine Islands or obligations and securities issued by the
Government of the Philippine Islands;
3. Should be liable for acts connected with the introduction into these
islands of the obligations and securities mentioned in the presiding
number;
4. While being public officers or employees, should commit an
offense in the exercise of their functions; or
5. Should commit any of the crimes against national security and the
law of nations, defined in Title One of Book Two of this Code.
• Reason for extraterritorial application of penal laws: national interest
is imperiled by the acts enumerated.
Chapter XVII
CHOICE OF LAW AFFECTING CORPORATIONS
AND OTHER JURIDICAL ENTITIES
A. CORPORATIONS
Section 2, Corporation Code. Corporation defined. - A corporation is an
artificial being created by operation of law, having the right of succession and
the powers, attributes and properties expressly authorized by law or incident
to its existence. (2)
Section 123. Definition and rights of foreign corporations. - For the purposes
of this Code, a foreign corporation is one formed, organized or existing under
Page 86 of 107
any laws other than those of the Philippines and whose laws allow Filipino
citizens and corporations to do business in its own country or state. It shall
have the right to transact business in the Philippines after it shall have
obtained a license to transact business in this country in accordance with this
Code and a certificate of authority from the appropriate government agency.
(n)
1. PERSONAL LAW OF A CORPORATION
• Law of the state where it is incorporated.
• Since a corporation is an artificial being, it only has the rights and
powers conferred upon it in its charter.
• The state of incorporation may withhold from a corporation the power
to enter into certain contracts.
o If it enters into such contract in another state, the contract is
void.
M.E. Gray v. Insular Lumber Company
Gray is a stockholder of Insular Lumber, a resident foreign corporation
organized under the laws of New York. He filed a complaint to be allowed to
inspect the corporate books. The corporation opposed invoking the New York
Stock Corporation Law which granted the right of inspection only to
stockholders owning 3% of the capital stock of the corporation. The CFI
dismissed the complaint.
HELD: Gray has no right to examine the corporate books. Insular Lumber
being a corporation organized in New York, the laws of that state apply. He
would have been allowed to exercise the right of inspection under common
law had he alleged that:
• He seeks the information for an honest purpose;
• Inspection would protect his rights as a stockholder; or
• He would exercise the right in good faith, for a specific or honest
purpose.
Gray did not allege any of these.
Anglo-American Legal Theory on Corporation
Bank of Augusta v. Earle
The Bank of Augusta incorporated in Georgia. Earle, a resident of Alabama,
discounted bills of exchange with an agent of the Bank in Alabama. When the
notes fell due, Earle failed to pay. The Bank thereafter filed a collection suit in
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Alabama. The court ruled in favor of Earle holding that since the Bank was
incorporated in Georgia, it could not lawfully exercise its power in Alabama.
HELD: Bank of Augusta may sue in Alabama. Under the principle of comity,
English law has recognized the right of foreign corporations to enter into
contracts within its jurisdiction. There is no reason to exclude them when the
contracts are not contrary to state policy or injurious to its interests. In the
case at bar, there is no showing that the contract entered into by the parties is
repugnant to some public policy of Alabama. The parties entered into the
contracts in good faith, and no suspicion was entertained by either of them
that these engagements could not be enforced.
• Four basic theories drawn from the case of Bank of Augusta:
1. A corporation, being a creature of law, has no legal status
beyond the bounds of the sovereignty within which it was
created;
2. A corporation cannot exercise powers not granted by its
corporate charter or by the laws of the state of incorporation;
3. No state is under any obligation to adhere to the doctrine of
comity. Every state has the power to refuse to recognize or
prevent the foreign corporation from acting within its
jurisdiction; and
4. A state is not obliged to grant to a foreign corporation the
privileges and immunities common to the citizen of that
state.
• A corporation has no legal status beyond the bounds of the
sovereignty by which it was created.
o It cannot migrate to another sovereignty.
o But a corporation can act in another state with the latter’s
express or implied consent.
o In many US and PH court decisions, it has been held that a
foreign corporation may sue in the courts of another state.
! But how can an entity that does not exist sue in a
foreign state if such state does not recognize the
legal personality of the principal?
• Paul v. Virginia: a state may impose any term it may desire as a
prerequisite to admission.
o Exception: commerce clause – prohibits a state from
imposing conditions on corporations engaged in interstate
commercial activities and provides the basis of federal power
to regulate interstate commerce.
Page 87 of 107
 o A corporation is also a “person” protected by the due process
and equal protection clauses of the constitution.
o A state cannot impose “unconstitutional conditions” which
require the corporation to give up its constitutional rights
either as a prerequisite to doing business in the state or to
avoid being removed therefrom.
o Although a corporation is a person, it is not deemed a
“citizen” entitled to privileges given by the state to individual
citizens.
! A grant of corporate existence is a grant of special
privileges to the corporations, enabling them to act
for certain designated purposes as a single individual,
and exempting them from individual liability.
! If the right asserted of the foreign corporation, when
composed of citizens of one State, to transact
business in other States were even restricted to such
business as corporations of those States were
authorized to transact, it would still follow that those
States would be unable to limit the number of
corporations doing business therein.
2. EXCEPTIONS TO THE RULE OF INCORPORATION TEST
a. Constitutional and Statutory Restrictions
• A state 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.
• Art. XII of the 1987 Constitution provides:
Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production,
joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than
Ish Guidote
twenty-five years, and under such terms and conditions as may be
provided by law. In cases of water rights for irrigation, water supply
fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its archipelagic
waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish- workers in rivers,
lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and
conditions provided by law, based on real contributions to the
economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every contract entered into
in accordance with this provision, within thirty days from its
execution.
Section 10. The Congress shall, upon recommendation of the
economic and planning agency, when the national interest dictates,
reserve to citizens of the Philippines or to corporations or
associations at least sixty per centum of whose capital is owned by
such citizens, or such higher percentage as Congress may prescribe,
certain areas of investments. The Congress shall enact measures
that will encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to
qualified Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with its
Page 88 of 107
 national goals and priorities.
Pedro Palting v. San Jose Petroleum, Inc.
San Jose Petroleum is a corporation organized under the laws of Panama. It
petitioned the SEC for registration and licensing for sale of voting trust
certificates. The proceeds of the sale would be used to finance the operations
of San Jose Oil Co., a mining corporation. Petitioners are prospective
investors in Petroleum. They opposed the registration for being violative of
the foreign ownership restrictions in the Constitution.
HELD: San Jose Petroleum is not an American enterprise, hence, it is not
entitled to parity rights under the Constitution. It is not directly controlled by
US citizens because it is owned and controlled by Oil Investments, a
Panamanian corporation. Neither is it indirectly controlled by US citizens,
because Oil Investments is in turn owned by two Venezuelan corporations.
The nationality of the stockholders of the two Venezuelan corporations
cannot be determined at any given time as the stocks of such corporations
are being traded in the New York Stock Exchange. There is a difficulty in
determining “indirect” control as the ownership or control cannot be traced ad
infinitum.
b. Control Test During War
• In wartime, the courts may pierce the veil of corporate fiction and look
into the nationality of the controlling stockholders to determine the
“citizenship” of the corporation.
Filipinas Compañia de Seguros v. Christern, Huenefeld & Co., Inc.
Respondent obtained an insurance policy from petitioner covering
merchandise in a building in Binondo. During the Japanese military
occupation, the building and the merchandise were burned. Respondent
submitted its claim to petitioner but the same was denied because it was an
enemy corporation controlled by German nationals. Hence, the policy ceased
to be effective.
HELD: Petitioner is not obligated to pay respondent. Majority of the
stockholders of respondent are German subjects. As such, the corporation
became an enemy corporation upon the outbreak of World War II. However,
petitioner should return to respondent any premiums paid after the
declaration of war.
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• Daimler Co. v. Continental Tire and Rubber Co.: A business
corporation incorporated in England, with a British secretary, but
whose shares were controlled by Germans, was considered an enemy
corporation.
o Thus, prohibited from trading in England.
o Place of incorporation is not conclusive in determining
whether a corporation is an enemy corporation.
o The company itself is incapable of enmity or amity, since
such are attributable only to human beings.
o The company had the predominant character of its
shareholders who were Germans.
