Sie sind auf Seite 1von 84

3C 2006 CONFLICT OF LAWS REVIEWER for ATTY.

JO SABIO
NATURE, DEFINITION, AND SCOPE vested rights acquired from a foreign law, not the foreign law itself, may be recognized by the
C/O: VICTOR RAMOS forum; and, (b) such vested rights are recognized in the forum.4
(Salonga, CHAPTER I, 1995) Savigny adheres to the idea that a decision ought to be the same irrespective of the forum.
Such idea is premised on the concept of an “international community” or “comity” having a
Problems in Conflicts of Laws Arise Due to the Concurrence of 2 Factors: single body of rules to resolve conflict of laws problems. Though there is agreement to have
the division of the world into different states or territorial units, each state or unit having such single body of rules, there is divergence on the law to govern each and every legal
different systems of laws relation.5
the presence of a situation containing a foreign element, that is to say, an event or Mancini revokes the domiciliary rule but proposes one of nationality. He asserts that if one’s
transaction affected by the diverse laws of two or more states or territorial units nationality is recognized, personality is easily assumed and allows such person to have legal
standing in the forum. This school of thought abides to two rules: (a) legal rules are binding
Definition to all nationals irrespective of territory; and (b) legal rules are binding to all nationals within a
Salonga: Private International Law or Conflict of Laws is that part of the law of each state which given territory.6
determines whether in dealing with a factual situation involving a foreign element, the law or
judgment of some other state will be recognized or applied in the forum Function and Object of Conflict of Laws
Private international law is merely a part of the municipal law of each state Salonga: The Function of Private International Law is: 3 fold
Subject is any factual situation containing any foreign element To prescribe the conditions under which a court or agency is competent to entertain a
The primary function of this department of law is to determine whether the rules of law or suit or proceeding involving facts containing a foreign element
the judgments of some other state or states, and if so, to what extent, should be recognized To specify the circumstances in which foreign judgment will be recognized as valid and
or applied in the forum binding in the forum
To determine for each class of cases the particular system of law by reference to which
Other definitions of Conflict of Laws: the rights of the parties must be ascertained – this is the fundamental problem of choice of
Scoles has defined Conflict of Laws as: “the body of law that aspires to provide solutions to law
international or interstate legal disputes between persons or entities other than countries 4 important points:
and states as such.”1 1. Rules of Private International Law, like all other rules of law, apply only to certain given
Leflar asserts: “Any case which involves facts occurring in more than one state or nation so facts not characterized as creating some legal relationship
that in deciding the case it is necessary to make a choice between the laws of the different 2. The selection of legal systems open to the court is limited to those that are
states or countries, is a conflict of laws case”2 simultaneously valid
Cheshire and North state: “that part of law which comes into play when the issue before the 3. The legal effects of a certain set of facts are not always determined by one single legal
court affects some fact, event or transaction that is so closely connected with a foreign system.
system of law as to necessitate recourse to that system… [It is] the rules voluntarily chosen 4. It is sometimes necessary to apply several systems, either cumulatively or alternatively
by a State for the decision of cases which have a foreign complexion.”3 Cumulative application:
Leflar, unlike the other authors, defined Conflict of Laws as a kind of controversy and not as (1) a given set of facts may produce legal effects each of which is governed by a different legal
a body of law. system,
Regarding Conflict of Laws as a body of laws: (a) Scoles states that such laws provide a (2) or a given set of facts may produce legal effects only if certain conditions common to two
solution; (b) Cheshire and North state that such laws affect the fact, event or transaction legal systems are fulfilled
closely connected to a foreign system of laws; and (c) Salonga first recognizes such conflict Alternative application: under the Philippine law, if an alien executes a will in the Philippines,
rules as being part of municipal law, and such will aid in determining whether a foreign law or the formal validity of the will may be judged alternatively by the requirement of internal
judgment is to be recognized and applied. Finally, it is only Salonga who expands the scope of Philippine law or of his own national law. If either law considers it formally valid, it may be
Conflict of Laws from foreign laws to foreign judgments. admitted to probate
STORY, SAVIGNY AND MANCINI: ALSO: Promoting the peaceable intercourse of private persons, made imperative by
Story emphasizes the exclusive sovereignty and jurisdiction of one state over its own the economic and social demands of an interdependent world, through rules that are
territory; thus, the laws or judgments of one state should in no way directly affect nor bind eminently just and workable, may well be the ultimate objective of Private International Law
residents and/or property in another state. This territorial system yields to two factions: (a) – protection of the justified and rational expectations of parties to a transaction, the
application of the law of the state having a dominant interest in a given set of facts, the

1
Scoles, Hay, Brochers and Symeionides, Conflict of Laws, 1 (3rd Ed.) 4
Id at 21-23.
2 5
Robert Leflar, The Law on Conflicts of Laws, 1 (1959 Ed.) Id at 23-24.
3 6
Peter North and J.J. Fawcett, Cheshire and North’s Private International Law, 5 (2005 Ed.). Salonga, 24.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
1
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
promotion of stability and predictability by achieving uniformity of solution to a case In matters of succession, where a person leaves immovables in various countries, the law of
wherever the forum may be situated, and of course, the dispensing of justice in individual the countries concerned should be applied respectively to the immovable therein situated
cases. rather than for the latter to be regulated by one and only one law

Distinguished from Public International Law The Doctrine of Comitas Gentium


• Doctrine: States are not obligated to take note of foreign laws unless imposed by
PIL CoL treaty
R: Rules are national or • Product of Netherland’s independence
Rules are international in municipal • Principles: Doctrine of Pure Territoriality
Character
nature X: they are embodied in • Laws of every state operate within the territorial limits, and such is binding to all
conventions subjects but not beyond those limits
Source Common will of states Will of a particular state • Subjects of a state are all those who are found within the limits of its territory, whether
Diplomatic channels, good they reside there permanently or whether their presence there is only temporary
National or municipal
Recourse offices, mediation, • Every sovereign, out of comity, admits that a law which has already operated in the
tribunals
conciliation, arbitration, etc country of origin shall retain its force everywhere, provided that this will not prejudice
(1) deals with private the subjects of the sovereign by whom its recognition is sought
(traditional PIL) individuals (state has no • This doctrine merely states that the Theory of Statutes is subordinate to the idea of
(1) deals for most part with direct interest) Comitas
States (2) assumes control over Beginning of codifications
Others (2) recognizes only transactions strictly private • Prussian General Code of 1794 made emphasis of res magis valet quam, which as applied
transactions in which in nature, in which the state to Private International Law:
sovereign states are as such generally has no • If a person has 2 domiciles, which is possible under European laws, that domicile is
interested interest (private decisive under the law of which the contract or act in question is valid
transactions) • If a person domiciled abroad enters into contract within Prussian territory respecting
chattels there, the contract is valid if under the law is either (his domicile or that of
NB: Monists do not recognize the distinction between PIL and CoL. In their view, individuals Prussia) he is capable of entering into contracts
alone are and can be the subjects of international law, public or private 19th Century Jurists
2 groups of writers
HISTORY AND IMPORTANCE
C/O: VICTOR RAMOS Theoretical Positive
(Salonga, CHAPTER II, 1995) Deductive method Inductive method
Studies actual rules in force and reduce
HISTORY OF THE SUBJECT Begins with a set of priori principles to
them to systematic order; do not claim
Earliest Period – Theory of Statutes to solve conflicts derive a body of consistent rules
universal validity
Bartolus (from the Italian city-states) – Father of Private International Law
Determined CoL rules by differentiating 3 types of statutes Joseph Story
real statutes • American judge, Commentaries on the Conflict of Laws (1834)
personal statutes
• Approach was more positive than theoretical
mixed statutes
• Maxims:
The French Jurists of the 16th century: 2 thinkers
Charles Dumoulin • Every nation possesses an exclusive sovereignty and jurisdiction within its own
Doctrine: Parties to the contract could choose the law that was to govern their agreement territory that directly binds all properties within its territory, and all persons who are
Bertrand D’Argentre residents within it (territorial sovereignty)
• No state or nation can by its law directly affect or bind property out of its own
Doctrines territory, or bind persons not resident therein, whether they are natural born subjects
Whenever there was any doubt as to whether a statutory rule was personal or real, presumed or others
it is real Friedrich Carl von Savigny
• Great German jurist, System of Modern Roman Law (1849)
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
2
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• It is expedient that in cases containing a foreign element, the same legal relations have C/O: VICTOR RAMOS
to expect the same decision whether the judgment be pronounced in this state or in (Salonga, CHAPTER III, 1995)
that
• It is essential to bear in mind the existence of an international community of nations SOURCES
having intercourse with one another Codifications
• Comity is beneficial and advantageous to all concerned, the state and the individuals Old Civil Code of the Philippines
• The question is not W/N the rule is related to property, persons or acts but to classify First 4 articles of Chapter I follow Mancini, with the exception that personal property under
legal relationships so as to ascertain for every legal relation that law to which, in its the New Code is subject to the law of the country where it is situated instead of the national
proper nature, it belongs or is subject and thus find out where a relation has its seat law of the owner
(the situs) – the seat of a particular legal relationship Code of Commerce and Insurance Code likewise have similar provisions
Pasquale Stanislao Mancini Special legislation
• Nationality as the Basis of the Law of Nations (1851) Foreign Investments Act of 1991
• Opposing the rule on domicile, Mancini asserts the rule of nationality, the components Corporation Code
of which are: religion, customs of life, language, race of the people, historical traditions, General Banking Act
even the landscape of the country and its climate Trade Marks and Trade Names Law
Patent Law
• Personality of an individual is determined only by his nationality; an individual’s
Carriage of Goods by Sea Act
personality is recognized only if his nationality is recognized
Investment Incentives
• In every kind of legal system, there are 2 kinds of rules
Export Incentives Act
• those created in the interest of private individuals – binding to persons who belong to Multilateral Treaties and International Conventions
the country by nationality 2 methods of avoiding or minimizing conflicts
• those for the protection of public order – binding to all within the territory 1. To secure by international conventions or treaties the unification of the internal
Modern Developments rules or laws of the various countries or territorial units upon as many legal
• Neo-statutory system subjects as possible
o Assumption: 2 or more independent laws are applicable to conflicts problem These are not sources of Private International Law
o Then proceed to devise some method to determine the law that shall prevail This would eliminate the differences which would give rise to problems of Private
o Many adhere to Mancini’s theory International Law
• International system 2. To unify the rules of Private International Law so that a case involving a foreign
o There exists or should exist, a single body of international rules that can and should element may be decided in the same way, irrespective of the forum or place of
solve all legal problems that involve a foreign element litigation
o A juridical act should in all countries be governed by the law of the place in which the Conventions and treaties with this goal are primary sources of Private International Law
act has its seat (Savigny) Bipartite Treaties
o But while almost every adherent of the international system is agreed on this abstract Case Law: Philippines: 3 categories
principle, there are wide differences of opinion on the most appropriate law to 1. Those which are based on the assumption, though not expressed in clear language, that
govern each legal relation only Philippine internal rules govern any problem; this is noticeable in cases involving
• Territorial system contracts and personal status
o Only the law of a state applies to persons and things within its territory. Foreign law 2. Those which adopt Anglo-American doctrines and precedents without regard to the
is not applied in the forum provisions contained in the Civil Code; this is true in cases of validity of foreign divorces
o 2 Factions 3. Those cases which attempted to introduce Anglo-American rules and doctrines, which a
o only rights vested or acquired under the foreign law are recognized in the forum, but view not only to filling up the gaps by the Civil Code, but also to merge and harmonize
not the foreign law itself them with established Civil law principles
o vested rights theory is illogical and is not true in practice International Customs: Law of Nations
Second Restatement of the Conflicts of Law (by American Law Institute) Immovable property is governed by the law of the situs]
In the absence of statutory rules, it holds that the applicable law in a conflicts case is the law Formalities of a legal act are governed by the law of the place where it is executed
of the most significant relationship which is determined by weighing the factors considered Tort is governed by the law of the place where the tortuous act was committed
more relevant The Constitution
Indirect Sources
SOURCES OF PRIVATE INTERNATIONAL LAW
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
3
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Natural law – this presupposes a body of ideal precepts of universal validity for all peoples at 3. Jurisdiction over the Plaintiff – acquired from the moment he invokes the aid
all times and in all places derived from the idea of what an ideal man would do and would not of the court and voluntarily submits himself by institution of the suit through
do, would claim and would concede as the claim of others and arrived at by pure reason proper pleadings
Treatise of jurists and writers – they have actually influenced courts and legislatures to adopt 4. Jurisdiction over the Defendant
their views in the resolution of conflict problems • voluntary appearance
NB: the Restatement is not a code that is binding to any state. It only has persuasive value • enters his appearance as defendant UNLESS he makes it clear that the purpose of his
that varies from state to state. appearance is to question the jurisdiction of the court over his person
• personal service, and if he refuses, tendering, of summons
JURISDICTION AND CHOICE OF LAW • substituted service of summons by
C/O: VICTOR RAMOS • leaving copies of the summons in dwelling or residence with someone of suitable age
(Salonga, CHAPTER IV, 1995) or discretion then residing
• leaving copies in defendant’s office or regular place of business with some competent
WAYS OF DISPOSING OF CONFLICTS CASES person in charge
Dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over • summons by publication, 3 instances
the case • action in rem
Assume jurisdiction over the case and apply the internal law of the forum • quasi in rem
Assume jurisdiction over the case and take into account or apply the law of some other State • involves the personal status of the plaintiff
or states NB: Jurisdiction continues throughout all subsequent proceedings which may arise out of the
original cause of action
JUDICIAL JURISDICTION 5. Jurisdiction over the Res (actions in rem, quasi in rem, in personam) –
Jurisdiction – the right of a state (due to sovereignty) to exercise authority over persons jurisdiction over the particular subject matter in controversy, regardless of the
and things within its boundaries, subject to certain exceptions (ie over traveling sovereigns, persons who may be interested therein.
ambassadors and diplomatic representatives, etc) action in rem – purpose of the suit is to affect the interests of all persons in a thing, the state
Judicial jurisdiction – legal authority of a state to exercise authority, through its courts or may render through its courts a valid judgment, as long as it has jurisdiction over the thing
agencies, to hear and adjudicate cases; power of a court or agency to hear and determine an even though it may not have personal jurisdiction over the persons whose interests are
issue upon which its decision is sought affected
Legislative jurisdiction – the power of a state to regulate or control, through rules of law, proceedings quasi in rem – purpose is neither to impose a personal liability or obligation
interests or persons in a thing, event or situation upon anyone, not to affect the interests of all persons in a thing but to affect the interests of
particular persons in a thing
TYPES OF JURISDICTION
1. Jurisdiction over the Subject Matter – the power to hear and determine cases Jurisdiction and the Due Process Clauses
of the general class to which the proceedings in question belong and is conferred proceeding in rem – service of summons by publication is sufficient because the case is
by the sovereign authority which organizes the court and defines its powers enforced against the rest of the world
Jurisdiction conferred to by law, not by consent of the parties or voluntary submission proceeding in personam – personal service of summons or voluntary appearance of the
It is the allegations in the petition or complaint that will invest the court with the power to defendant, by himself or counsel, is required
hear and determine the case proceeding quasi in rem – summons by publication is sufficient
Allegations in the complaint shows a prima facie lack of jurisdiction – dismiss NB: a state does not have jurisdiction in the absence of some reasonable basis for exercising
If on the complaints face, there is a presence of jurisdiction, , proceed with trial. Should it, whether the proceedings are in rem, quasi in rem, or in personam. To be reasonable, the
evidence show lack of jurisdiction, dismiss the case jurisdiction must be based on some minimum contacts that will not offend traditional notions
2. Personal Jurisdiction – competence of a court to render a decision that will bind of fair play and substantial justice
the parties to the suit;
Bases: ANALYSIS OF THE 3 METHODS
Presence, Domicile, Residence, Nationality or Citizenship, Consent, Appearance in an Action, Dismissing the Case; the Principle of Forum Non Conveniens
Doing Business in the State, An Act done in the State, Causing an Effect in the State by an Can the court, authorized by law to take cognizance of a conflicts problem, still refuse to try
Act done Elsewhere, Ownership, Use or Possession of a Thing in the State, Other it?
Relationships to the State which make the Exercise of Judicial Jurisdiction Reasonable The court may invoke the principle of forum non conveniens, for practical purposes eg. belief
that the matter can be better tried and decided elsewhere, either because the main aspect of