EAP: The court in Daimler ruled the same way as in Filipinas but it “looked
into the feelings” of the stockholders.
3. DOMICILE OR RESIDENCE OF FOREIGN CORPORATIONS
Article 51, Civil Code. When the law creating or recognizing them, or any other
provision does not fix the domicile of juridical persons, the same shall be
understood to be the place where their legal representation is established or
where they exercise their principal functions. (41a)
• A foreign corporation that has been licensed to do business in the
Philippines acquires a domicile here.
o Domicile is synonymous with residence in this case. Although
traditionally:
! Domicile – state of incorporation
! Residence – where the center of control reposes
• Why does the Corporation Code require a foreign corporation to
obtain a license before it can do business here?
o To prevent such corporations from acquiring domicile here
without first taking the steps necessary to render them
amenable to suit in the local courts.
State Investment House, Inc. v. Citibank, N.A.
Three creditor banks filed a petition for the involuntary insolvency of
Consolidated Mines, Inc. (CMI). Petitioner State Investment House (SIHI)
opposed as the Banks were not “resident creditors” of CMI in contemplation
of the Insolvency Law. The trial court dismissed the case for lack of
jurisdiction, but the CA reversed.
Page 89 of 107
HELD: The Banks are “resident creditors” for purposes of the Insolvency Law.
Under the NIRC, a resident foreign corporation is a foreign corporation
engaged in trade or business in the Philippines. They are likened to domestic
corporations. A corporation may have a residence (where it transacts
business) separate from its domicile (state of incorporation). What makes a
corporation a resident is not the grant of a license but its actually being in the
Philippines and doing business here.
4. JURISDICTION OVER FOREIGN CORPORATIONS
• The dictum in Bank of Augusta v. Earle to the effect that a corporation
has no existence outside the incorporating state has been abandoned
in view of foreign investments.
• Prevailing view: With the consent of a state, a foreign corporation
shall be recognized and will be allowed to transact business in that
state.
• Relevant provisions of the Corporation Code provide:
Section 125. Application for a license. - A foreign corporation
applying for a license to transact business in the Philippines shall
submit to the Securities and Exchange Commission a copy of its
articles of incorporation and by-laws, certified in accordance with
law, and their translation to an official language of the Philippines, if
necessary. The application shall be under oath and, unless already
stated in its articles of incorporation, shall specifically set forth the
following:
xxx
3. The name and address of its resident agent authorized to accept
summons and process in all legal proceedings and, pending the
establishment of a local office, all notices affecting the corporation;
4. The place in the Philippines where the corporation intends to
operate;
5. The specific purpose or purposes which the corporation intends to
pursue in the transaction of its business in the Philippines: Provided,
That said purpose or purposes are those specifically stated in the
certificate of authority issued by the appropriate government agency;
xxx
Ish Guidote
10. Such additional information as may be necessary or appropriate
in order to enable the Securities and Exchange Commission to
determine whether such corporation is entitled to a license to
transact business in the Philippines, and to determine and assess the
fees payable.
Attached to the application for license shall be a duly executed
certificate under oath by the authorized official or officials of the
jurisdiction of its incorporation, attesting to the fact that the laws of
the country or state of the applicant allow Filipino citizens and
corporations to do business therein, and that the applicant is an
existing corporation in good standing. If such certificate is in a
foreign language, a translation thereof in English under oath of the
translator shall be attached thereto.
The application for a license to transact business in the Philippines
shall likewise be accompanied by a statement under oath of the
president or any other person authorized by the corporation, showing
to the satisfaction of the Securities and Exchange Commission and
other governmental agency in the proper cases that the applicant is
solvent and in sound financial condition, and setting forth the assets
and liabilities of the corporation as of the date not exceeding one (1)
year immediately prior to the filing of the application.
Foreign banking, financial and insurance corporations shall, in
addition to the above requirements, comply with the provisions of
existing laws applicable to them. In the case of all other foreign
corporations, no application for license to transact business in the
Philippines shall be accepted by the Securities and Exchange
Commission without previous authority from the appropriate
government agency, whenever required by law. (68a)
Section 126. Issuance of a license. - If the Securities and Exchange
Commission is satisfied that the applicant has complied with all the
requirements of this Code and other special laws, rules and
regulations, the Commission shall issue a license to the applicant to
transact business in the Philippines for the purpose or purposes
specified in such license. Upon issuance of the license, such foreign
corporation may commence to transact business in the Philippines
and continue to do so for as long as it retains its authority to act as a
corporation under the laws of the country or state of its incorporation,
unless such license is sooner surrendered, revoked, suspended or
Page 90 of 107
 annulled in accordance with this Code or other special laws.
xxx
Section 127. Who may be a resident agent. - A resident agent may be
either an individual residing in the Philippines or a domestic
corporation lawfully transacting business in the Philippines: Provided,
That in the case of an individual, he must be of good moral character
and of sound financial standing. (n)
Foreign Corporations Doing Business are Bound by Philippine Law
Section 128. Resident agent; service of process. - The Securities and
Exchange Commission shall require as a condition precedent to the
issuance of the license to transact business in the Philippines by any
foreign corporation that such corporation file with the Securities and
Exchange Commission a written power of attorney designating some
person who must be a resident of the Philippines, on whom any
summons and other legal processes may be served in all actions or
other legal proceedings against such corporation, and consenting
that service upon such resident agent shall be admitted and held as
valid as if served upon the duly authorized officers of the foreign
corporation at its home office. Any such foreign corporation shall
likewise execute and file with the Securities and Exchange
Commission an agreement or stipulation, executed by the proper
authorities of said corporation, in form and substance as follows:
"The (name of foreign corporation) does hereby stipulate
and agree, in consideration of its being granted by the
Securities and Exchange Commission a license to transact
business in the Philippines, that if at any time said
corporation shall cease to transact business in the
Philippines, or shall be without any resident agent in the
Philippines on whom any summons or other legal
processes may be served, then in any action or proceeding
arising out of any business or transaction which occurred
in the Philippines, service of any summons or other legal
process may be made upon the Securities and Exchange
Commission and that such service shall have the same
force and effect as if made upon the duly-authorized
officers of the corporation at its home office."
Whenever such service of summons or other process shall be made
upon the Securities and Exchange Commission, the Commission
shall, within ten (10) days thereafter, transmit by mail a copy of such
summons or other legal process to the corporation at its home or
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principal office. The sending of such copy by the Commission shall be
necessary part of and shall complete such service. All expenses
incurred by the Commission for such service shall be paid in advance
by the party at whose instance the service is made.
In case of a change of address of the resident agent, it shall be his or
its duty to immediately notify in writing the Securities and Exchange
Commission of the new address. (72a; and n)
• §129, Corporation Code states:
Law applicable. - Any foreign corporation lawfully doing business in
the Philippines shall be bound by all laws, rules and regulations
applicable to domestic corporations of the same class, except such
only as provide for the creation, formation, organization or dissolution
of corporations or those which fix the relations, liabilities,
responsibilities, or duties of stockholders, members, or officers of
corporations to each other or to the corporation.
• §12, Rule 14, ROC as amended by A.M. No. 11-3-6-SC embodies the
rules with regard to service of summons:
Section 12. Service upon foreign private juridical entity. —When the
defendant is a foreign private juridical entity which has transacted
business in the Philippines, service may be made on its resident
agent designated in accordance with law for that purpose, or, if there
be no such agent, on the government official designated by law to
that effect, or on any of its officers or agents within the Philippines.
If the foreign private juridical entity is not registered in the Philippines
or has no resident agent, service may, with leave of court, be effected
out of the Philippines through any of the following means:
a) By personal service coursed through the appropriate court in the
foreign country with the assistance of the Department of Foreign
Affairs;
b) By publication once in a newspaper of general circulation in the
country where the defendant may be found and by serving a copy of
the summons and the court order by-registered mail at the last
known address of the defendant;
Page 91 of 107

c) By facsimile or any recognized electronic means that could
generate proof of service; or
d) By such other means as the court may in its discretion direct.