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
4
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the case transpired in a foreign jurisdiction, or the material witnesses have residence there, NB: Having these exceptions present, the court may find itself obligated to apply the internal
etc. law
Or it would not entertain the suit if it believes itself to be a serious inconvenient forum,
provided that a more convenient forum is available to plaintiff; 3 factors are considered for APPLICATION OF FOREIGN LAW
“most convenient forum” C/O: MIKE MATE, JANG MORENO, TRINA GARCIA, TRINA ILLARDE
Whether the forum is one to which the parties may conveniently resort (Salonga, CHAPTER V, 1995)
Whether it is in a position to make an intelligent decision as to the law and the facts
Whether it has or is likely to have power to enforce its decision (the principle of WHY APPLY FOREIGN LAW?
effectiveness – judge has no right to pronounce a judgment if it cannot enforce it) The ultimate explanation for the resort to foreign law should be sought in the ends of
justice. Instead of being subjected to the law of the particular state that has the dominant
Application of Internal or Domestic Law interest in a particular act or event, parties will be induced to shop for a forum whose
The court is to take cognizance of the case and apply domestic law internal law favors their own interests, thereby encouraging evasion and frustrating the goals
The only EXCEPTION: a foreign sovereign, diplomatic official, or public vessel or property of of predictability and uniformity of result on the other.
another State is involved, or where a state has, by treaty, accepted limitations upon its
jurisdiction over certain persons or things Theory of Comity
Sub-group 1: Where application of International Law is decreed Led by Hubert and Voets – This theory asserts that the application of foreign legal systems in
Where the land involved in the suit is located in the forum, the lex situs is normally applied cases involving foreign element is proper because their non-application would constitute a
to the case disregard of foreign sovereignty ( a lack of comity towards other States)
Art 80 of the Family Code, in the absence of a contrary stipulation in the marriage Comity is in a legal sense, neither a matter of absolute obligation nor of mere courtesy and
settlement, the property relations of Filipino spouses shall be governed by Philippine laws, goodwill upon the other. It is the recognition which one nation allows within the territory to
regardless of the place of the celebration of the marriage and their residence the legislative, executive or judicial acts of another nation having due regard both to
Subgroup 2: Where there is Failure to Plead and Prove Foreign Law international duty and convenience, and to the rights of its own citizens, or of other persons
• RULE: courts don’t take judicial notice of foreign law. The foreign law so invoked must who are under the protection of its laws
be pleaded and proved, otherwise it is presumed that such foreign law is similar to
Philippine law Criticisms/Fallacies of the Doctrine of Comity:
• Written foreign law, to be proved, may be evidenced by an official publication or a coy It is based on the erroneous idea that a state has a great interest in the application of its
attested by the officer having legal custody of the record and accompanied with a law by other States
certificate that such officer has the custody The application of foreign law does not spring from the desire of the sovereign of one State
• Unwritten foreign law may be proved by oral testimony of expert witnesses or by to show courtesy to the other State whose law is being applied but rather it flows from the
printed and published books of reports of decisions of the country involved, if proved impossibility of otherwise determining whole classes of cases without gross inconvenience
to be commonly admitted in such courts. and injustice to litigants, whether natives or foreigners
• Where a Case involves any of the Exceptions to the Application of Foreign Law If foreign law were to be applied as a matter of option, it would be impossible to build up a
Exceptions: definite body of Rules of Private International Law as conflict of law cases will be resolved by
• The enforcement of the foreign law would run counter to an important public unregulated discretion
policy of the forum
• Where the application of the foreign law would infringe good morality as 2 Interpretations of What Comity Is:
understood in the forum Hilton case: reciprocity was the basis for extending/refusing recognition to foreign judgment
• When the foreign law is penal in nature (like Mike Mate!) Johnson case: the basis was the “persuasiveness of the foreign judgment”
• Where the foreign law is procedural in nature
• When the question involves immovable property in the forum Vested rights theory
• When the foreign law is fiscal or administrative in nature Based on the concept of territoriality under which the court can apply only its own
territorial law. Cannot recognize foreign laws/enforce foreign judgments but it is one of the
• Where the application of foreign law would involve injustice or injury to the citizens
tenets of justice that rights acquired in one country must be recognized and legally protected
or residents of the forum
in others
• Where the application of foreign law would endanger the vital interests of the
The function of CoL is to give effect to rights acquired under the proper foreign law, and not
state
to enforce foreign law
Prof. Beale’s thesis: the location of one single most significant factor in an event/transaction
should identify the State or territorial jurisdiction whose law should govern the transaction
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
5
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
If all courts were to give effect to vested rights, uniformity and predictability of results may it is doubtful whether the process described by cook (that the forum enforces not a foreign
be achieved “ it is not foreign law but the rights acquired under it which are enforced by the right but a right created by its own law) results in the creation of a new right
courts of another country”
Loucks vs. Standard Oil Company of NY case: “ it is a principle of every civilized law that Usual Method in Disposing of CoL Cases:
vested rights be protected” rights acquired follow the person wherever he goes and must be The court characterizes/identifies the legal category into which the case before it falls
respected (property, domestic relations, tort, succession)
Goodrich: No law exists as such except the law of the land (territorial sovereignty) . . . it is Apply the proper connecting factor for that category of case in order to choose the
however a principle of civilized law that rights once vested under the law continue until State/territorial jurisdiction whose legal system will determine the parties’ respective rights,
destroyed or cut off by law, and that rights once vested under the law continue until duties and other legal relations
destroyed or cut-off by law, and that such rights are recognized and enforced in one state
thought come into being in another, unless such enforcement, for good reason, is thought Revolution in US Conflicts Law
contrary to public policy of the jurisdiction where enforcement is sought. The emergence of two themes concerning choice of law
Jurisdiction-selection (e.g. lex loci contractus)
Criticisms/Fallacies of Vested Rights Theory (semantically defective): Requires the court to apply the law of the country/jurisdiction chosen by the conflicts rule,
The obligation to recognize the rights implies the obligation to apply foreign law, the irrespective of the content of the particular rule of law selected
statement is thus merely a play of words when it is said that its not the foreign law but the Rule-selection (Method of solving/approaching a solution to the choice of which of
rights acquired under it which are enforced by the courts competing norms should govern)
Not all rights acquired under foreign law are protected elsewhere nor is their protection Emphasizes a choice between different substantive rules of law in light of the policies at issue
always desirable
The protection of rights and other interests is not the only consideration to be taken into The Second Restatement and the Law of the Most Significant Relationship Theory
account but often, the issue is whether a disability existing under one law should be applied Principles for guidance for judges
by a foreign court Choice of law rules should be designed to make the international and interstate systems
The law protects not only vested rights constituted abroad but often also foreign legal work well
relationships, capacities, or powers out of which rights, or extinction of duties, and charges The court should apply its own local law unless there is good reason for not doing so like
or the invalidity of acts may arise using its own internal law to matters that are not likely to affect the ultimate outcome of the
It’s difficult and impracticable to apply the theory where material aspects of a transaction or case
event touch two or more States equally or almost equally. (What law of what State was the The court should consider the purpose of its relevant local law rule in determining whether
right acquired? Saan galing ang karapatan?) to apply its own law or the law of another State
Choice of law rules should seek to achieve certainty, predictability, and uniformity of result.
Local Law Theory They should be easy to apply
Anzilotti: A foreign rule cannot be applied unless it has been “appropriated” by the State of The court should seek to protect the justified expectations of the parties
the forum and transformed into a domestic rule The court should seek to apply the law of the State of the dominant interest
Wheeler: The court of the forum recognizes and enforces a local right and applies its own The court should seek to further the fundamental policy underlying the particular field of law
rules to the exclusion of all foreign rules but when it is confronted with a CoL case, it does
not really apply the rule that would govern an analogous case purely domestic in character. State Interest Theory
But rather, it does so for social reasons and practical convenience takes into account the Currie led the drive to focus attention on a neglected key to intelligent analysis of conflicts
laws of the foreign country in question it creates its own local right but fashions it as problems. Rejected the rules of choice of law of the traditional type and suggested the ff:
nearly as possible upon the law of the country in which the decisive facts have occurred When a court is asked to apply the law of a foreign State, different from the law of the
By treating foreign law not as law but as a fact and considering it along with other facts and forum, it should inquire into the policies expressed in the respective laws, and into the
giving it whatever significance it deserves in a particular case, the court adopting the theory is circumstances in which it is reasonable for the respective States to assert an interest in the
able to take into account social and economic considerations and the demands of expediency application of those policies thru construction and interpretation
in the case before it If the court finds that one state has an interest in the application of its policy in the
circumstances of the case and the other has none, it should apply the law of the only
Criticisms to the Local Law Theory: interested State (e.g. lex situs rule)
When a judge applies foreign law in a conflicts case, the truth is that he is merely obeying his If the court finds an apparent conflict between the interests of States, it should reconsider
national conflicts rule in applying foreign law but without making it any sense part of his If the forum is disinterested, but an unavoidable conflict exists between the interest of two
national law other States, and the court cannot with justice decline to adjudicate the case, it should apply
the law of the forum at least if the law corresponds with the law of one of the other states
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
6
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Comparative Approach
Criticisms Led by Ernest Rabel, the method brings out the similarities and dissimilarities, examined their
State interests may be legitimate in the field of public international law but in the context of purposes and effects, showed to what extent unification or reconciliation is feasible and
private international law, the court should seek conflict justice and this requires due regard proposes specific solution in the context of the needs and requirements of a growing
to be paid to the interest of the parties in the individual case international community
It assumes a willingness and ability on the part of the judges to identify, evaluate the polices
and interests Convenient Forum Theory
The courts duty is not to give effect to state interest but rather to balance those interests Application of foreign law in such a convenient forum, which implies substantial connection
with a given conflict problem, must be analytically understood as an exception from the basic
Cavers Principles of Preference rule calling for the application of the lex fori
Prof. Cavers set “principles of preference” for the solution of COL problems when analysis However, the state should not hesitate to apply foreign law where legislative or settled
of the purposes underlying the various competing laws indicates that there is a genuine judicial rules of choice of law or the policy of the forums domestic rules require a different
conflict that cannot easily be avoided answer and may actually result in a greater application of the laws of other states
Caver maintains that the choice of law should not be the result of the automatic operation of
a rule or principle of selection but of a search for a just decision The Harmony of Treatment and Uniformity of Result Theory
The selection of governing law ought to be a process of choice between rules of law than a Following the thesis of Savigny, followers of this movement believe that the purpose of COL
choice between jurisdictions and a court choosing between the laws of two States must look is uniformity of result and harmony of treatment
at the content of the laws with reference to the facts in the particular case and with If to every conflict case the court were to apply only the law of the forum, the result of the
reference to the social policies inherent in them as they relate to the facts ( to be discussed suit would depend entirely on where it is instituted. Equal justice under the law requires that
later) the decision be the same wherever the claim is brought
However the quest for uniformity has become more difficult since the international order
Functional Approach envisioned by Savigny has broken up
Aims at solutions that are “the rational elaboration and application of the policies and
purposes underlying specific legal rules and the legal systems as a whole” Salonga’s Proposals: The Application of Foreign Law in the Philippines
Locate the concerned jurisdiction7 They must live with the fact that like a number of countries in Continental Europe we in the
Construct for each concerned jurisdiction a regulating rule that takes account both of Philippines have a few codal and statutory rules that apply to conflicts problems
relevant policies expressed through the jurisdictions domestic rules and of policies peculiar In the absence of an applicable provision in the code or statute the various theories should
to multi-state transactions as distinguished from wholly domestic transactions be examined and weighed as they bear on a given conflicts problem
Many of the true conflicts that remain after these steps can be resolved by applying the rules because of the resulting gaps there’s a wide and desirable latitude for courts and agencies to
of the jurisdiction “predominantly concerned” when one jurisdiction has ultimate effective develop new ways of solving conflicts problems, consistent with the demands of justice, the
control and in cases in which all concerned jurisdiction agree that one has a predominant justified expectations of the parties and the requirements of a world rendered by the
concern modern miracles of technology communication and international trade (Art. 9 and 10 of the
New Civil Code)
Choice Influencing Considerations No single theory contains the whole truth no one approach is completely valid
Espoused by Prof. Leflar, these considerations are useful in resolving choice of law problems,
the ff are the said considerations: ASCERTAINMENT AND PROOF OF FOREIGN LAW
predictability of results C/O: MIKE MATE, JANG MORENO, TRINA GARCIA, TRINA ILLARDE
maintenance of interstate and international order (Salonga, CHAPTER VI, 1995)
simplification of the judicial task
advancement of the forums governmental interests Rules of Substance vs. Rules of Procedure
application of the better rule of law Substance Procedure
Whether one of the competing legal rules, compared with the other domestic rule, serves Methods of presenting to a court, the
the modern requirement of the international order, or whether it is anachronistic in that is operative facts upon which legal relations
behind the times depend
The legal effect of those facts after they
Refers to available judicial machinery and
have been established
its mode of operation
7
Concerned jurisdiction means one that has expressed an interest in regulating an aspect of the multi-state transaction in question Regulates venue form of action, sufficiency
of pleadings
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
7
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
In theory at least, the procedural aspects
are not decisive in that they do not EFFECT OF FAILURE TO PLEAD/PROVE FOREIGN LAW
determine the outcome of the case Dismiss the case with judgment for the defendant
That the plaintiff relying on foreign law had failed to prove an essential part of his case
Forum Applies Its Own Laws Not to dismiss the case, but to hold that where foreign law is not properly pleaded or
Why apply its own procedural law? Practical necessity and simplification of the judicial task proved, the presumption of identity or similarity arises namely that foreign law is the
Foreign Law Limited to Substantive Aspects same as domestic law
Rules for the ascertainment of foreign law are necessarily different from the rules on the not to dismiss the case, but to assume that by failing to plead or prove foreign law, the
determination of Philippine Law parties acquiesced in having their controversy determined by the law of the
Every person is presumed to know local law, not foreign law as ignorance of foreign law is forum
ignorance of a fact not law
Local court takes judicial notice of all local laws but such principle does not apply with Exception: RP court can take judicial notice evidently through its own actual
reference to foreign law knowledge and research whenever it has reason to believe it is familiar with some foreign
law that is generally known or has actually been ruled upon in cases before it
HOW FOREIGN LAW IS ASCERTAINED: A COMPARATIVE STUDY
In continental Europe, it’s the judge’s duty to investigate the foreign law which he is to apply EXCEPTIONS TO APPLICATION OF FOREIGN LAW
and may require assistance from the parties litigant to prove the content of the foreign law. C/O: MIKE MATE, JANG MORENO, TRINA GARCIA, TRINA ILLARDE
The court is not limited to the legal materials brought to his knowledge by the parties as the (Salonga, CHAPTER VII, 1995; CHAPTER VI, 1979)
judge, on his initiative resort to works of reputable authorities
In the Philippines, American and English Law, foreign law is like any fact which must be NATURE AND BASIS OF EXCEPTIONS
pleaded and proved by the party invoking it (this is influenced by the common law) Under the traditional view, foreign law is not applied in the forum in the following cases:
Full faith and credit clause specified the method of proof of the enacted laws or Statutes Where its enforcement would run counter to some important public policy of the forum
Its application would lead to an infringement of good morality in the wider sense of the term
Development of RP Law as understood in the forum
Code of Civil Procedure was patterned after Anglo American models and later became the 1. When foreign law is penal in nature
Rules of Court, Sec. 300 and 301 of the Rules of Court then prescribed method of proving 2. When the foreign law is procedural in nature
foreign law 3. When the question relates to immovable property in the forum
Court cannot take judicial notice of foreign law on the basis of its own knowledge and 4. When the foreign law is fiscal or administrative in nature
private information. The rule however that courts cannot take judicial notice of foreign laws 5. When the application of foreign law would involve injustice or injury to the
was relaxed through an exception -- if courts are evidently familiar with the foreign laws nationals or residents of the forum
(Spanish Civil Code et al) 6. When the application of foreign law would endanger the foreign relations or vital
interests of the state
PROOF OF FOREIGN LAW 7. These exceptions are not mutually exclusive as most overlap each other
The party who claims that the foreign law is applicable to the fact in issue has the burden of
proving the content of foreign law What are the Exceptions Recognized by RP law?
RP laws which restrain or prohibit the doing of certain acts within the country and other
How is foreign law proved? local laws designed to uphold public order etc cannot be displaced by foreign laws or
Written law Unwritten law judgments or by determination or conventions agreed upon
Evidenced by an official publication, a copy The oral testimony of an expert witness is The general rule is that our penal laws are territorial and due to territorial sovereignty—
attested by the officer having legal custody admissible as evidence should apply to all persons and things within our territory. Exceptions are in the limits on
of the record, or his deputy territorial jurisdiction, under Law of Nations, treaties, heads of State, diplomats, foreign
Printed and published books of reports of public vessels, merchant vessels exercising innocent passage and foreign state property
Must be accompanied a certificate that such decisions of the court of the country Examine Art 17 and Article 14 as these impose a duty on our courts to examine the
office has custody (by embassy, consular concerned purposes of our laws in order to determine whether in a conflicts case, a domestic rule of
agent, any foreign service agent) the forum or a rule of another State should be applied in the decision of a particular issue