• Summons may also be served through diplomatic channels.
• Recall International Shoe: Minimum contacts required between
defendant and state so as not to offend traditional notions of fair play
and substantial justice.
5. RIGHT OF FOREIGN CORPORATIONS TO BRING SUIT
• A foreign corporation may not file a case before a Philippine court
unless it has a license to transact business in the Philippines.
• §133 of the Corporation Code provides:
Doing business without a license. - No foreign corporation
transacting business in the Philippines without a license, or its
successors or assigns, shall be permitted to maintain or intervene in
any action, suit or proceeding in any court or administrative agency of
the Philippines; but such corporation may be sued or proceeded
against before Philippine courts or administrative tribunals on any
valid cause of action recognized under Philippine laws. (69a)
Home Insurance Company v. Eastern Shipping Lines, Inc.
Petitioner sued respondent as the subrogee of shippers whose items arrived
in bad order due to the fault or negligence of respondent. The trial court
dismissed the complaints as Home Insurance was a foreign corporation not
licensed to do business in the Philippines.
HELD: Home Insurance had capacity to sue. §69 of the Corporation Code
does not provide that contracts entered into without the requisite license from
the SEC are null and void. The only consequence of the lack of a license is
that the foreign corporation cannot sue before Philippine courts. In this case,
Home Insurance did not have a license to do business at the time it entered
into the insurance contracts. However, by the time it filed the complaint, it
already had a license. Its subsequent registration cured the lack of capacity
at the time of the execution of the contracts.
Ish Guidote
Atlantic Mutual Insurance Co. v. Cebu Stevedoring Co., Inc.
Atlantic and Continental insured shipments of copra to be delivered by Cebu
Stevedoring to P&G. The shipments arrived in bad order. Plaintiffs paid the
consignees and were subrogated to the rights of the latter. They filed suit to
collect from Cebu Stevedoring. The CFI dismissed the complaint but gave
plaintiffs 10 days to amend their complaint to include an averment that they
were licensed to do business in the Philippines.
HELD: Capacity to sue must be averred in the complaint. The general rule
under the old Rules of Court is that such averment is not necessary except to
the extent required to show jurisdiction of the court. However, an exception
arises where the law denies a foreign corporation to maintain suit unless it
has previously complied with a necessary requirement. In such a case,
compliance with the requirement, or the fact that the corporation is exempt
therefrom, becomes a necessary averment in the complaint. In the case at
bar, Atlantic must either show that (1) it is engaged in business in the
Philippines and has a license for that purpose, or (2) it is not so engaged and
is suing upon an isolated transaction.
Aboitiz Shipping Corporation v. Insurance Company of North America
ICNA insured a shipment of wooden work tools and benches to be deliverd by
Aboitiz to STIP. The cargo was damaged upon arrival. ICNA paid the
consignee and was issued a subrogation receipt. It sued Aboitiz. Aboitiz
moved to dismiss on the ground that ICNA was doing business without a
license.
HELD: ICNA, as subrogee of the consignee, is the real-party-in-interest
clothed with personality to file the present suit. Its cause of action is founded
on the right of subrogation under Art. 2207 of the Civil Code. It cannot be
considered doing business in the Philippines. Hence, it may maintain suit
even without the requisite license. Aboitiz is liable for damages under Art.
1735 of the Civil Code, as it failed to prove that it exercised extraordindary
diligence as required by law.
Cargill, Inc. v. Intra Strata Assurance Co.
Cargill purchased molasses from NMC. Intra Strata issued a performance
bond to ensure compliance with the obligation. As NMC defaulted, Cargill filed
a complaint against Intra Strata. The RTC held Intra Strata liable to Cargill, but
the CA reversed as Cargill had no license to do business in the Philippines.
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HELD: As Cargill was not doing business in the Philippines, it did not need to
have a license before it could sue. The burden was on Intra Strata to show
that Cargill’s activities in the Philippines were not just casual or occasional,
but so systematic and regular as to manifest continuity and permanence of
activity to constitute doing business in the Philippines. This, it failed to do.
6. EXCEPTIONS TO THE LICENSE REQUIREMENT
a. Isolated Transactions
• Isolated business transaction – occasional, incidental and casual, not
of a character to indicate a purpose to engage in business.
• Does not constitute doing business as contemplated by law.
• An activity 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.
Eastboard Navigation, Ltd. v. Juan Ysmael and Company, Inc.
A charter party was executed between Eastboard as shipowner and Juan
Ysmael as charterer. The contract contained an arbitration clause in favor of
New York. A dispute was submitted to arbitration whereby Juan Ysmael was
ordered to pay Eastboard $53,037. Eastboard Navigation sued Juan Ysmael
before the CFI to enforce the arbitration decree.
HELD: Eastboard had personality to sue even without a license as it was
suing on an isolated transaction. Although Eastboard has already entered into
a previous charter party with the NARIC, these two isolated transactions do
not constitute doing business within the Philippines within the purview of §69
of the Corporation Law.
b. Action to protect trademark, trade name, goodwill, patent or for unfair
competition
• A foreign corporation doing business without a license may file a
complaint for unfair competition.
• Why? Equity considerations—
o To enjoin the unfair trader from pursuing the unlawful
competition; and
o To enable the aggrieved party to recover damages.
• Converse Rubber Corp. v. Jacinto Rubber and Plastic Co., Inc.:
Converse, a US corporation, was the manufacturer of “Converse
Chuck Taylor All Star” shoes, a trademark registered with both the US
Ish Guidote
and PH patent offices. It sued Jacinto for manufacturing
“Custombuilt” shoes of identical appearance as Chuck Taylor.
o HELD: Converse has capacity to sue.
! GENERAL RULE: A foreign corporation doing business
without a license cannot seek redress from our
courts “to enforce any legal or contract rights arising
from, or growing out, of any business which it has
transacted in the Philippine Islands.”
! EXCEPTION: Where the purpose of a suit is "to protect
its reputation, its corporate name, its goodwill,
whenever that reputation, corporate name or goodwill
have, through the natural development of its trade,
established themselves," an unlicensed foreign
corporation may sue in the Philippines. (Western
Equipment & Supply Co. v. Reyes)
o Converse does not have a branch office in the Philippines nor
does it do business here. Hence, it is not disqualified from
filing and prosecuting this action for unfair competition.
! Furthermore, it has a cause of action pursuant to the
Paris Convention for the Protection of Industrial
Property. Both the Philippines and the US are
signatories to such convention.
Leviton Industries v. Salvador
Leviton Manufacturing is a US corporation whose products are exported to
the Philippines. It filed a complaint for unfair competition against Leviton
Industries, a domestic corporation. The latter filed a motion to dismiss on the
ground of lack of capacity to sue.
HELD: Leviton Manufacturing failed to establish its capacity to sue. Under
§21-A of RA 166, the foreign corporation must have registered the trademark
with the Philippine Patent Office, or at the very least, be the assignee of such
trademark before it may seek redress from our courts. Said section further
requires that the country of which the plaintiff foreign corporation or juristic
person is a citizen or domiciliary, grants to Filipino corporations or juristic
entities the same reciprocal treatment, either thru treaty, convention or law.
Here, all that Leviton Manufacturing alleged was that it was a foreign
corporation.
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c. Agreements fully transacted outside the Philippines
• Policy: stabilization of commercial transactions.
• Universal Shipping Lines v. IAC: “On the issue of jurisdiction, we
uphold the appellate court's ruling that the private respondent may
sue in Philippine courts upon the marine insurance policies issued by
it abroad to cover international-bound cargoes shipped by a
Philippine carrier, even if it has no license to do business in this
country, for it is not the lack of the prescribed license (to do business
in the Philippines) but doing business without such license, which
bars a foreign corporation from access to our courts.”
• Furthermore, holding otherwise would make our country a haven for
unprincipled businessmen who enter into contracts in foreign
countries.
Hang Lung Bank, Ltd. v. Saulog
Cordova Chin Shin guaranteed Worlder Enterprises’ obligation to Hang Lung
Bank. When Worlder defaulted, the Bank sued Cordova before a Hong Kong
court. Default judgment was rendered against Cordova. The Bank thereafter
sent a demand letter to his Philippine address. After it received no reply, it
filed a collection suit before the RTC of Makati.