Other evidence was also allowed such as Savigny: Imperative Rules are of 2 Kinds
testimony of an expert witness Enacted merely for the sake of persons who are the possessor of rights
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
8
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Become inapplicable where according to the rules of priv intl law, a foreign legal system Where application of foreign law would be against good morality in the wider
governs the case. sense of the term as understood in the forum
Not made solely for the benefit of individuals but rest on moral grounds/public interest Good morality or bonos mores. Includes contracts which though valid under their proper law
Intended to be applied in all circumstances and cannot be rendered ineffective by foreign laws would be illegal or immoral if they were governed by the lex fori
and judgments Doctrine of disparitas cultas, consider local concepts of morality as universally established and
In short, the forums public policy or interest, whenever it is clearly at stake in a given applicable in all situations (Article 71 and article 26)
conflicts problem, should take precedence over the application of the laws of other states
Foreign Penal Law
Where enforcement of foreign law is contrary to an important public policy of the When a foreign law sought to be applied is penal, the forum may refuse its application
forum because “no society takes concern in any crime but what is hurtful to itself”. That in the
• Public policy is relative (what may be true now, may be false tomorrow) enforcement of the rules of public order of a State, other states are not concerned and
• Public policy has been identified with the civil law idea of public order however today, should not as a general rule interfere
it means more than just the maintenance of public order and peace Implies that courts will refuse foreign judgments which are penal in nature
• But public policy (manifest will of the state), must be strong or of great importance to But how do you determine if law is penal? When it imposes punishment for an offense
allow refusal to apply foreign law because a mere dissimilarity between foreign law and committed against the state which the executive has power to pardon
local law will not render the enforcement of the foreign law in violation of the forum’s The US supreme court said that a statute is penal if it imposes a duty on the defendant to pay
public policy (e.g. tradition, prevalent conception of good morals) the plaintiff anything more than is necessary to compensate him for out of the pocket losses
2 kinds of Public Policy: caused by the defendant
• One which operates no matter where the event or transaction takes place The view That one State has no concern in the enforcement if penal laws of another state
• Operates only where the event or transaction takes place in the forum and is not has been criticized due to the rise of extradition treaties
offended if the transaction is completed abroad
• What public policy is would not be difficult where the law so clearly worded as to Foreign Procedural Law
govern acts occurring abroad (e.g. Article 818 of the Civil Code, p. 115) Generally not enforced in the forum because it is the forums procedural law that is enforced
for practicality’s sake
• It is in cases where the law or statute contains no definite reference to transactions
It is impractical for one court to wholesale adopt the trial machinery of another state
involving a foreign element that the difficulty arises because courts have to weigh the
including rules on service of process venue etc
requirements of another state as against the desirability of enforcing what is conceived
The forum is charged with the task of making a distinction between the rules that are
to be the local public policy
procedural and those that are substantive
Public policy May be Used by a Court in Different Ways
Questions relating to immovable property in the forum
Refuse to entertain the case because enforcement of the action is against public policy,
Practically all legal systems are in accord on the principle that ownership of an immovable
and dismiss it without prejudice (parties may pursue litigation in another forum)
and other rights in immovables are subject to the lex situs (developed in the Italian doctrine
Entertain the case but apply its own domestic law to decide the controversy in favor of
of the Middle ages)…LEX REI SITAE (the law of the place where the immovable is situated)
the plaintiff (unfair to the defendant who did not choose the forum. The public policy thus is
The rationale is found in the nature of real property — immobility. Immovables are part of
used to defeat a defense that may be available in foreign law
the country and so closely connected with it that all rights over them have their natural
Forum which has sufficient connection with the factual event or transaction may entertain
center of gravity there. (Swank vs. Hufnagle)
the case but invoke its own public policy in order to apply the forums domestic law
Denying recognition to a foreign law because of public policy means that in case and only in
Foreign Fiscal or administrative law
case of strongly conflicting policies should a forum – which has a significant relationship to
Where the foreign law is fiscal or administrative in nature, the forum may refuse its
the occurrence or the parties follow the local public policy than a policy of another state
enforcement (foreign revenue law, tax law, local rates)
Local public policy is superior to foreign law only to the extent that it actually and materially
The reason is that A sovereign has no legal duty to assist foreign governments in the
infringes the forums public policy (polygamous marriage may be void but the children –
financing of their activities
incidents and consequences—should be recognized as successors)
Lord Mansfield: no country takes notice of the revenue laws of another
However it does not mean that a foreign revenue law is to be totally ignored
Dangers of Using Public Policy as An Excuse Not to Apply Foreign Law
Cheshire and North: circumstances may require that the existence of a foreign fiscal law be
May be no more than an intolerable affectation of superior virtue
recognized. Court may give particular importance to the policy of the forum in maintaining
May provide an easy excuse for the forum to apply internal law and defeat the purpose of
harmonious relations with another State and may not countenance any transaction, such as a
this subject
fraudulent tax evasion scheme
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
9
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
The seat of a legal or juridical person, such as a corporation
Where application of foreign law would involve injustice or injury to the residents The situs of a thing, that is, the place where a thing is or is deemed to be situated. In
of the forum particular the lex situs is decisive when real rights are involved
The traditional rule is to the effect that foreign law will not be applied where it would involve The place where an act has been done, the locus actus, such as the place where a contract has
injustice/injury to the people of the forum been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is
Where the application of a foreign law would expose the residents of the forum to a just particularly important in contracts and torts
liability even tradition bound writers admit that the exception would not hold; on the other The place where an act is intended to come into effect e.g. The place of the performance of
hand. Id the enforcement will result in injustice or injury to the forum,, public policy may be contractual duties, or the place where a power of attorney is to be exercised
enough to bar application of foreign law The intention of the contracting parties as to the law that should govern their agreement, the
The lack of emphasis on this exception is that it brings the fear of constant reference to it — lex loci intentionis
which curtails the development of choice of law rules The place where judicial or administrative proceedings are instituted or done. The lex fori –
the law of the forum 0 is particularly important because, as we have seen earlier, matters of
Where application of foreign law would endanger the foreign relations or vital procedure not going to the substance of the claim involved are governed by it; and because
interests of the state the lex fori applies whenever the content of the otherwise applicable foreign law is excluded
A contract raising a loan to further a revolt against a foreign government of a friendly State from application in a given case for the reason that it falls under one of the exceptions to the
though valid by the law of the place where entered into will be declared void in the forum application of foreign law
Many courts consider this particular exception as included in the first exception since it is The flag of a ship, which in many cases is decisive of practically all legal relationships of the
clear that it would also be against public policy ship and of its master or owner as such. It also covers contractual relationships, particularly
contracts of affreightment
NATURE OF CONFLICT RULES AND THE PROBLEM OF
CHARACTERIZATION Arts. 15-17 NCC: are basically territorially-oriented, which raises 2 questions
C/O: VICTOR RAMOS problem of characterization
(Salonga, CHAPTER VIII, 1995) problem of renvoi