HELD: Hang Lung Bank had capacity to sue. §69 of the Corporation Law
applies only when the foreign corporation is doing business in the Philippines.
Here, Hang Lung Bank was not engaged in business in the Philippines; it
merely pursued its claims against private respondent for a contract which
was entered into and consummated outside the Philippines. Otherwise, the
court will be hampering the growth and development of business relations
between Filipino citizens and foreign nationals. Worse, it will be allowing the
law to serve as a protective shield for unscrupulous Filipino citizens who have
business relationships abroad.
d. Petition filed is merely a corollary defense in a suit against it
• Time, Inc. v. Reyes: By filing a petition for prohibition to prevent the
trial court from exercising jurisdiction, a foreign corporation is not
“maintaining any suit” but is merely defending one against itself.
o No need to allege and prove capacity to sue.
• Philippine Columbia Enterprises v. Lantin: If a domestic corporation
files a counterclaim against a foreign corporation, there is no implied
recognition of the latter’s capacity to sue. This is because the foreign
corporation (original plaintiff), is now the defendant. Hence, the
prohibition does not apply.
Ish Guidote
Philippine Columbia Enterprises v. Lantin
Katoh & Co., Ltd., a Japanese corporation, filed a complaint for the collection
of a sum of money against Philippine Columbia Enterprises. The latter filed a
motion to dismiss alleging Katoh’s incapacity to sue. The trial court deferred
ruling on the motion as the grounds raised therein did not appear to be
indubitable. Hence, Philippine Columbia filed this present petition for
certiorari. It objects to the deferment order issued by the trial court on the
ground that if it files a counterclaim against Katoh, it would constitute
recognition of the latter’s capacity to sue.
HELD: Filing of a counterclaim would not constitute recognition of Katoh’s
capacity to sue. A counterclaim partakes of the nature of a complaint and/or
cause of action against the plaintiff, so that if Philippine Columbian should
file a counterclaim, the Katoh, would be a defendant thereto, in which case the
said foreign corporation would not be maintaining a suit and, consequently,
§69 of the Corporation Law would not apply.
7. DEFINITION AND SCOPE OF “TRANSACTING BUSINESS”
• A corporation has the capacity to act and contract, through its agent,
in a state or country other than that in which it was created, with the
express or implied consent of that country or state.
• GENERAL RULE: A corporation can do business in a foreign state, the
state consent being presumed.
• EXCEPTIONS:
o Where it is prohibited by express statutory authority or
constitutional enactment;
o Where it is seeking to perform acts contrary to the public
policy of the state;
o Where it is seeking to exercise extraordinary and special
franchises; and
o Where it is seeking to perform acts which are not authorized
by the law of the state of its incorporation.
• The Foreign Investments Act of 1991 defines “doing business,” thus:
[T]he 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 totalling 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
Page 94 of 107
 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.
• It is important to determine whether a corporation is doing business
in the Philippines because it is the basis of the exercise of the courts’
jurisdiction over such corporation.
o Exercise of jurisdiction is justified based on the corporation’s
“presence” within the forum state or on its consent to be
sued.
• Quantum of business necessary to constitute “doing business” is
determined by the law of the state.
• A corporation may be considered to be doing business in a certain
state if the latter is “a community into whose business life the
defendant had significantly entered as determined by the quality,
substantiality, continuity and systematic nature of its activities.”
• Bryant v. Finnish National Airline: The test for doing business is a
simple pragmatic one which leads us to conclude that the defendant
is suable in that state.
• Top-Weld Manufacturing, Inc. v. ECED, S.A.:
o There is no general rule to determine what constitutes “doing
business.”
o Each case must be judged in light of its peculiar
circumstances.
o Casual, isolated transactions do not come within the meaning
of the law.
o But when a single transaction is not merely incidental or
casual but is indicative of the foreign corporation’s intention
to do business in the Philippines, such single act or
transaction constitutes “doing” or “engaging in” or
“transacting” business in the Philippines.
Ish Guidote
• Avon Insurance PLC v. CA: A reinsurance company is not doing
business in a certain state merely because the property or lives which
are insured by the original insurer are located in that state.
o Reinsurance contract is separate and distinct from the
original insurance contract.
Wang Laboratories, Inc. v. Mendoza
Wang Laboratories, Inc. (WLI) is a US corporation. Its products are distributed
in the Philippines by Exxbyte Technologies Corporation (ETC). ETC contracted
with ACCRA Law Office to install certain computer hardware and software.
ACCRA filed a complaint for breach of contract, impleading WLI, the US
corporation. WLI filed a motion to dismiss, but the same was denied as the
RTC found that it had voluntary submitted itself to the court’s jurisdiction.
HELD: The trial court has jurisdiction over the person of WLI. It was doing
business in the Philippines as evidenced by the following acts: (1) installing at
least 26 different products in various domestic corporations, (2) registering
its trade name with the PPO, (3) its controller visiting the Philippines to
conduct training programs, and (4) allowing ETC to use WLI’s registered logo
and trademark. A single act is not necessarily an isolated transaction. Where
a single act or transaction of a foreign corporation is not merely incidental or
casual but is of such character as distinctly to indicate a purpose to do other
business in the State, such act constitutes doing business within the meaning
of statutes prescribing the conditions under which a foreign corporation may
be served with summons.
Commissioner of Internal Revenue v. Japan Air Lines, Inc.
Japan Air Lines (JAL) appointed Philippine Airlines (PAL) as its resident agent
in Manila. PAL sold plane tickets and reservations for cargo spaces on behalf
of JAL. The latter received a notice of assessment from the CIR for
delinquency income taxes. The assessment was cancelled by the Court of
Tax Appeals.
HELD: JAL was doing business in the Philippines for purposes of income tax.
For the source of the income to be considered as coming from the
Philippines, it is sufficient that the income is derived from activities within this
country regardless of the absence of flight operations within Philippine
territory. Sale of tickets is the lifeblood of the airline business.
Page 95 of 107
Revocation of License to Transact Business
Section 134, Corporation Code. Revocation of license. - Without prejudice to
other grounds provided by special laws, the license of a foreign corporation to
transact business in the Philippines may be revoked or suspended by the
Securities and Exchange Commission upon any of the following grounds:
xxx
2. Failure to appoint and maintain a resident agent in the Philippines as
required by this Title;
3. Failure, after change of its resident agent or of his address, to submit to the
Securities and Exchange Commission a statement of such change as required
by this Title;
xxx
7. Transacting business in the Philippines outside of the purpose or purposes
for which such corporation is authorized under its license;
8. Transacting business in the Philippines as agent of or acting for and in
behalf of any foreign corporation or entity not duly licensed to do business in
the Philippines; or
9. Any other ground as would render it unfit to transact business in the
Philippines. (n)
• No. 9 is a catch-all which gives the SEC wide latitude to determine
WoN it should suspend or revoke the license.
• Procedure:
o There must be notice and hearing.
o SEC issues certificate of revocation.
! Copy given to government agency in charge.
! Copy given to foreign corporation at its office in the
Philippines.
Effect of Failure to Secure License to Transact Business
Section 133. Doing business without a license. - No foreign corporation
transacting business in the Philippines without a license, or its successors or
assigns, shall be permitted to maintain or intervene in any action, suit or
Ish Guidote
proceeding in any court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under
Philippine laws. (69a)
• Contracts entered into may be valid as between the parties but may
not be enforced in Philippine courts.
Merrill Lynch Futures, Inc. v. Court of Appeals
The Lara spouses entered into futures contracts with Merrill Lynch Futures,
Inc. (MLFI). They transmitted their orders through Merrill Lynch Philippines,
Inc. (MLPI), MLFI’s company servicing account. As the spouses incurred
losses in three transactions, they became indebted to MLFI. MLFI then filed
suit before the RTC of Quezon City. The Laras filed a motion to dismiss which
the trial court granted.
HELD: The dismissal of the case was proper. MLFI is doing business in the
Philippines without a license. It dealt with futures contracts in exchanges in
the United States in behalf and for the account of the Lara Spouses, and on
several occasions the latter received account documents and money in
connection with those transactions. However, the case must be remanded for
determination of whether the Lara spouses are estopped to deny MLFI’s
corporate existence after having dealt with the corporation for 7 years.
Granger Associates v. Microwave Systems, Inc.
Granger Associates, a US corporation, authorized Microwave Systems, Inc.
(MSI) to manufacture and sell its products in the Philippines. As MSI
defaulted on its obligations, Granger filed suit before the RTC of Pasay. The
court dismissed the complaint upon motion of MSI.
HELD: Granger was doing business in the Philippines without a license, hence,
it is barred from filing suit under §133 of the Corporation Code. It is now
settled that even one single transaction may be construed as doing business
under certain circumstances. A single act may bring the corporation within
the purview of the statute where it is an act of the ordinary business of the
corporation. In such a case, the single act or transaction is not merely
incidental or casual, but is of such character as distinctly to indicate a
purpose on the part of the foreign corporation to do other business in the
state, and to make the state a base of operations for the conduct of a part of
the corporations’ ordinary business.
Page 96 of 107
B. SPECIAL CORPORATIONS
1. RELIGIOUS SOCIETIES AND THE CORPORATION SOLE
Section 109. Classes of religious corporations. - Religious corporations may
be incorporated by one or more persons. Such corporations may be classified
into corporations sole and religious societies.
Religious corporations shall be governed by this Chapter and by the general
provisions on non-stock corporations insofar as they may be applicable. (n)
Section 110. Corporation sole. - For the purpose of administering and
managing, as trustee, the affairs, property and temporalities of any religious
denomination, sect or church, a corporation sole may be formed by the chief
archbishop, bishop, priest, minister, rabbi or other presiding elder of such
religious denomination, sect or church. (154a)
Section 116. Religious societies. - Any religious society or religious order, or
any diocese, synod, or district organization of any religious denomination,
sect or church, unless forbidden by the constitution, rules, regulations, or
discipline of the religious denomination, sect or church of which it is a part, or
by competent authority, may, upon written consent and/or by an affirmative
vote at a meeting called for the purpose of at least two-thirds (2/3) of its
membership, incorporate for the administration of its temporalities or for the
management of its affairs, properties and estate by filing with the Securities
and Exchange Commission, articles of incorporation verified by the affidavit
of the presiding elder, secretary, or clerk or other member of such religious
society or religious order, or diocese, synod, or district organization of the
religious denomination, sect or church, setting forth the following:
1. That the religious society or religious order, or diocese, synod, or district
organization is a religious organization of a religious denomination, sect or
church;
2. That at least two-thirds (2/3) of its membership have given their written
consent or have voted to incorporate, at a duly convened meeting of the body;
3. That the incorporation of the religious society or religious order, or diocese,
synod, or district organization desiring to incorporate is not forbidden by
competent authority or by the constitution, rules, regulations or discipline of
the religious denomination, sect, or church of which it forms a part;
Ish Guidote
4. That the religious society or religious order, or diocese, synod, or district
organization desires to incorporate for the administration of its affairs,
properties and estate;
5. The place where the principal office of the corporation is to be established
and located, which place must be within the Philippines; and
6. The names, nationalities, and residences of the trustees elected by the
religious society or religious order, or the diocese, synod, or district
organization to serve for the first year or such other period as may be
prescribed by the laws of the religious society or religious order, or of the
diocese, synod, or district organization, the board of trustees to be not less
than five (5) nor more than fifteen (15). (160a)
• Register of Deeds of Rizal v. Ung Siu Si Temple: The Ung Siu Si
Temple is a non-stock corporations whose members were Chinese
nationals.
o HELD: RD properly denied registration of agricultural land in
view of the constitutional prohibition against aliens owning
real property in the Philippines. At least 60% of the members
(since there is no capital stock) should be Filipino citizens.
o To permit religious societies controlled by aliens to acquire
agricultural lands would be to drive the opening wedge to
revive religious holdings in this country.
• Roman Catholic Apostolic Administrator of Davao v. Land
Registration Commissioner: The petitioner is a corporation sole, but is
a Canadian citizen.
o HELD: Registration allowed. In a corporation sole, the head of
the diocese is not the OWNER of the land but merely the
ADMINISTRATOR thereof. He administers the church’s
properties on behalf of the faithful who are Filipino citizens.
2. TRANSNATIONAL CORPORATIONS
• Transnational corporations – 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.
o Not organized under international law (treaty).
o All the locally incorporated branches are joined together by
common control and management of higher officials in the
home state.
• What is the personal law applicable to a transnational corporation?
Page 97 of 107
 o Originally, the law of the foreign state where it was originally
organized.
o However, by associating with local entrepreneurs and
incorporating under the laws of the host state, it becomes a
domestic corporation of such state.
o Still, major decisions regarding operation and management of
the corporation come from the parent corporation in the
industrialized state.
• It is not unusual for transnationals to drive unfair bargains with local
employees, customers, and suppliers.
o Only the local corporation will be held liable but not the parent
corporation.
Derivative Jurisdiction Over Foreign Corporations
• If a state has jurisdiction over a subsidiary, does it have jurisdiction
over the parent?
o Is ownership by the parent over the subsidiary’s stock
enough to confer jurisdiction?
o Will a subsidiary’s activities in a state give that state
jurisdiction over the parent?
• Restatement: Jurisdiction over the parent will exist if the parent
controls and dominates the subsidiary.
• Considerations in determining whether the subsidiary is maintaining
a separate corporate existence:
o Does it have its own—
! Records
! Assets
! Employees
! Advertising
! Payroll
! Accounting
o Are its directors the same as the parent corporation?
o Does it share an office with the parent corporation?
• US courts: Jurisdiction over the parent corporation may be acquired
when the subsidiary does not maintain a separate corporate
existence.
o The activities of the subsidiary in a state will provide basis for
jurisdiction over the parent if these activities:
! Provide a basis for jurisdiction over the subsidiary;
and
! Can be said to have been done in the course for the
parent corporation or on its behalf.
Ish Guidote
• Conversely, if a state has jurisdiction over the parent, does it have
jurisdiction over the subsidiary? YES, if—
o The subsidiary’s separate corporate existence has not been
adequately maintained; or
o The parent has acted within the state as the subsidiary’s
agent.
C. PARTNERSHIPS
Article 1767, Civil Code. By the contract of partnership two or more persons
bind themselves to contribute money, property, or industry to a common fund,
with the intention of dividing the profits among themselves.
Two or more persons may also form a partnership for the exercise of a
profession. (1665a)
• Choice-of-law questions often arise from the determination of the
rights, duties and liabilities of
o The partners inter se as agents and fiduciaries; and
o The partnership and partners in dealing with third persons.
• The extent of liability of parties to a partnership are wholly dependent
on the governing law.
• NCC51 states:
When the law creating or recognizing them, or any other provision
does not fix the domicile of juridical persons, the same shall be
understood to be the place where their legal representation is
established or where they exercise their principal functions. (41a)
• If a partnership is formed in one state but conducts its business in
another, it may be considered to be domiciled in the latter state.
• As to capacity to contract, the governing law is still the law of the
state where the partnership was formed.
o According to Art. 15 of the Code of Commerce, PH law still
applies in:
! The creation of the partnership’s establishments
within PH territory;
! Their mercantile operations; and
! The jurisdictions of the courts of the nation.
• As to the existence of a partnership, it is also the personal law of the
partnership which applies.
o Conditions and formalities (extrinsic validity)
Page 98 of 107
 • As to grounds for dissolution, it is still the partnership’s personal law PART FIVE: FOREIGN JUDGMENTS
which is applicable.
• In a limited partnership, the Civil Code provides that the limite Chapter XVIII
partners are not bound by the obligation of the partnership. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS
• King v. Sarria: A partnership was forged in Cuba whose laws provide
that only general partners are liable for partnership obligations. The
A. DISTINCTION BETWEEN RECOGNITION AND ENFORCEMENT
partnership entered into a contract in NY. It was sued before a NY
• Foreign judgment – all decisions rendered outside the forum.
court, and among the parties impleaded was Sarria, a limited partner
o Includes judgments, decrees and orders of:
domiciled in Cuba.