THE NATURE OF CONFLICT RULES Problem of Characterization


Classifying legal rules Locus Actus – place of acting
Public International Law Situs rei – place of the thing
Municipal Law
Domestic or internal rules SYSTEM OF PERSONAL LAW & NATIONALITY
Private international law or conflict rules C/O: JULIET AZARRAGA, DINDIN CRUZ, AND ROBERT TEJERO
Difference of ordinary internal rules and conflict rules (Salonga, CHAPTER IX - X, 1995)

Ordinary Internal Rules Conflict Rules IMPORTANCE OF PERSONAL LAW


Authorize, command or prohibit a certain Decide only which law or jurisdiction will Personal allow allows the courts to exercise jurisdiction over the person or determine the
mode of conduct give the final solution to the question governing choice of law rule on the specific situation involving such person.8 His nationality
Examples: Real property as well as personal serves as a permanent connection between the individual and the state. His personal law
Example: Art 796: All persons who are not regulates his civil status and condition, his family rights and duties, the intrinsic validity of his
property is subject to the law of the country
expressly prohibited by law to make a will will and the rights of succession to his properties.9
where it is situated

PARTS OF A CONFLICTS RULE DEFINITION OF NATIONALITY


• Defines its object – factual event or operative facts Nationality refers to membership in a political community. In the Conflict of Laws, the words
• Legal consequence of the operative facts – prescribes the municipal law to which the nationals and citizens are used interchangeably. In the Philippine Political law however, there
question should be referred or connected; essential element: is a distinction between a national and a citizen.10
o Test or connecting factor; or
o Point of contact 8
Jorge Coquia, Conflict of Laws (2000) at 154.
Points of Contact – 9
Jovito Salonga (1979), Private International Law at 96.
May take any of the following forms: 10
Ibid.
Nationality of a person, his domicile, his residence, his place of sojourn or his origin
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
10
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
3. Those born before January 17, 1973 of Filipino mothers, who elect Philippine
Advantages and Disadvantages of Nationality as Personal Law citizenship upon reaching the age of majority;
Nationality was used to establish the requisite link between an individual and the state 4. Those who are naturalized in accordance with law11
because the laws of each state were presumed to be made for an “ascertained population.”
The view was since lawmakers considered the physical and moral qualities of the citizens The Supreme Court held Article 17 of the Civil Code is insufficient to show that the first
wherever they are. Likewise, an individual’s nationality was easily verifiable from documents. paragraph affirms and recognizes jus soli. 12 Citing American jurisprudence, the Court found
However, as a criterion for personal law nationality does not solve problems relating to that the decided weight of authority was to the effect that the marriage of an American
individuals who are stateless as well as those with multiple nationalities. woman with an alien conferred his nationality upon her during coverture; that upon
Neither does it offer any decisive solutions in states with diverse legal systems. dissolution of the marriage by death of the husband, the wife reverted, ipso facto, to her
A person’s ties to his nation may be so attenuated if he has lived in another country for most former status, unless her conduct or acts showed that she elected to retain the nationality of
of his life. It would be unreasonable for his national law to govern him or exact obligations her husband and that where the widowed mother herself thus reacquired her former
form him if he has no shared sense of identity or belonging with the state. nationality, her children she being their natural guardian, should follow her nationality with
the proviso that they may elect for themselves upon reaching majority. The Roa decision,
Importance of Nationality in the Philippines promulgated on October 30, 1912, set a precedent that was uniformly followed in numerous
It is the nationality or citizenship of the individual that regulates his civil status, capacity, cases. The long line of decisions applied the principle of jus soli up to September 16, 1947,
condition, his family rights and duties, laws on succession and capacity to succeed. According when the principle was renounced in the cases of Tan Chong vs Secretary of Labor and Swee
to the Philippine Supreme Court, the nationality law theory is a conflict of laws theory by Sang vs The Commonwealth of the Philippines13 cited in the appealed decision.
virtue of which jurisdiction over the particular subject matter affecting a person such as
status of a natural person, is determined by the latter’s nationality. Naturalized Citizens
Article 15 of the 1987 Philippine Constitution – “Laws relating to family rights and duties or Naturalization confers to an alien a nationality after birth by any of the means provided by
to status, condition and capacity of persons are binding upon citizens of the Philippines even law. 14 The process of Naturalization in the Philippines is by judicial method under
though living abroad.” This is the nationality principle as expressed by the law. Commonwealth Act No. 473 as amended by RA 530.

3 kinds of citizens of the Philippines: QUALIFICATIONS FOR NATURALIZATION


1. Natural-born citizens – Those citizens from birth without having to perform any 1. The petitioner must not be less than 21 years of age on the date of the hearing of
act to acquire or perfect their Philippine citizenship the petition;
2. Naturalized citizens – Those who are not natural born citizens and those who 2. He must have, as a rule, resided in the Philippines for a continuous period of not
become such by virtue of a judicial proceeding less than ten years;
3. Citizens by election – Those who by law, become citizens of the Philippines by 3. He must be of good moral character, and believes in the principles underlying the
electing or choosing Philippine citizenship at the age of 21 or within a reasonable Philippine Constitution, and must have conducted himself in a proper and
time thereafter irreproachable manner during the entire period of his residence in the Philippines
in his relations with the constituted government as well as with the community in
2 theories determine whether the place or ancestry determines citizenship. which he is living xxx.
Jus Soli – Citizenship follows the place of Birth 4. He must own real estate in the Philippines worth not less than P5000, Philippine
Jus Sanguinis – Citizenship follows the citizenship of his parents. currency, or must have some lucrative trade, profession, or lawful occupation.

General Principle – It is the State that has the authority, based on its own municipal law, to However, the minimum ten year period in paragraph (b) may be reduced to five years in any
determine who are its nationals or citizens. of the following cases:
Hague Convention – “It is for the State to determine who its nationals are. This law shall be If the applicant has honorable held office under the Government of the Philippines or under
recognized by other states insofar as it’s is consistent with international convention, any of the provinces, cities, municipalities, or political subdivisions thereof;
international customs and principles of law generally recognized with regard to nationality.” If he has established a new industry or introduced a useful invention in the Philippines;
Article 2 of the Hague Convention also states that questions as to whether a person If he is married to a Filipino woman;
possesses the nationality of a particular state “shall be determined in accordance with the law
of that state.”
Article IV of the1987 Constitution – 11
Edgardo Paras, Philippine Conflict of Laws (1996) at 158.
1. Those who are citizens of the Philippines at the time of the adoption of this 12
92 PHIL. 52 (1952)
13
Constitution; 14
ROA VS. COLLECTOR OF CUSTOMS 23 PHIL. 321.
Dean Honorato Aquino, Conflict of Laws (2000) at 135..
2. Those whose fathers and mothers are citizens of the Philippines;
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
11
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
If he had been engaged as a teacher in a public or recognized private school not established After the publication in the Official Gazette or newspaper of general publication, the
for the exclusive instruction of children of persons of a particular nationality or race in any of petition will be heard (sec 9)
the branches of education or industry for a period of two years; If the petition is approved, there will be a rehearing two years after the promulgation of
If he was born in the Philippines (Sec.3, Com. Act. No. 473, as amended). the judgment awarding naturalization (Sec. 1, Rep. Act No. 530)
The taking of the oath of allegiance to support and defend the Constitution and the laws
Lim vs. Republic 15 – the Supreme Court pronounced that the Naturalization Law requires of the Philippines (Sec 11, Com Act 473, as amended)18
belief in, and not a mere recitation of, the principles of the Constitution.
A requirement for naturalization as provided by Section 2 of the naturalization Law (C.A. Declaration of Intention
473) provides that the applicant must be able to speak and write English or Spanish and One year prior to the filing of his petition for the admission to Philippine citizenship, the
any of the principal Philippine languages. Hence, the law is clear, one should be able to speak applicant for Philippine citizenship shall file with the Office of the Solicitor General a
and write the requisite languages. Thus, an applicant who cannot speak and write but can declaration under oath that it is his bona fide intention to become a citizen of the Philippine
only understand the requisite language does not fit the requirement. A deaf-mute cannot (Section 5, Naturalization Law).
speak; therefore, he cannot be naturalized. The law neither requires speaking and writing of The period of one year is intended to give the state a reasonable time to screen and study
BOTH English and Spanish but English OR Spanish. the qualifications of the applicant. However, even if the same is filed one year prior to the
Another requirement is that the children of the applicant must learn and imbibe the filing of the petition for naturalization, if the filing fee was paid six months prior to the
customs and traditions and ideals of Filipinos to prepare them for a life responsible and law petition for naturalization, the declaration produces no effect.
abiding citizenship. The law is strict as to this requirement in that it must be shown that it
has been followed. Effects on naturalization on wife and children
Legal Background
Disqualifications for Naturalization. Section 15, CA 473 –
The applicant must fully establish that his nation grants reciprocal rights to Filipino citizens at “Any woman is now or may hereafter be married to a citizen of the Philippines, and who
the time of the hearing of his application.16 might be lawfully naturalized shall be deemed a citizen of the Philippines. Minor children of
Section 4 of the Naturalization Law – persons naturalized under this law who have been born in the Philippines shall be considered
The following cannot be naturalized as Philippine citizens: citizens thereof. A foreign-born minor child, if in the Philippines at the time of the
1. Persons opposed to organized government or affiliated with any association or group of naturalization of the parent, shall automatically become a Philippine citizen, and a foreign-
persons who upholds and teach doctrines opposing all organized governments; born minor child, who is not in the Philippines at the time the parent is naturalized, shall be
2. Persons defending or teaching the propriety of violence, personal assault, or deemed a Philippine citizen only during his minority, unless he begins to reside permanently
assassination for the success and predominance of their ideas; in the Philippines when still a minor, in which case, he will continue to be a Philippine citizen
3. Polygamists or believers in the practice of polygamy; even after becoming of age. A child born outside of the Philippines after the naturalization of
4. Persons convicted of crime involving moral turpitude; his parent shall be considered a Philippine citizen, unless within one year after reaching the
5. Persons suffering from mental alienation or incurable contagious diseases; age of majority, he fails to register himself as a Philippine citizen at the American Consulate
6. Persons who, during the period of their residence in the Philippines have not mingles of the country where he resides, and to take the necessary oath of allegiance.”
socially with the Filipinos, or who have not evinced a sincere desire to learn and
embrace the customs, traditions, ideals of the Filipinos; Jurisprudential Development
7. Citizens or subjects of nations with whom the United States and the Philippines are at Vivo vs. Cloribel – “As to foreign born minor children, they are extended citizenship ‘if dwelling
war and in the Philippines at the time of the naturalization of the parent.’ ‘Dwelling’ means lawful
8. Citizens or subjects of a foreign country other than the United States, whose laws do residence. Since prior to the time the father of respondent visitor was supposed to have
not grant Filipinos the right to become naturalized citizens or subject thereof.17 taken his oath of citizenship x x x their lawful period of stay had already expired and they had
already been required to leave, they were no longer lawfully residing here.’
Procedure Therefore:
Commonwealth Act No. 473 – An alien woman married to a Filipino who desires to be a citizen of his country must apply
A declaration of intention to become a citizen must first be filed, unless the applicant is therefore by filing a petition for citizenship reciting that she possesses all the qualifications
exempted from this requirement (Secs 5 and 6, Com. Act. 473) and none of the disqualifications under Section 4, both of Revised Naturalization Law,
The petition for naturalization must then be filed (sec 8) Said petition must be filed in the Court of First Instance where petitioner has resided at least
one year immediately preceding the filing of the petition; and
15
18 SCRA 228 (1966).
16
Jorge Coquia, Conflict of Laws (2000) at 210.
17 18
Commonwealth Act 473 providing for the Revised Naturalization Law. C. A. 473 prescribing the procedure for naturalization.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
12
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Any action by any other office, agency, board or official, administrative or otherwise – other 5. By having been declared by competent authority a deserter of the Philippine Armed
than the judgment of a competent court of justice – certifying or declaring that an alien wife Forces in time of war, unless subsequently, a plenary pardon pr amnesty has been
of the Filipino citizen is also a Filipino citizen is hereby declared null and void. granted
6. In case of a woman, upon her marriage to a foreigner, if by virtue of the laws in
If the wife has all the qualifications and none of the disqualifications for Philippine citizenship force in her husband’s country, she acquires his nationality
she becomes a Filipino, Provided, that she is able to prove these facts in a proper 7. By cancellation of the certificate of naturalization
proceedings. If she lacks qualifications or possesses disqualifications, she cannot be
considered a Filipino citizen. Section 18 of the Naturalization Law (CA 473 as amended) provides that upon motion made
While it is true that under Section 15 of the Naturalization Law, “Any woman who is now or in the proper proceedings by the Solicitor General, the Judge may cancel that naturalization
may hereafter be married to a citizen of the Philippines . . . shall be deemed a citizen of the certificate issued and its registration in the Civil Registry for any of the following reasons:
Philippines, still the law requires that she “might herself be lawfully naturalized” implying that If it is shown that the said naturalization certificate was obtained fraudulently or illegally;
she must first prove that she has all the qualifications and none of the disqualifications. If the person naturalized shall, within the five years next following the issuance of said
• Moy Ya Lim Yao vs Com of Immigration,19 – The Court reversed that ruling and held that naturalization certificate, return to his native country or to some foreign country and
under Section 15 of Com. Act No. 473 or the Revised Naturalization Law, an alien establish his permanent residence therein;
marrying a Filipino, native born or naturalized, becomes ipso facto a Filipino provided Provided, that the fact of the person naturalized remaining for more than one year in his
that she is not disqualified to be a citizen of the Philippines under Section 4 of the same native country or the country of his former nationality, or two years in any country, shall be
law. Moreover, an alien woman married to an alien who is subsequently naturalized considered as prima facie evidence of his intention of taking up his permanent residence in
here follows the Philippine citizenship of her husband the moment she takes his oath as the same;
a Filipino citizen, provided that she does not suffer from any of the disqualification If the petition was made on an invalid declaration of intention;
under said Section 4. This decision in effect ruled that it is not necessary for an alien If it is shown that the minor children of the person naturalized failed to graduate from public
citizen to prove in a judicial proceeding that she possesses all the qualifications and or private schools, where Philippine history, government and civics are taught or prescribed
none of the disqualifications. as part of the school curriculum, through the fault of their parents either by neglecting to
support them or by transferring them to another school or schools. A certified copy of the
Judicial Declaration decree canceling the naturalization certificate shall be forwarded by the Clerk of Court to
A declaration of Philippine citizenship may not be granted in an action for declaratory relief. the Office of the President and the Office of Solicitor General;
The summary procedure under Article 412 of the Civil Code for correction of error in If it is shown that the naturalized citizen has allowed himself to be used as a dummy in
the entry in the Civil Registry which might also change the citizenship or status of an violation of the Constitution or legal provisions requiring Philippine citizenship as a requisite
individual was also disallowed. This rule, however, had been relaxed in later Philippine for exercise, use or enjoyment of a right, franchise, or privilege.
Supreme Court decisions. A petition for correction of errors in the entry of the Civil A judgment directing the issuance of certificate of naturalization is a mere grant of political
Registry even for a change of citizenship or status may be granted provided that an privilege, and that neither estoppel nor res judicata may be invoked to bar the state from
appropriate action is made wherein all parties who may be affected by the entries are initiating an action for the cancellation or nullification of the certificate of naturalization thus
notified and represented and there is a full blown adversary proceeding.20 issued.
If it is shown that the naturalization certificate was obtained fraudulently or illegally, the
Loss of Philippine Citizenship certificate may be cancelled. The decision in a naturalization case does not become res
Commonwealth Act No. 63, as amended by RA 106 – judicata.
1. By naturalization in foreign countries.
2. By express renunciation of citizenship Problems in Applying the Nationality Principle
3. By subscribing to an oath of allegiance to support the constitution or laws of a Dual or multiple citizenship
foreign country upon attaining twenty one years of age or more, subject to certain In view of the rule set in the Hague Convention on Conflict of National Laws, each state
exceptions determines who its own nationals are. Any question as to whether or not a person possesses
4. By rendering service to, or accepting commission in, the armed forces of a foreign the nationality of a particular state shall be determined in accordance with the state’s internal
country, subject to certain exceptions law. Hence it is possible that an individual can be claimed as a national of two or more states.
Application of the jus soli and jus sanguinis –
A child born of parents who are nationals of a country applying the principle of jus sanguinis,
in a country applying the jus soli principle has dual nationality. Thus: A Filipino citizen who
marries an alien may acquire the citizenship of his or her spouse if the spouse’s national law
19