! Foreign courts
o HELD: Sarria cannot be held liable, following the law of the
! Sister states in a federal system
creation of the partnership and not the lex loci contractus.
• If the successful plaintiff fails to obtain satisfaction of a judgment in
the court which granted it, he may try to enforce it in another state
Extraterritorial Enforcement of In Personam Judgments Against Partnerships
where the defendant can be located.
• Is service of summons on a partner sufficient to acquire jurisdiction
• If the defendant wins and asserts that decision to preclude plaintiff
over the partnership?
from suing on the same cause of action in another court, he is asking
o Restatement:
for recognition of the original judgment.
! A state in which a partnership or other
unincorporated associations is subject to suit in the
firm or common name has power to exercise judicial RECOGNITION ENFORCEMENT
jurisdiction over the partnership or association if Does not necessarily require filing of
Requires filing of an action in F2
under the circumstances it would exercise judicial an action in F2
jurisdiction over and individual. Ex. F1 renders judgment on a
! A valid judgment rendered against a partnership or collection suit. A suit must be filed in
Ex. Divorce decree issued in Italy to
association is a binding adjudication as to the liability F2 on the F1 judgment and a new
an Italian gives him capacity to
of the partnership or association with respect to its judgment handed down by F2 before
remarry in the Philippines.
assets in every state. the debtor’s property may be
• Rule 14, ROC provides: attached.

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

Ish Guidote Page 99 of 107

 of the debt. Thus, an action may be brought in F2 to
enforce it.
Godard v. Gray
The plaintiffs (Frenchmen) sued defendants (Englishmen) before a French
court upon a charter party entered into in England. The contract contained a
clause which limited the penalty for non-performance to the estimated
amount of freight. The French court ruled for plaintiffs. They sought to
enforce the French judgment before an English court. Under English law, a
penal clause such as the one above is idle and inoperative.
HELD: The English interpretation of the charter party does not bar the action
for enforcement of the French court’s judgment. France does no enforce the
judgments of other countries in the absence of reciprocity, However, in
England, such judgments are enforced not by virtue of any treaty or statute,
but upon the following principle: Where a court of competent jurisdiction has
adjudicated a certain sum to be due from one person to another, a legal
obligation arises to pay that sum, on which an action of debt to enforce the
judgment may be maintained. It is in this way that the judgments of foreign
and colonial courts are supported and enforced. The following are acceptable
defenses to an action for enforcement: (1) the forum court acted without or in
excess of jurisdiction, (2) the judgment was obtained by fraud, or (3) the
foreign court knowingly and perversely disregarded the rights given to an
English subject by English law. In the present case, it appears that the French
courts, judicially, honestly, and with the intention to arrive at the right
conclusion, and having heard the facts as stated before them they came to a
conclusion which justified them in France in deciding as they did decide.
C. POLICIES UNDERLYING RECOGNITION AND ENFORCEMENT
• Ground: res judicata
o Those who have contested an issue shall be bound by the
result of the contest.
o Matters once tried and decided with finality in one jurisdiction
shall be considered settled as between the parties.
o Anglo-American jurisprudence: Foreign judgments are not
open to reexamination on the merits when placed in issue
before local courts.
! Rule is subject to a few exceptions.
• Policies involved:
o To give finality to litigation
o To protect the legitimate expectations of the parties
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• Thus, Rule 39 provides:
Section 40. Effect of foreign judgments or final orders. — The effect of
a judgment or 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 a judgment or final order upon a specific thing, the
judgment or final order is conclusive upon the title of the thing; and
(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 or final order 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. (50a)
• Apart from res judicata, consider also the concepts of “merger” and
“bar.”
o Merger – considers the cause of action as merged in the
judgment.
! Thus, cannot relitigate claim.
o Bar – when a successful defendant interposes the judgment
in his favor to avert a second action by the plaintiff on the
same claim.
o Direct estoppel – the relitigation of all matters decided are
precluded.
o Collateral estoppel – all essential issues of fact actually
litigated in the suit decided on by the foreign court are
rendered conclusive.
! Concerned with issue preclusion by barring
relitigation on an issue already litigated on in a prior
proceeding.
! Compare with res judicata which seeks to end
litigation by disallowing a suit on the same claim.
D. REQUISITES FOR RECOGNITION OR ENFORCEMENT
1. The foreign judgment was rendered by a judicial or a quasi-judicial tribunal
which had jurisdiction over the parties and the case in the proper judicial
proceedings.
• For in personam proceedings:
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 o Consent of the parties; or
o Relation of the parties or events to the forum (International
Shoe: satisfy minimum standards of fair play and substantial
justice)
• For in rem proceedings: power of the state over property found within
the territory.
• Where there is an egregious disregard for due process, the foreign
judgment will be denied recognition and enforcement.
Northwest Orient Airlines, Inc. v. Court of Appeals
and C.F. Sharp & Company, Inc.
Northwest and Sharp entered into an agreement whereby the latter was
authorized to sell the former’s tickets in Japan. Sharp failed to remit the
proceeds of the ticket sales. Northwest filed a complaint for damages before
the District Court of Tokyo. As the court failed to serve summons upon Sharp
in its Yokohama office, it authorized extraterritorial service in Manila. The
Manila office accepted the writs but still, Sharp failed to appear at the
hearings. The District Court ruled in favor of Northwest. It sought to have the
judgment in the Philippines. The trial court ruled in favor of Sharp as it the
Tokyo court had no jurisdiction over its person.
HELD: The extraterritorial service of summons was valid. The party attacking
the foreign judgment has the burden of overcoming the presumption of its
validity. Since the issue of service of summons is a procedural one, it is
governed by the lex fori. Sharp failed to plead Japanese law to show that
extraterritorial service is invalid. Thus, the doctrine of processual
presumption applies. Our Rules allow extraterritorial service of summons.
Boudard v. Tait
Marie Theodore Jerome Boudard was an employee of Steward Edward Tait.
He was killed in Hanoi by his co-employees. Boudard’s widow, Emilie, filed
suit against Tait before a Hanoi court. Summons was served in Manila upon
J.M. Shotwell, an agent of Churchill & Tait, Inc. Tait failed to appear at trial;
default judgment was rendered against him. Emilie sought to have the Hanoi
judgment enforced in Manila. The CFI dismissed the petition.
HELD: The Hanoi court had no jurisdiction over Tait. French law provides that
service upon non-residents shall be made (1) in their present place of
residence, and (2) if unknown, the writ shall be posted at the main door of the
hall of the court where the complaint has been filed. In the case at bar, the
Ish Guidote
summons was served upon an agent of a corporation, the latter being an
entity entirely different from the appellee. Thus, the Hanoi judgment is not
conclusive upon Philippine courts. It merely constitutes prima facie evidence
of the justness of appellants’ claim, and admits of proof to the contrary.
Ramirez v. Gmur
This case concerns the validity of a French divorce obtained by a Filipina
(Castro) and an Englishman (Kauffman). Castro subsequently remarried and
had children, thus the validity of the divorce is relevant in determining the
successional rights of her children from the second marriage.
HELD: The French divorce cannot be given effect in the Philippines. The
French tribunal has no jurisdiction to entertain an action for the dissolution of
a marriage contracted in [the Philippine Islands] by persons domiciled here,
such marriage being indissoluble under the laws then prevailing in this
country. The court of a country in which neither of the spouses is domiciled
and to which one or both of them may resort merely for the purpose of
obtaining a divorce has no jurisdiction to determine their matrimonial status.
As such, a divorce granted by such a court is not entitled to recognition
elsewhere.
• For as long as the foreign court acquired jurisdiction, its decisions will
not be disturbed whether it was reached through an adversary
proceeding or by default.
• Somportex v. Philadelphia Chewing Gum Corporation:
o Default judgment rendered by English court should still be
extended hospitality by American courts.
o In the absence of fraud or collusion, a default judgment is
conclusive as adjudication between the parties as when
rendered after answer and complete contest in open court.
o Test: whether a reasonable method of notification is
employed and reasonable opportunity to be heard is afforded
to the person affected.