20
41 SCRA 292 (1971) so allows. A Filipino citizen however, who marries an alien shall retain Philippine citizenship,
Jorge Coquia, Conflict of Laws (2000) at 162.
unless by his or her act or omission, he is deemed under the law, to have renounced it by
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
13
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
taking an oath of allegiance to the spouse’s country or by express renunciation. Another It fixes the jurisdiction of the taxing authorities. It also determines where a person may
instance of dual or multiple nationalities is the case of an individual who is naturalized citizen exercise the privilege of voting and other legal rights and privileges. Article 50 of the Civil
of another state but has not effectively renounced his former nationality. Code provides that for the exercise of civil rights and the fulfillment of civil obligations, the
In the determination of the rights of an individual who may claim multiple nationalities in the domicile of natural persons is the place of their habitual residence.
third state, the International Court of Justice applied the principle of “effective Under the domiciliary theory, a person’s private rights, conditions, and status, and capacity
nationality.” are determined by his physical location. 25 In jurisdictions adhering to domiciliary rule of
• Aznar vs Comelec 21 – The statement in the 1987 Philippine Constitution that “dual determining the personal law of a person, domicile is an important point of contact. Domicile
allegiance of citizens is inimical to the national interest and shall be dealt with by is one of the test factors in determining the applicable law in actions involving conflict of
law” has no retroactive effect. And while it is true that even before the 1987 laws26. While the Philippines follows the nationality rule with respect to citizen’s status,
Constitution, our country had already frowned upon the concept of dual citizenship or family rights, and duties, order of succession and amount of successional rights, there are
allegiance, the fact is it actually existed. Be it noted further that under the aforecited certain matters in which our courts apply the domiciliary rule. They are provided in the
proviso, the effect of such dual citizenship or allegiance shall be dealt with by a future following provisions of law and authorities.
law. Said law has not yet been enacted. (NOT ANYMORE) Article 816 of the Civil Code provides that the will of an alien who is abroad produces the
effect in the Philippines if made with the formalities prescribed by the law of the place in
Statelessness which he resides, or according to the formalities observed in his country, or in conformity
It refers to an individual who has been stripped of his nationality by his own former with those which the Civil Code prescribes.27
government without having an opportunity to acquire another. Article 828 of the Civil Code provides that the revocation of a will done outside the country,
A person may become stateless by any of the following means: by a person who does not have his domicile in this country, is valid when it is done according
1. He may have been deprived of his citizenship for any cause; to the law of the place in which the testator had his domicile at the time.28
2. He may have renounced his nationality by certain acts, express or implied; The validity of divorce secured by a foreign spouse under Article 26 of the Family Code also
3. He may have voluntarily asked for a release from his original state; depends upon his domicile acquired in good faith.29
4. He may have been born in a country which recognizes only the principle of jus
sanguinis ---- or citizenship by blood, of parents whose law recognizes only the Classification of Domicile
principle of jus soli --- citizenship by birth in a certain place. Thus he is neither a There are 3 kinds of domicile: namely:
citizen of the country of his parents.22 domicile of origin,
However, The Hague Conference of 1928 on International Private Law suggested that domicile of choice, and
personal law of stateless individuals shall be the law of the domicile or the law of the place of constructive domicile.
temporary residence.
Domicile of origin is received by a person at birth.30 It is the domicile of the person’s parents
DOMICILE at the time of his birth, which is not easily lost, and it continues until, upon reaching the age
C/O: JULIET AZARRAGA, DINDIN CRUZ, AND ROBERT TEJERO of majority, he abandons it and acquires a new domicile. This new domicile is the domicile of
(Salonga, CHAPTER XI, 1995) choice.31

DEFINITION Domicile of choice is also called voluntary domicile.32 It is the place freely chosen by a person
Domicile is defined as that place where a man has his true, fixed and permanent home and sui juris. To acquire a domicile of choice, there must be of the fact of physical presence in the
principal establishment.23 new locality and the unqualified intention to make that place the home of that person.33
It is that place which, whenever he is absent, he has the intention of returning. In the
Philippines, it has been defined as the place where a person, actually or constructively, has his Constructive domicile is also known as domicile by operation of law.34 It is that which the law
permanent home, where he, no matter where he may be found at any given time, eventually attributes to a person because of his disability to make a choice, such as when he is a minor
intends to return.24 A person may have his domicile at one place but may reside at some
other place. Also, a person may also have several residences but only one domicile. 25
Jorge Coquia, Conflict of Laws [1995] at 176.
26
Ruben Agpalo, Conflict of Laws [2004] at 108, cng Saudi Arabian Airlines v. Court of Appeals, 247 SCRA 469, 490 [1998].
27
Agpalo at 108.
Importance of the Concept of Domicile 28
Agpalo at 109.
29
Agpalo at 109.
30
Coquia, p 198.
21 31
Ibid. Jovito Salonga, Private International Law [1979] at 163.
22 32
Jovito Salonga, Private International Law (1976) at 109 Coquia at 198.
23 33
Black’s Law Dictionary Salonga at 173.
24 34
Aquino v. Comelec, 248 SCRA 400 [1995] Agpalo at 110.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
14
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
or suffers from mental of physical disability, in which case he follows, as a rule, the domicile domicile is changed, the child’s domicile necessarily follows. A minor, as a rule, cannot
of his father.35 It is the domicile assigned by operation of law to persons legally incapable of acquire his own domicile.39
choosing their own domicile. These include minors and infants, mentally and physically The rule in many jurisdictions is that the minors take the domicile of their mother upon the
disabled persons, and married women.36 death of their father. This rule applies to our jurisdiction by force of our rules on parental
authority. Article 212 of the Family Code provides that the remarriage of the surviving
Domicile of origin and domicile of choice distinguished: parents shall not affect their parental authority over their children.40
In terms of nature or character, the domicile of origin enjoys the staunchest presumption
in favor of its continuance. Compared to domicile of choice, its character is more stable, its Persons mentally disordered
hold stronger and less easily shaken off. Together with infants and married women, person mentally disordered are deemed, by law,
In terms of the conditions necessary for its abandonment, the domicile of origin is not lost dependent persons. Their domicile is fixed to one which they have previously acquired, if
by mere abandonment and remains until replaced by a domicile of choice. On the other there is any. In the absence of a previously acquired domicile of choice, the domicile of
hand, since domicile of choice is acquired upon the concurrence of animo et facto, it is mentally deficient persons follows that of their parents with whom they live. This is justified
deemed extinguished upon removal of intent even prior to the acquisition of a new domicile. because of the person’s perceived incompetence to make a free choice on where they want
In terms of capacity for revival, it is presumed that the domicile of origin is revived once to establish a permanent abode.41
the domicile of choice is extinguished in the interregnum that a domicile has yet to be
established. This is a consequence of the basic rule that no person shall be without domicile. Married women
Based on the concept of unity of the spouses and reinforced by gender-based presumptions
PROBLEMS WITH DOMICILE that this identity is determined by the husband, the wife was presumed to take the domicile
The revival of the domicile of origin is known as the reverter doctrine. This doctrine is subject of her husband.42
to number of criticisms. One such objection is that it violates the rule that a person retains Article 69 of the Family Code provides that the husband and wife shall fix the family domicile
his domicile until a new domicile of choice is established upon the concurrence of the fact and in case of disagreement, the court shall decide. The court may exempt one spouse from
and intention. In an American case, the Iowa court declared that there was neither good living with the other if the latter should live abroad or there are other valid and compelling
logic nor substantial reason for the application of an exception to that rule. But the reverter reasons for the exemption. Although it is unusual for Filipino couples to fix their domicile by
doctrine was applied where the person, whose domicile is in question, was en route to his agreement, if they so desire and could not agree to a common domicile, they can submit the
domicile of origin. matter to court for relief. The court may then decide to allow the wife to maintain a
In establishing domicile of choice, the problem of the degree of permanence of abode separate domicile to that of her husband.43
has always arisen. For this reason, there is an increasing approval for stating this intention in In the case of Romualdez-Marcos v. Comelec, the Court elaborated the legal repercussions of
a negative way. As long as there is no intention to return to the old domicile, a new domicile this rule. When there is no agreement as to a common domicile between the husband and
is created, whether the intention to remain is for the rest of one’s life, or for an indefinite the wife, the rule is that the wife follows that of the husband during the existence of the
period of time, or for the time being at least. Likewise, the amount of time the person has marriage or until the death of the husband. When a woman marries and follows the domicile
actually lived in the new domicile is irrelevant after it is established that a new domicile has of her husband, she keeps her domicile of origin and merely gains a new home. The
been chosen and entered upon. implication of this ruling is that the termination of the marriage or the death of her husband
Also in establishing domicile of choice, the motive that prompted the person to change his operates to revert her domicile to her domicile of origin. But this reversion does not apply
domicile is irrelevant in determining whether or not a new domicile has been acquired. Once when, by her overt acts, she has chosen the domicile of her husband as her domicile of
proved that a person really intended to establish his permanent abode in the new place, the choice.44
court will not anymore inquire into the ethical values of the motives. Motive is relevant only
to gauge if there was genuine intention to acquire the new domicile.37 RULES ON DOMICILE
Infants and minors No person shall be without domicile. Hence, a person’s domicile of origin prevails until
Without doubt, infants are incapable of choosing their own domicile; hence, they retain their he acquires a new domicile.45
domicile of origin. The legitimate child’s domicile of origin is that of his father and an A person cannot have two simultaneous domiciles. Domicile establishes a connection
illegitimate child‘s is that of his mother. The mere accident of birth at any particular place, between a person and a particular territorial unit. That person is bound by the legal system
other than in the place of domicile of the father, cannot affect the domicile. 38 But their
domicile automatically changes when the father’s domicile changes. Whenever parental 39
Coquia at 205.
40
Coquia at 205.
41
Agpalo at 117.
35 42
Coquia at 205. Coquia at 208.
36 43
Salonga at 163, 164 Agpalo at 116.
37 44
Coquia at 198, 199. 248 SCRA 300 [1995]
38 45
Agpalo at 117. Salonga at 160.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
15
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
of that particular territory for some legal purposes. In practice, however, courts have varying applied to a domestic case that has no conflict-of-laws complications. Hence, the forum court
notions of domicile and may attribute these meanings for different purposes. As a result, one in applying the internal law rejects the renvoi.53
may be considered a domiciliary of the state for the purpose of obtaining divorce, but not for 2. Acceptance of the renvoi
the purpose of running for public office. Therefore, it is more accurate to say that a person By applying or accepting renvoi, reference is made not just to another State’s internal law but
can have only one domicile for a given purpose or a given time under the law of a particular to the whole law, which includes choice-of-law rules applicable to multi-state and
state. But it should not be assumed that this determination will be binding on other states or multinational problems. Thus the court will recognize the referral and apply local law.54
on the same state for other purposes.46 • Aznar v. Garcia – Since the deceased in that case left a will, the law that governs its
Every natural person, as long as he is free and sui juris, may change his domicile at validity is Article 16 of the Civil Code. This provision states, inter alia, that the intrinsic
pleasure. But the burden of proving domicile is upon whoever alleges that a change has validity of the testamentary provisions shall be regulated by the national law of the
been secured. Without overwhelming evidence to show a change of domicile, the courts will deceased. The deceased was a citizen of the United States and of the State of California.
decide in favor of the continuance of the existing domicile.47 The application therefore of the Civil Code provision requires the determination of the
To acquire a fresh domicile, residence and intention must concur; to retain an existing meaning of the term “national law”. The law of California applies in this case; its internal
domicile, either residence there or intention to remain must be present; to abandon a law determines the validity of the testamentary provisions. Article 946 of the Civil Code
domicile, residence in a new place and intention to abandon the old place must concur.48 of California, which is the choice-of-law rule of the State of California on the matter,
provides that the question should be referred back to the law of the decedent’s
RENVOI domicile, which is Philippine law. Philippine law, under Article 887(4) and 894, makes
C/O: JULIET AZARRAGA, DINDIN CRUZ, AND ROBERT TEJERO acknowledged natural children compulsory heirs. In other words, the executor asked
(Salonga, CHAPTER XII, 1995) the Court to apply the internal law of California, without regard to the applicable
choice-of-law provision. The acknowledged natural child would like the Court to apply
DEFINITION the choice of law provision on the matter of California, which referred the case back to
• Black states that the “doctrine of renvoi” is a doctrine under which the court in Philippine law.
resorting to foreign law adopts rules of foreign law as to conflicts laws, The Court accepted and applied the doctrine of renvoi. It made reference not just to the
which rules may in turn refer the court back to the law of the forum.49 internal law of California but to its whole law, including the choice-of-law rules. Since
• It is a doctrine whereby a jural matter is presented which the conflict of laws rules of the choice-of-law rules referred the case back to Philippine law, the Court held that the
the forum refer to a foreign law, the laws rule of which, in turn, refers the matter back Philippine court can not and should not refer the case back to California because such
to the law of the forum or a third state.50 When reference is made back to the issue would leave the issue incapable of determination. It cannot be tossed back and
law of the forum, this is known as remission; reference to a third state is forth between the two states, between the country of which the decedent was a citizen
known as transmission.51 (California) and the country of his domicile (Philippines).
• This doctrine is not accepted in many jurisdictions, but it has been employed situations • If the Court rejected the renvoi, the national law of the deceased, which was California
where the domiciliary and nationality principles are applied to the same individual, in law, would have been applied. Instead, the Court applied the doctrine of renvoi and thus
testate or intestate succession, for real property disputes and marriage issues. administered justice to the acknowledged natural child of the deceased by granting them
the devise in accord with law.55
VARIOUS WAYS OF TREATING RENVOI PROBLEM 3. Mutual desistment theory (shouldn’t this be desistance? Of well, our authors . . .)
Professor Griswold identifies 4 ways of treating a problem of renvoi.52 or Mutual disclaimer of jurisdiction theory
1. Rejection of the renvoi • The third way of dealing with the problem of renvoi is desistment or mutual disclaimer
When the conflict rules of the forum court refer the case to the law of another state, it is of jurisdiction. The reason for desistance is that the forum court upon reference to
deemed to mean only the internal law of that state. The internal law is that which would be another state’s law sees that such law is limited in application to its own national and has
no provision for application to a non-national.
• The forum-court upon reference to another state’s law sees that such law is limited in
46
application to its own nationals domiciled in its territory and has no provision for
Coquia at 190.
47
Salonga at 162, 163. application to nationals domiciled outside the territory. Hence, the local court will apply
48