Borthwick v. Castro
Borthwick, an American residing in the Philippines, executed promissory
notes in favor of Scallon. The notes provided for a choice-of-forum clause in
favor of the courts of Los Angeles, Honolulu and Manila. Borthwick defaulted;
Scallon sued before a Hawaii court. Summons was served in California.
Borthwick ignored the summons and so was declared in default. Judgment
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was rendered against him. Scallon, after failing to execute judgment both in
California and in Hawaii, filed a petition for enforcement before a Philippine
court. Again, Borthwick was declared in default. Judgment was rendered in
favor of Scallon.
HELD: The Hawaii judgment may be enforced in the Philippines. The Hawaii
court’s jurisdiction hinged entirely on the existence of two facts: (1) business
dealings in Hawaii, or (2) ownership of real property therein. Both facts were
pleaded in the complaint, thus it was incumbent upon Borthwick to prove
otherwise. Instead, he ignored the processes served upon him. There is thus
no evidence before the court to prove that the Hawaii court acted without
jurisdiction.
St. Aviation Services Co., Pte. Ltd. v. Grand International Airways, Inc.
GrandAir contracted with St. Aviation for the maintenance of two of its
airplanes. As it failed to pay in accordance with their agreement, St. Aviation
sued before a Singapore court in accordance with the forum selection clause
in the agreement. The Singapore court ordered the summons to be served
extraterritorially. With the assistance of the Sheriff of Pasay, summons was
served upon GrandAir in its head office. Still, it failed to appear before the
court and default judgment was rendered against it. St. Aviation filed a
petition for enforcement before the RTC of Pasay. GrandAir’s motion to
dismiss was denied. However, the CA reversed and held that since the action
before the Singapore court was in personam, service of summons should
have been personal or substituted, not extraterritorial.
HELD: The Singapore court acquired jurisdiction over the person of GrandAir.
Matters of remedy and procedure such as those relating to the service of
process upon a defendant are governed by the lex fori or the internal law of
the forum—Singapore law. The Rules of Court of Singapore authorize service
of summons “by a method of service authorized by the law of that country for
service of any originating process issued by that country.” The manner of
service undertaken by the Sheriff of Pasay City complied with the
requirements of Rule 14 of the Philippine Rules of Court.
2. The judgment must be valid under the laws of the court that rendered it.
• Pemberto v. Hughes:
o Summons was served on Mrs. Pemberto in Florida, but she
was only given 9 days to answer instead of the statutory 10.
o Judgment was rendered against her and an action for
enforcement filed before an English court.
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o Pemberto asserted that the decree was invalid.
o The English court held that since no substantial injustice was
caused to petitioner, all the court could look to is the finality
of the judgment and the jurisdiction of the court.
! Competence to entertain the sort of case which it did
deal with; and
! Competence to require the defendant to appear
before it.
o The error in procedure was not significant enough to alter an
otherwise valid decree.
3. The judgment must be final and executory to constitute res judicata in
another action.
• Interlocutory/provisional order – one which contemplates that a fuller
investigation leading to a final decision may later be held.
o Creates no obligation on the forum court to recognize or
enforce it.
Nouvion v. Freeman
Henderson purchased properties from Nouvion in Spain. Under the terms of
the deed of sale, Henderson was required to make certain payments. After
Henderson’s death, Nouvion sought to be appointed administrator of his
estate. It was necessary for him to show that he was a creditor of the
deceased. Nouvion alleged that he obtained a judgment of a foreign court
upon which he was entitled to sue in that country, and which in that country
established the existence of a debt.
HELD: The foreign judgment cannot be enforced as it is not a final order. The
rule on recognition only applies to a judgment which results from an
adjudication of a court of competent jurisdiction, such judgment being final
and conclusive. In order to establish that a final and conclusive judgment has
been pronounced, it must be shown that in the court by which it was
pronounced it conclusively and finally and forever settles the existence of the
debt of which it is sought to be made conclusive evidence in this country, so
as to become res judicata between the parties. In the present case, the
foreign tribunal may still make an adjudication that there is no obligation and
no debt. Thus, there can be no enforcement.
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 Querubin v. Querubin
Silvestre and Margaret Querubin were married in New Mexico. They had one
daughter, Querubina. Margaret filed for divorce before a Los Angeles court.
The court granted the petition and awarded joint custody to the spouses.
However, it later modified the decree granting custody to Silvestre as
Margaret was living with another man. As Margaret eventually married the
other man, the court issued an interlocutory decree granting the custody of
Querubina to her. Silvestre took Querubina to Ilocos Sur. Margaret filed a
petition for habeas corpus invoking the interlocutory decree. The trial court
dismissed the petition.
HELD: The interlocutory decree cannot be enforced. It is not final, and it
changes depending on the circumstances. A divorce decree is generally
respected by the courts of other countries, but such a decree has no
controlling effects in another states as to facts and conditions occurring
subsequently to the date of the decree. The court of another state may, in the
proper proceedings, award custody otherwise upon proof of matters
subsequent to the decree which justify the decree to the interest of the child.
Since the decree in this case is not yet final, it cannot be enforced.
4. The state where the foreign judgment was obtained allows recognition or
enforcement of Philippine judgments.
• Reiteration of international comity as basis for recognition and
enforcement of a foreign judgment.
• Hilton v. Guyot: French judgment was not declared conclusive
because “international law is founded upon mutuality and
reciprocity.”
o French law allowed review of American decisions.
o Comity was used as a means of retaliation.
o French legal system coerced to change its laws.
o Criticism: litigants are punished because of their
governments’ policies over which they have no control.
! Also, is the task of formulating policies through
reciprocity a power to be appropriately exercised by
the judiciary?
• Trautman & Von Mehren: Difficulties with the reciprocity
requirement—
o Tends to lower rather than raise the standards of practice.
Hence, no constructive effect.
o Private litigants burdened may not be closely attached to the
legal order sought to be changed.
Ish Guidote
o Administration can be difficult because finding the exact law
which grants reciprocity is, in itself, still nebulous.
! Is general recognition sufficient or must there be
specific recognition of a case identical or analogous
to the one before the court?
Cowans, et al. v. Teconderoga Pulp & Paper Co.
Plaintiffs obtained a favorable money judgment from a Quebec court. They
sought to have the same enforced in New York. Respondents claim that the
Quebec judgment is not conclusive but is merely prima facie proof of liability.
Under Quebec law, “any defense which was or might have been set up in the
original action may be pleaded to an action brought upon a judgment
rendered out of Canada.” Respondents theorize that New York courts should
not recognize the Quebec judgments as adjudications of the issues because
the Quebec courts to not reciprocate as to New York judgments.
HELD: The Quebec judgment should be enforced in New York. GENERAL
RULE: A judgment recovered in a foreign country, when sued upon in the
courts of this state, is conclusive, so far as to preclude a retrial of the merits
of the case, subject, however, to certain well-maintained exceptions.
EXCEPTIONS:
1. Where the judgment is tainted with fraud;
2. Where the judgment is against public policy of the state;
3. Where the foreign court had not jurisdiction.
The reciprocity exception under Hilton v. Guyot is no longer controlling. The
rule [on recognition] rests not on the basis of reciprocity but upon the
persuasiveness of the foreign judgment.
5. The judgment must be for a fixed sum of money.
• Unless the foreign judgment specifies performance or delivery, there
is nothing for the forum court to enforce.
• Sadler v. Roberis: Until taxation, the plaintiff cannot enforce his claim.
o Jamaican court held that costs (which are to be taxed) should
first be deducted from the award.
o Hence, the amount of the decree was not fixed.
• What if the plaintiff showed the applicable tax rate? Would the
amount now be fixed?
6. The foreign judgment must not be contrary to the public policy or the good
morals of the country where it is to be enforced.
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 • The forum is not under any duty to apply foreign law (or recognize
foreign judgments) when such is repugnant to its internal policies or
prejudicial to its interests.
o The then prevailing choice-of-law method was the vested
rights theory.