48
Coquia at 190. Black’s Law Dictionary local law. 56
Aquino v. Comelec, 248 SCRA 400 [1995]
48
Jorge Coquia, Conflict of Laws [1995] at 176.
48
Ruben Agpalo, Conflict of Laws [2004] at 108, cng Saudi Arabian Airlines v. Court of Appeals, 247 SCRA 469, 490 [1998].
48
Coquia, p 198, citing Goodrich (3rd ed), supra note 2, at 824.
49 53
Black’s Law Dictionary Salonga at 185.
50 54
Coquia at 122. Salonga at 185.
51 55
Salonga at 187. 117 Phil 106 [1963].
52 56
Coquia at 123. Salonga at 185, 186.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
16
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• This theory has the same result as the acceptance of the renvoi doctrine but the • In answer to this criticisms, Professor Griswold underscores that even Professor
process used by the court of the forum is to desist applying the foreign law. Hence, in Lorenzen, who concluded that the introduction of the renvoi was most unfortunate
the Aznar case, Philippine law would be applied. because of its uncertainty and demoralizing effects, allowed for certain exceptional
4. Foreign court theory cases for reasons of necessity or expediency. Clearly therefore, the doctrine of renvoi,
• According to this theory, the local court would assume the same position the foreign although selective, furthers the objectives of predictability and harmony.59
court would take were the case litigated in that foreign country. Thus, if American
court applies American law, Philippine judge should also apply American law. If the False Conflicts
American judge decides the same in accordance with the Philippine law on succession, If the choice-of law rules of the state to which reference is made refers the case back to the
the Philippine judge will do the same and apply Philippine law. forum state, the court may use this situation to determine whether or not there is merely a
• A problem however arises if both courts follow the same theory. In this case, there false conflict. In the case of Pfau v. Trent Aluminum,60 the New Jersey Supreme Court stated
would be no end to the case as the courts would be tossing the law back to each that since Connecticut and New Jersey have identical substantive laws and the third
other, for this reason, some commentators have coined such terms as “pingpong”, concerned state, Iowa, had no interest in ensuring that its law applied, there was a false
“revolving doors”, “a game of lawn tennis”, “a logical cabinet of mirrors”, and “circulus conflict. Thus, the renvoi was inappropriate.61
inextrabilis” to describe this theory.57
• In re Ross – PERSONAL STATUS & CAPACITY
• The testatrix, a British national, domiciled in Italy, disposed of her property by will, C/O: JULIET AZARRAGA, DINDIN CRUZ, AND ROBERT TEJERO
which excluded her son as heir. This is allowed under English internal law, but not (Salonga, CHAPTER XIII, 1995)
under Italian internal law, which mandates that half of the property should go to the
son as forced heir. The testatrix left land in Italy and movables in England. The English DEFINITION
court ruled that with respect to movables, the claim of the son to the legitime must be • Beale defined status as “a personal quality or relationship, not temporary in its nature
determined by the law of the domicile or Italian law, which meant either one of two nor terminable at the mere will of the parties, with which third persons and the state
things: Italian internal law or the entire Italian law, including choice-of-law rules. As an are concerned.62 He further points out that it is a real institution of law, and in spite of
Italian court would have applied English law, English court should do the same. Hence, its incorporeal and conceptual character is an item in the development of law and in its
testamentary provision excluding the son was held to be valid. application by the courts. It is a creature of the law, and in that sense unreal and
• As to the land, English choice-of-law rules provides that succession should be governed artificial, but it rests upon a factual basis of character or relation. It was created out of
by the law of the situs. But under Italian law, this matter should be governed by the law necessity to deal with and attach rights to certain facts of social importance.63
of the nationality of the testator or English law. As an Italian court would have applied • People vs. Bellamas64 – the general term that includes both condition and capacity, and
the internal law of England, the English court should do the same. The testamentary more specifically that which embraces such matters as the beginning and end of human
provision excluding the son was likewise held valid.58 personality, capacity to have rights in general, capacity to engage in legal transactions,
protection of legal interests, and family relations.
OBJECTIONS TO RENVOI • The state’s concern in a status as defined is based upon its social interest in the
• Opponents of the doctrine of renvoi advocate that the universal application of the personality of its “domiciliaries”, and its interest in such of their domestic relations as
doctrine would place the court in a perpetually enclosed circle from which it would have to do with the procreation and nurture of citizens. Its concern is demonstrated by
never emerge and that it would never find a suitable body of substantive rules to apply
to a particular case.
• Proponents of the doctrine point out that the objection is based on a false premise
because for as long as remission is to the state’s internal law alone, there will be a stop 59
Coquia at 137.
to the endless chain of reference which inn fact, is an extremely rare apparition. 60
55 NJ 511 [1970]
• Moreover, opponents of the doctrine also observed that it cannot achieve uniformity 61

61
Coquia at 137, 138. Black’s Law Dictionary
Aquino v. Comelec, 248 SCRA 400 [1995]
of results if both the forum and the foreign state it refers to applies it the same way. 61
Jorge Coquia, Conflict of Laws [1995] at 176.
The doctrine is workable only if one of the states rejects it and that it achieves 61

61
Ruben Agpalo, Conflict of Laws [2004] at 108, cng Saudi Arabian Airlines v. Court of Appeals, 247 SCRA 469, 490 [1998].
Coquia at 198, citing Goodrich (3rd ed), supra note 2, at 824.
harmony of decisions only if the states concerned do not agree on applying it the same Black’s Law Dictionary
way. 61

61
Aquino v. Comelec, 248 SCRA 400 [1995]
Jorge Coquia, Conflict of Laws [1995] at 176.
61
Ruben Agpalo, Conflict of Laws [2004] at 108, cng Saudi Arabian Airlines v. Court of Appeals, 247 SCRA 469, 490 [1998].
61
Coquia at 198, citing Goodrich (3rd ed), supra note 2, at 824.
62
Joseph S. Beale, A Treatise on the Conflic of Laws, Vol. 2. (1935) at 649.
57 63
Coquia at 127. Ibid.
58 64
99 LJ Ch. 67 [1930]. 73 O.G. 1977.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
17
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the care with which the relationships are created and guarded by the law. The laws of the United States, which sanction divorce … the contract of services … is not
establishment of status is a socially important element of legal order.65 contrary to law, morals, good customs, public order or policy.”
• However, if a status is created by the law of one state which is not regarded as a status • It is a basic principle that status, once established by the personal law of the party, is
by the law of another state, no effect will be given to the status as such in the second given universal recognition. Therefore, aliens can sue and be sued in our courts
state.66 For instance, there are several personal conditions or relationships regarded as subject to Philippine procedural law even on matters relating to their status and
status by civil law, but not by common law, such as minority, prodigality and civil death. capacity. However, the law to be applied by Philippine courts in determining their
In such cases, no effect is given in a common-law state to such a status, unless a statute capacity and status is their personal law.
provides otherwise. • Barnuevo vs. Fuster 71 – The authority of jurisdictional power of courts to decree a
divorce is not comprised within the personal status of the husband and wife, simply
2 Kinds of Legal Status because the whole theory of statutes and of the rights which belong to everyone does
Beale: absolute and relative status; but also divided into domestic and non-domestic. not go beyond the sphere of private law, and the authority and jurisdiction
1. Absolute status is the “personal condition of an individual or a group of individuals which of the courts are not a matter of the private law of persons, but of the
has legal characteristics and status.”67 Examples68 are the following: public or political law of the nation. The jurisdiction of the courts and other
• Personality. questions relating to procedure are considered to be part of a public nature and
• Name. consequently are generally submitted to the territorial principle… All persons that
• Rank, Title, and Office. have to demand justice in a case in which foreigners intervene, since they can gain
• Absence. nothing by a simple declaration, should endeavor to apply the tribunals of
• Civil Death. the state which have coercive means (property situated in the territory) to
• Infamy. enforce any decision they may render. Otherwise, one would expose himself to
• Prodigality. the suit to making useless expenditures which, although he won his case, would not
contribute to secure his rights because of the lack of means to enforce them … In
• Slavery.
order to foster their relations and develop their commerce, all civilized nations are
• Capacity. (not considered as status at common law)
interested in doing justice, not alone to their own people, but to those foreigners who
• Majority. contract within the country or outside of it juridical ties which in some manner affect
2. Relative status is defined as a relation between two persons having such legal sanction as their sovereignty.
to make it a relation falling within the term “status”. Under the category of domestic
• One essential thing to consider within the concept of personal status is the
relations, examples are marriage, relationship of father and child (i.e. legitimation,
determination of the exact moment personality begins and ends. Such
custodianship, and adoption), and the relationship of guardian and ward (i.e.
determination is dependent upon the individual’s personal law.
guardianship). Non-domestic relations, on the other hand, include the relationship
• In the Philippines, Articles 40 and 41 of the New Civil Code give the internal rules on
between jailer and prisoner, among many others.69
the beginning of human personality.
STATUS APPLIED IN THE PHILIPPINE SETTING • 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
• Article 15 of the Civil Code provides that in determining the status and capacity of a
conditions specified in the following article.
person, the nationality principle applies, i.e. the person follows his national law
wherever he goes, but only to Filipino Nationals. For aliens, Philippine courts may refer • Article 41. For civil purposes, the fetus is considered born if it is alive at the time it is
to the national law if the country they belong to follows the nationality principle or the completely delivered from the mother’s womb. However, if the fetus had an intra-
law of their domicile if they follow the domiciliary principle. uterine life of less than seven months, it is deemed born if it dies within twenty-four
hours after its complete delivery from the maternal womb.
• Recto vs. Harden70 – “inasmuch as Mr. and Mrs. Harden are admittedly citizens of the
United States, their status and dissolution thereof – as governed by Article 9 of the • Limjoco vs. Intestate Estate of Fragante72 – With regards to absence, the domestic laws of
Civil Code of Spain (which was in force in the Philippines at the time of the execution different countries do not treat absentees alike which has given rise to difficult
of the contract in question) and Article 15 of the Civil Code of the Philippines – by the problems in conflict of laws. There are 3 suggested ways of dealing with the said
problem:
o to use the rebuttable presumption that a person is dead when he has
been absent for a number of years;
65
Joseph S. Beale, A Treatise on the Conflic of Laws, Vol. 2. Baker, Voorhis & Co. (1935) at 651.
66
Ibid.
67
Ibid at 649.
68
Ibid at 652 to 663.
69 71
Beale, Joseph S. A Treatise on the Conflic of Laws, Vol. 2. Baker, Voorhis & Co. (1935) at 663. 29 Phil. 606 (1919).
70 72
100 Phil. 427 (1959). 80 Phil. 776 (1948).