Querubin v. Querubin, supra
HELD: The trial court did not commit grave abuse of discretion in dismissing
the petition for habeas corpus. Under the Divorce Law 2710, the offending
spouse may not be awarded custody of the minor children. It is against the
law, public policy and good customs to award custody to the mother who has
violated her marital vows. If the court concedes to the petition, Querubina
would be placed under the control of the man who dishonored her mother and
offended her father.
7. The judgment must not have been obtained by fraud, collusion mistake of
fact or mistake of law.
• WoN there is fraud is to be decided by the court on the basis of its
internal law.
o Can be the basis of a conflicts problem if principles not in line
with those of the foreign state.
• §48, Rule 39 provides:
x x x In either case, the judgment or final order 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. (50a)
• The kind of fraud referred to is extrinsic fraud.
o A finding of intrinsic fraud would result in a trial de novo,
hence, it is not a defense in an action to enforce a foreign
judgment.
• Extrinsic fraud – signifies that the party had been deprived of his day
in court.
o Must be an extrinsic, collateral act which vitiates the most
solemn proceedings of the courts of justice.
o Examples:
! Collusion by the parties
! Suppression of an important document
! Presentation of a forged will or a false affidavit
Ish Guidote
E. GROUNDS FOR NON-RECOGNITION
Section 4, Uniform Foreign Money-Judgments Recognition Act. Grounds for
Non-Recognition.
(a) 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; or
(3) The foreign court did not have jurisdiction over the subject matter.
(b) 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] [claim for relief] on which the judgment is
based is repugnant to the public policy of this state;
(4) The 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 was to be
settled otherwise than by proceedings in that court; or
(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.
• The first three grounds are mandatory while the last three are
discretionary.
• Most debatable: lack of jurisdiction in personam.
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 o Why? In most courts, forum-defendant contacts are
appropriate bases for the exercise of jurisdiction.
o Traditional basis (presence) has long been eroded.
o In fact, the last ground (forum non conveniens) further
restricts the use of presence as the cornerstone for exercise
of jurisdiction.
• Grounds recognized under various Hague Conventions:
o Child not given opportunity to be heard, public policy
exception (Hague Convention on Jurisdiction, Applicable Law,
Recognition, Enforcement and Cooperation in Respect of
Parental Responsibility and Measures for the Protection of
Children);
o Violation of the ordre public of the recognizing state;
o Failure to comply with the due process requirements.
Sps. Belen v. Hon. Chavez
The Sps. Pacleb filed a petition for enforcement of judgment against the Sps.
Belen before the RTC of Batangas. However, as the Belens were already
residing in California, summons was served on their last known address in
Alaminos, Laguna. A certain Atty. Alcantara entered his appearance for
petitioners, claiming that he was retained by their relatives. He filed numerous
pleadings on behalf of the spouses. Judgment was rendered against the Sps.
Belen. A copy of the judgment was sent to Atty. Alcantara, but was returned
with the notation “addressee deceased.” The copy was instead sent to the
Alaminos, Laguna address. Subsequently, Atty. Culvera entered his
appearance for the Sps. Belen and sought to appeal the judgment.
HELD: The RTC acquired jurisdiction over the persons of the Sps. Belen
through the appearance of Atty. Alcantara. The action in this case is one in
personam, thus, summons should be served personally or through
substituted service. Summons sent to the Alaminos address complies with
neither of the allowable modes. However, Atty. Alcantara filed various
pleadings before the court. Attached to the pleadings were certain documents
which could only have been supplied by the Sps. Belen. In sum, petitioners
voluntarily submitted themselves through Atty. Alcantara to the jurisdiction of
the RTC. However, with respect to service of a copy of the judgment, the same
only became effective when Atty. Culvera received a copy.
Ish Guidote
F. MODERN DEVELOPMENTS IN THE ENFORCEMENT OF FOREIGN
JUDGMENTS
• There has been a growing effort to take the rout of treaties and
multilateral conventions to regulate recognition and enforcement
practices.
1. The Hague Conference on Private International Law
• Convention on the Recognition and Enforcement of Foreign
Judgments in Civil and Commercial Matters:
o Established the conditions and prerequisites under which the
contracting states would recognize and enforce each other’s
judgments.
o Significant provisions:
! Applicability of the convention irrespective of the
nationality of the parties;
! Non-refusal for the sole reason that the court of the
state of origin has applied a law other than that which
would have been applicable according tot eh rules of
private international law of the state addressed.
o Convention also addresses the issues of:
! WoN a default judgment is subject to enforcement;
and
! Procedures for enforcement and recognition.
• Supplementary Protocol:
o Applicable to all foreign judgments, irrespective of place of
origin, affecting all matters to which the convention extends,
directed against a domiciliary of a contracting state.
o Domiciliary may obtain recognition/enforcement by a
contracting state where the foreign judgment was based on
an improper forum.
• Convention on the Recognition and Enforcement of Decisions
Relating to Maintenance Obligations:
o Relates to family, relationship, parentage, marriage or affinity.
th
• In 1993, the 17 Session of the Hague Convention looked into the
possibility of a general convention on recognition and enforcement.
o Benefit: uniform procedure.
o Ease in determining the effects that a contracting state would
give to a foreign judgment.
o Could address the practice of using unreasonable
jurisdictional bases against persons not domiciled in a
contracting state.
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2. The EEC Convention of 1968
• Convention Relating to the Jurisdiction of Courts and Enforcement of
Decisions in Civil and Commercial Matters
o Extends to the Common Market area the reach of
jurisdictionally improper for a presently available against
non-residents under the procedural systems of four member
states.
o Permits member states to include in bilateral treaties clauses
that protect domiciliaries against recognition of foreign
judgments that are improperly based.
3. Uniform Foreign Money-Judgments Recognition Act
• Applicable to any foreign country judgment that is final and
conclusive and enforceable.
o Even if appeal is available/pending.
• Excludes judgments from:
o Taxes
o Penalties
o Child/spousal support
G. PROCEDURE FOR ENFORCEMENT
1. New action/petition
• Common law: When a foreign judgment is recognized, it is not
instantaneously executed as a judgment.
• Adopted by the Philippines.
• A petition must be filed in the proper court attaching an authenticated
copy of the foreign judgment to be enforced.
• Recall Rule 132:
Section 24. Proof of official record. — The record of public documents
referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or
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.
(25a)
Ish Guidote
• Why the requirement of a new action? It seeks to reconcile two
principles—
o First, the territorial jurisdiction of courts, which demands that
the enforcement of a foreign judgment should be based upon
something other than the authority of the rendering court
which ceased at its jurisdictional limits; and
o Second, res judicata.
Ingenohl v. Olsen & Co.
Ingenohl sued Olsen & Co. before a Hong Kong court for trademark
infringement. The Hong Kong court ruled for plaintiff. He sought to enforce
the same in Manila, and the CFI ruled in his favor. However, the Philippine
Supreme Court reversed on the ground of clear mistake. The Hong Kong court
allegedly failed to give effect to the seizure of the Alien Property Custodian of
the trademarks and their subsequent sale/assignment to Olsen & Co.
HELD: The sale/assignment of the trademarks to Olsen & Co. does not give
the latter the exclusive right to use the same in Hong Kong. : A trademark
started elsewhere would depend for its protection in Hong Kong upon the law
prevailing in Hong Kong and would confer no rights except by the consent of
that law. The Hong Kong judge authoritatively declared that the assignment
of the Custodian to Olsen & Co. will not be allowed to affect the rights of the
party concerned in Hong Kong.
2. Summary proceeding for enforcement of judgments (other civil law
countries)
• Exequatur – validation proceeding
• French law: authenticated copy of judgment + validation certificate
(formule executoire) issued by the Clerk of Court.
• Once validated, the foreign judgment is given the same effect as a
local judgment.
• Compared to this method, the common law method is protracted and
expensive.
3. Judgment registration
• May or may not involve judicial supervision.
• Authenticated copy of judgment filed in the registrar’s office + other
proof required by domestic laws.
o Judgment converted into a local one that is immediately
executory.
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 • England requires judicial approval to avoid mistake or negligence.

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

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

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