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
18
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
o to invoke that a person’s unexplained absence is judicially investigated on the individual.83 The conclusion of such rule is that the incapacities attached to his
and established which results in legal effects similar to those of death; legal status follow him wherever he is. Corollary to this is the presumption that those
and, who contract with another must first ascertain his legal capacity. This general rule is
o to obtain a judicial decree declaring the person dead before legal effects subject to some exceptions, one of which is one’s liability in tort cases, which is subject
of death take place.73 to the law of the place of the tort.
• The New Civil Code of the Philippines follows the first method, and the said law • General Rule – Incapacity in one state does not affect one’s capacity in another state.
provides Art. 390 – after the absence of 7 years, and for the purposes of opening his This is best exemplified by the maxim lex loci contractus, which states that the capacity
succession till after 10 years and Art. 391 – presumption of death for all purposes, to enter into a contract is governed by the law of the place of contracting without
including the division of the estate among the heirs. reference to the law of the domicile.84
• The legal effects of absence and restrictions on the absentee’s capacity to act are
determined by his personal law.74 MARRIAGE
• Beale – the determination of one’s name is not a problem of status since a person is C/O: FRANCO SARMIENTO, KRISTINE TRINIDAD, FRITZZIE ESPANOL, AND MIMI
traditionally free to assume a name and change it at will.75 LAMA (Salonga, CHAPTER XIV, 1995)
• However, the prevalent view as of present is that a person’s name is determined by
law and cannot be changed without judicial intervention. For example, Article 376 of MARRIAGE AS INCIDENTAL QUESTION
the New Civil Code provides that no person can change his name or surname without Marriage, as a subject matter in the field of private international law, is the incidental
judicial authority.76 As for aliens, the validity of their change of name depends solely on question. Incidental in this sense does not mean “minor” or “supplementary”. Marriage is an
their personal law.77 incidental question in the resolution of legal issues because its effect substantially influences
• Determining the age of majority is also an aspect of personal status, more particularly the verdict. In deciding whether or not one may lawfully exercise particular acts (e.g.
the legal disability attached to minority and the rights recognized upon attainment of purchase or dispose of property), the fact that said person is married is a matter which needs
the age of majority. In such a case, it is the individual’s personal law which determines to be resolved before deciding the principal issue. In this sense, the validity or lack thereof, of
whether or not he has reached the age of majority.78 Upon reaching such age, parental a marriage is an incidental question that is necessary question that requires an answer before
authority over the person and property of the child ceases and is thereafter qualified resolving the “bigger” case.
and responsible for all acts of civil life,79 except those otherwise provided by special
laws. Definition of Terms
• In the Philippines, Republic Act No. 680980 lowered the age of majority to 18 years • Lex Domicili - Latin for “law of the domicile” in the Conflicts of Law; In conflicts, the
from 21 years. However, the same law provides that parental consent for contracting law of one’s domicile is applied in choice of law questions
marriage is required until the age of 21.
• Lex Locii Celebrationis- the law of the place where the act was done; In conflicts, the
DEFINITION OF CAPACITY law where the place where the act was done is applied in choice of law questions
• “Capacity”, more commonly referred to as juridical capacity, is defined as the fitness of a
person to be subject of legal relations. The other component of capacity, called capacity • Lex Patriae - National Law; In conflicts, the national law of one person is applied in
to act, is defined as the power to do acts with juridical effects. The union of these two choice of law questions
components produces complete civil capacity. The distinction between the two
elements is that the former “is inherent in every natural persona and is lost through • Marriage - a special contract of permanent union between a man and a woman
death,”81 while the latter “is acquired and may be lost.”82 entered into in accordance with law for the establishment of conjugal and family life85
• A person’s ability to act with legal effects is governed by his personal law. One’s
personal law is viewed as best qualified to decide what restrictions should be imposed • Recognition of Marriage - that act of a State which affirms the validity of marriage in
its particular jurisdiction
73
Jorge Coquia, Conflict of Laws (1995) at 243.
74
75
Jorge Coquia, Conflict of Laws (1995) at 247. The Jurisdiction and Choice of Law Framework
Ibid.
76
R.A. 9048 was later on enacted allowing change of first name or nickname in a summary proceeding by filing the necessary application Salonga 86 – there are 3 ways by which conflicts cases are disposed. The following will be
with the local civil registrar.
77
representations of the said means.
Jorge Coquia, Conflict of Laws (1995) at 245.
78
Ibid.
79
FAMILY CODE, Art. 236.
80 83
Approved December 13, 1989. Jorge Coquia, Conflict of Laws (1995) at 243.
81 84
NEW CIVIL CODE OF THE PHILIPPINES, Article 37. Insular vs. Frank
82 85
Ibid. Article 1, Family Code of the Philippines.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
19
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the family and of society- without which there would be neither civilization nor progress87. It
Figure 1 is the characteristic of permanence therefore that distinguishes marriage from a purely
consensual transaction.
Lack of Jurisdiction
Marriage is also a civil contract, such that no ecclesiastical elements are involved. The law
Case not does not look upon marriage as a sacrament. In the eyes of the law, marriage is a secular
DISMISS THE CASE disposed of in matter. When the requirements of law are complied with, what has been entered, is by law,
Refusal to assume the Philippines a contract of marriage, whatever else a church or a religious organization may demand from
Jurisdiction its members.
Marriage can be argued to be the very groundwork for other domestic relations. The state
Figure 2 has an interest in this special contract. Marriage is the foundation of the family, and around
the family, many of our present day social institutions are built.
Assume Apply Lex Case is disposed
jurisdiction Fori the Philippines Extrinsic Validity
In the Philippines, the determination of the extrinsic validity of marriage is referred to the lex
loci celebrationis, or, law of the place of celebration. This is a consequence of the maxim locus
Figure 3 regit actum, or the place governs the act. By extrinsic validity, we mean the legal sufficiency
insofar as the formal requisites of a valid marriage are concerned.
Consider law of other state Story – the general principle is that between persons, sui juris, the validity of a marriage is to
Case is disposed be decided by the law of the place where it is celebrated. If the marriage is valid in the place
Assume
the Philippines of celebration, it is valid everywhere. In the same line of thought, if the marriage is invalid in
jurisdiction
Apply law of the other state the place of celebration, it is invalid everywhere.88
The Hague Convention on Celebration and Recognition of the Validity of Marriages89, states
that the formal requirements for marriage are governed by the law of the state of
celebration, a reiteration of a recognized principle of conflict of laws. Hence, the general
rule is that all states recognize as valid marriages celebrated in foreign countries if they
The diagrams under this framework stresses that the operative act by which cases are complied with the formalities prescribed there.90
disposed is the choosing of what law would govern a particular issue. This framework
assumes that the State has the freedom to choose the manner it takes to dispose a case. This Ernst Rabel made a comparative survey of various legal systems revealing that there are three
framework is used in this paper to stress on the assumption that issues in marriage with a ways of applying the maxim locus regit actum:
foreign element are primarily disposed of by a State’s choice of law which is more often than
not, an institutionalized method of determining its choice. The imperative or compulsory rule.
In one group of countries, including the United States, England, Denmark, Japan and the
MARRIAGE AS A SPECIAL CONTRACT Philippines, the law of the place where the marriage is celebrated governs the matter of
Article 1 of the Executive Order No. 209, otherwise known as the Family Code defines formal validity, irrespective of whether the marriage is concluded within or outside the
marriage as a special contract of permanent union entered into in accordance with law for the forum. In short, the maxim locus regit actum or the principle that “the act is governed by the
establishment of conjugal and family life. It is a special contract because it is more than a law of the place where it is done” is applied compulsorily; the law of the place of celebration,
mere contract accompanied by duties and obligations unique to a “married life”. The the lex loci celebrationis, is solely decisive.
consent of the parties is essential to its existence like any other contract. However, when
the contract to marry is executed by a man and a wife, a relation between the parties is The optional rule.
created which they cannot change except for special circumstances as will be discussed later. Many countries follow the optional rule—parties celebrating a marriage within the forum
Other contracts may be modified, restricted or enlarged or entirely released from upon the must comply with domestic formalities; parties marrying abroad must observe either the
will of the parties. Not so with marriage. The relation, once formed, calls for the law to formalities prescribed at the place of celebration or those of the personal law of the parties.
step in and hold the parties to various obligations and liabilities. Marriage is a special Article 7 of the Hague Convention on marriage adopts the optional rule by providing that
contract also because it is vested with public interest. Marriage is an institution in the
maintenance of which in its purity the public is deeply interested for it is the foundation of 87
Maynard vs. Hill, 125 US 190, 8 S. Ct. 723, 31 L. Ed. 654 (1888).
88
HERBERT F. GOODRICH, HANDBOOK OF THE CONFLICT OF LAWS(West Publishing, Minnesota, 1949).
89
Hague Convention on Recognition of Validity of Marriages (March 14, 1978).
86 90
JOVITO SALONGA, PRIVATE INTERNATIONAL LAW (Regina Publishing Company, 1995). Caguioa page 255

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
20
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
where the parties to a marriage are of different nationalities, a marriage not complying with to the spouses and the marriage at the time of the marriage. Thus, marriages that are
the formal requirements in the country of celebration must satisfy the national laws of both contracted by parties forbidden to marry, or forbidden to enter the particular marriage in
parties in order to be recognized by other participating states. question, of those which are polygamous or incestuous are denied validity.

The modified or religious method Sources of Law


This method is adopted by a few countries, notably, Greece, Egypt, and Spain, insofar as Marriages between Filipino Citizens, no matter where celebrated, are valid if it complies with
Spanish Catholics are concerned due to its distinctive premium on religious custom. The the requirements of Article 2 of the Family Code, which states that:
rule may be modified by considering the religious form prescribed by law of these countries “No marriage shall be valid, unless these essential requisites are present:
as essential for marriage of their own nationality. A marriage by merely civil ceremony Legal capacity of the contracting parties who must be a male and a female; and
performed abroad may not be recognized in the forum. Consent freely given in the presence of the solemnizing officer.”

Sources of Law JURISDICTION AND CHOICE OF LAW


The Philippines abide by the imperative rule. For marriages celebrated outside the Philippines, Philippine law on substantive validity does not exclusively adhere to the lex loci celebrationis
Article 17 of the Civil Code embodying the rule locus regit actum, or les loci celebrationis, rule. There is a distinction as to marriages celebrated abroad, and in respect to marriages in
govern: the Philippines. As to the former, what applies is a combination of the lex loci celebrationis
“The forms and solemnities of contracts, wills, and other public instruments shall be governed by the rule and the personal law (national law) rule. This is clearly the meaning of Article 26 of the
laws of the country in which they are executed.” Family Code.
For marriages celebrated in the Philippines, the formal requirements are set forth in Article 3 This general rule should therefore be qualified by two exceptions. First, marriage between
of the Family Code. - 1. Authority of the solemnizing officer; 2. A valid marriage license Filipino nationals who marry abroad before the Philippine consular or diplomatic officials, in
expect in cases provided in Chapter 2 of this Title; and 3. A marriage ceremony which takes which case whatever the law of the place of the celebration prescribes, the substantive
place with the appearance of the contracting parties before the solemnizing officer and their validity is to be determined by Philippine laws. Secondly, the saving clause of Article 26,
personal declaration that they take each other as husband and wife in the presence of not declaring as invalid marriages prohibited under Philippine laws by reason of public policy,
less than two witnesses of legal age. including polygamous, incestuous marriages and those contracted through mistake.
As to marriages entered into in the Philippines, the national law of the party concerned
JURISDICTION AND CHOICE OF LAW insofar as his capacity to contract marriage is concerned is decisive. Corollary to this, Article
The lex loci celebrationis principle is expressed in the first paragraph of Article 26 of the 21 of the Family Code requires that aliens must submit a certificate of legal capacity to
Family Code, which states that: contract marriage issued by their respective diplomatic or consular officials, before they can
“All marriages solemnized outside the Philippines, in accordance with the laws in force in the country be issued a marriage license.
where they were solemnized, and valid there as such, shall be valid in this country, except those
prohibited under Articles 35(1) (4) (5) 36, 37 and 38….” DIAGRAM REPRESENTATIONS

Intrinsic Validity FACTUAL SITUATION POINT OF CONTACT


Intrinsic validity relates refers to the legal sufficiency insofar as the substantive requirements
of a valid marriage are concerned, including the general capacity of the contracting parties.
However, each legal system possesses a distinct concept of what matters are of substance as If celebrated abroad
distinguished from what matters are of form. A survey of the various legal system
demonstrates that there are two competing principles as to the law that should govern the Lex Loci Celebrationis, without prejudice to
substantive validity of marriage. One points to lex loci celebrationis while the other direction Between Filipinos Arts. 26, (1) (4) (5) 36, 37 and 38 of the
refers to the personal law of the contracting parties, either by the parties’ personal laws, Family Code.
which may either be their domicile or nationality.
It is said that the principle that would govern the intrinsic validity of a marriage depends on
the policies and treatment of marriage of a particular legal system. Where marriage is Lex Loci Celebrationis, except if the marriage is
considered a contract, lex loci celebrationis prevails; while if considered primarily as a status or Highly immoral (i.e., bigamous, polygamous
an institution, it is the law of their domicile or their nationality that is controlling. Between Foreigners marriages)
In the United States of America, the usual view is that a marriage valid where entered is valid
anywhere. The Second Restatement provides that a marriage, which satisfies the Universally Considered Incestuous (i.e.,
requirements of the State where contracted, will be recognized everywhere as valid unless it between brothers and sisters, whether whole or
violates the strong public policy of another State which has the most significant relationship half blood, legitimate or illegitimate, between
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
21
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
ascendants and descendants). and the fact of an existing marriage on the part of the contracting party. All other
impediments are applied only to marriages celebrated within the State.
Rabel advocates, however, the alternative proposition that the personal law of the parties
should continue to govern for a certain period to be fixed by the law after the parties change
Lex Loci Celebrationis, except if the marriage is their domicile; marrying after this time they should be subject to the law of the place of
Highly immoral (i.e., bigamous, polygamous celebration alone with effect also in their home countries. The evident purpose of the
marriages) suggested rule is to avoid evasion of the effects of the personal law, without the same time
Mixed (Between Filipino and Foreigner) upholding the exaggerated coercive power at present attached to it.
Universally Considered Incestuous (i.e., Some such rational solution as exemplified in these suggested is needed in every country’s
between brothers and sisters, whether whole or legal system. It would, of course, be more desirable to work out such a solution on an
half blood, legitimate or illegitimate, between international level by means of an international convention, in order to give a measure of
ascendants and descendants). stability of family relationships that freely formed by the parties involved.

If celebrated in the Philippines MARRIAGE AS STATUS


The resultant relationship between a man and a woman who entered in a contract of
National Law (Art. 21, FC) provided not marriage is one of personal status. This status is created and destroyed by law and not by
Between Foreigners highly immoral or universally considered mere consent of the parties, and is of legal importance to all the world.91
incestuous. Marriage therefore creates social status or relation between the contracting parties in which
not only they but the state are interested and involves a personal union of those participating
in it of a character unknown to any human relations, and having more to do with the morals
Mixed National law of the Filipino, (otherwise, and civilization of people than any other institution. 92 And whenever a peculiar status is
public policy maybe militated against). assigned by law to members of any particular class of persons, affecting their general position
in or with regard to the rest of the community, no one belonging to such class can vary by
Marriage by Proxy any contract the rights and liabilities incident to this status.93
A marriage by proxy is one where one of the parties is merely represented at the ceremony Marriage as a status carries with it implications in two fields: the realm of personal rights and
by a friend or delegate. The following are the rules governing such a marriage: obligations of the spouses, which is a filed of personal affair between the husband and wife and
If celebrated in the Philippines — the marriage is void. as such will not ordinarily be interfered with by the courts of justice; and the realm of
Article 6 of the Family Code requires the presence of both parties. It is said however that property relations, to which several judicial sanctions are applicable.
the rule holds true only in cases where the marriage is between Filipinos or between a
Filipino and a foreigner. In case the contracting parties are both foreigners, then it would be PERSONAL RIGHTS AND OBLIGATIONS
a valid marriage provided their national law considers is such. It should be noted also that In our jurisdiction, the national law of the parties governs personal relations between the
the place where the proxy appears is considered where the marriage is celebrated. spouses. Thus, Article 15 of the Civil Code states, “Laws relating to family rights and duties,
If celebrated abroad — the rule is lex loci celebrationis, whether the marriage is between or to the status, condition and legal capacity of persons are binding upon citizens of the
Filipinos, foreigners or mixed. Philippines, even though living abroad.”
This is of course subject to the usual exceptions (highly immoral etc.) and subject to special
provisions as may be found in special laws (e.g., immigration laws for purpose of SCOPE OF PERSONAL RELATIONS BETWEEN THE HUSBAND AND THE WIFE
immigration). Personal rights and obligations between husband and the wife, all of which are generally
governed by the national law of the husband, but subject to the principles of characterization
CRITIQUE OF THE CURRENT RULE and to the exceptions to the application of proper foreign law, include the following:
Authors are unanimous in saying that the lex loci celebrationis rule is immediately susceptible Mutual identity, cohabitation, and respect;
to abuse. Parties are inclined to shop for the forum that will allow them to marry, when the Mutual assistance and support;
laws of their own country provides an impediment to their union. Right of the wife to use the husband’s name;
An alternative suggested in found in the Hague Convention, the Treaty of Montevideo, and Duty of the wife to follow the husband to his residence or domicile.
the Codigo Bustamante. Marriage impediments or disabilities are divided into two
categories: one of international and the other of merely national applicability. Only the
gravest objections are considered sufficient to prevent or nullify a marriage contracted 91

92
Beale, Conflict of Laws, 1935.
MEL STA. MARIA PERSONS AND FAMILY RELATIONS LAW, pg.100 (
abroad, such as marriages between ascendant and descendants, between brothers and sisters 93
Freeman’s Appeal, 68 Conn 533, 37 ALL 4200, 57 ASR 112.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
22
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Under Article 68 of the Family Code, “the husband and wife are obliged to live together, valid where it was performed, is not effective in this country to constitute a valid
observe mutual love, respect and fidelity, and render mutual help and support.”94 marriage.”
• Sottomayor v. De Barros – “It is a well settled principle of law that the question of
Effect of Change of Nationality personal capacity to enter into any contract is to be decided according to the law of
If the husband will effect a subsequent change of nationality the following rules are believed the domicile….. the law of a country where a marriage is solemnized must alone decide
applicable; all questions relating to the validity of the ceremony by which the marriage is alleged to
If both the husband and the wife will have a common nationality – the new national law will have been constituted; but as in other contracts, so in that marriage, personal capacity
govern their personal relations; must depend on the law of the domicile, and if the laws of any country prohibits its
If only one will change nationality – the common nationality will be applicable. subjects within certain degrees of consanguinity from contracting marriage, and stamp a
If there never was any common nationality – the governing rule will be the national law of marriage between persons within the prohibited degrees as incestuous, this in our
the husband at the time that the marriage was entered into.95 opinion imposes on the subjects of that country a personal incapacity which
contributes to affect them so long as they are domiciled in that country where the law
Duties of a Married Person prevails, and renders invalid a marriage between persons, both a the time of their
Duty to live together marriage subjects of, and domiciled in the country which imposes the restriction
Duty to observe mutual love and respect wherever such marriage may have been solemnized.”
Duty to observe mutual respect and fidelity
Duty to render mutual help and support
ANNULMENT AND DIVORCE
Procedure to Enforce Rights C/O: FRANCO SARMIENTO, KRISTINE TRINIDAD, FRITZZIE ESPANOL, AND MIMI
To enforce rights granted by the husband’s national law, resort is had to the lex fori, hence LAMA (Salonga, CHAPTER XV, 1995)
should suits be litigated in the Philippines, our procedural rules will have to be followed.
THE RECOGNITION OF THE TERMINATION OF MARRIAGE, LEGAL SEPARATION
Survey of jurisprudence related to the Recognition of the Inception of Marriage AND OTHER RELATED-ISSUES
• Wong Woo Yu v. Vivo – “Thus, under Article 15 of our new Civil Code provides that
family rights or to the status of persons are binding upon citizens of the Philippines, DIVORCE
even though living abroad, and it is well known that in 1929 in order that a marriage Overview of divorce/ kinds of divorce
celebrated in the Philippines may be valid, it must be solemnized either by a judge of Divorce is the legal dissolution of the marriage bond rendered by a competent court for
any court inferior to the Supreme Court, a justice of the peace, or a priest or minister causes defined by law which arose after marriage. It presupposes that marriage is valid.96
of the gospel of any denomination duly registered in the Philippine Library and Museum Generally, there are two kinds of divorce: (1) absolute (divorce a vinculo matrimoniee)
(Public Act 3412, Section 2). where marital ties are dissolved and (2) relative (divorce a mensaet thoro) where parties
remain married although they are allowed to live separately from each other.97
• Apt v. Apt – “If a marriage is good by the laws of the country where it is effected, it is
Upon the enactment of the Civil Code, absolute divorce was no longer recognized except
good all the world over, no matter whether the proceeding or ceremony which
under Article 26 of the Family code wherein a divorce validly obtained by foreign spouse
constituted marriage according to the law of the place would or would not constitute
against the Filipino spouse is recognized and given effect and the latter is free to re-marry as
marriage in the country of domicile of one or other of the spouses. If the so-called
an exception to the general rule and when obtained by alien spouses. However, relative
marriage is no marriage in the place where it is celebrated, there is no marriage
divorce or more known as legal separation is allowed as provided for under Article 55 of the
anywhere, although the ceremony or proceeding if conducted in the place of the
Family Code.
parties’ domicile would be considered a good marriage.
The importance in determining whether a decree of divorce is valid or not is to ascertain the
• The contract of marriage in this case was celebrated in Buenos Aires; that the
status of the parties and to fix and make certain the property rights and interest of the
ceremony was performed strictly in accordance with the law of that country; that the
parties such as custody, care and support of the children.
celebration of marriage by proxy is a matter of form of the ceremony or proceeding,
and not an essential of the marriage; that there is nothing abhorrent to Christian ideas
Philippine Conflicts Rule on Divorce
in the adoption of that form; and that, in the absence of legislation to the contrary,
With the abolition of the absolute divorce under the Civil Code, the rule with reference to
there is no doctrine of public policy which entitles me to hold to that the ceremony,
Filipino couples became rigid and simple: as long as they are Filipino citizens, they cannot
obtain a divorce decree abroad which would be recognized in the Philippines. Likewise,

94 96
Don’t know what book this is (photocopy) Agpalo p. 324
95 97
id Paras p. 266

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
23
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Philippine courts are not available to aliens for the purpose of obtaining absolute divorce where he/she secured the divorce, the divorce obtained therein from his/her Filipino spouse
decrees.98 may be regarded as valid in the country, under Section 26 of the Family Code, and will entitle
The rule on divorce in this jurisdiction was reiterated in the case of Tenchavez vs. Escano, as the former Filipino spouse to remarry. Philippine courts have no jurisdiction over a petition
follows:99 “The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo ad for divorce, it being outlawed in the country.102
vinculo matrimonii; and in fact does not even use that term, to further emphasize its restrictive policy The Hague Convention Relating to Divorce and Separation of 1902 provides that the
on the matter, in contrast to the preceding legislation that admitted absolute divorce on grounds of granting of divorce or separation must comply with the national law of the spouses and the
adultery of the wife or concubinage of the husband (Act No. 2710). Instead of divorce, the present law of the place where the application for divorce is made.103
Civil Code only provides for legal separation (Title IV, Book I, Arts. 97 to 108), and, even in that case,
it expressly prescribes that bonds shall not be severed (Art. 106, subpar. 1).” LEGAL SEPARATION
Although as a rule divorce is not recognized in this jurisdiction, divorce is allowed in the Relative divorce or otherwise known as legal separation under the Family Code was
following instances: developed by the ecclesiastical courts at a time when, following the downfall of Rome, the
between foreign spouses and supremacy of the Church was recognized and the marriage tie regarded as indissoluble. The
by a foreigner in his country or in a country which grants divorce, who is married to a Siete Partidas, the governing Law here during the Spanish regime, allowed relative divorce
Filipino citizen is recognized insofar as the foreigner is concerned. only.104
As to the first instance wherein divorce is between foreign spouses, the Court considers the Article 55 of the Family Code provides the grounds by which the innocent spouse may file an
absolute divorce between foreign spouse as valid and binding in the Philippines on the ground action for legal separation.
that the status and dissolution of the marriage are governed by their national law except An action for legal separation must be filed within five (5) years from the time of the
when they contravene the law or public policy of the country. occurrence105 but such action shall in no case be tried before six months shall have elapsed
On the other hand, divorce legally obtained by foreign spouse against the Filipino spouse is since the filing of the petition to give the spouse the chance to reconcile.
expressly provided for under the second paragraph of Article 26 of the Family Code: “Where The laws governing absolute divorce are applicable to legal separation as provided for in the
a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter Hague Convention Relating to Divorce and Legal Separation of 1902.
validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse
shall likewise have capacity to remarry under Philippine Law.” LEGAL CONSEQUENCES OF MARRIAGE
The above-quoted provision was enacted to correct the unfair situation, where the status of C/O: FRANCO SARMIENTO, KRISTINE TRINIDAD, FRITZZIE ESPANOL, AND MIMI
a person would depend on the territory where the question arises: in the Philippines, the LAMA
Filipino spouse would still be legally married and cannot re-marry; while abroad, the person (Salonga, CHAPTER XVI, 1995)
who secured the divorce was no longer married to the former and could thus remarry.
However, said article does not recognize the divorce between an alien spouse and a Filipino PROPERTY RELATIONS AND MARRIAGE
spouse if the divorce is obtained by the latter nor does a divorce between Filipino spouses. Marital Property Relations in the Philippines
But the Filipino spouse may go around the prohibition by first acquiring a foreign citizenship, The pertinent provision regarding the property relations that govern between husband and
as by naturalization in a foreign country, and having done so, he/ she as a foreigner can then wife in the Philippines can be found in Title IV of the Family Code, particularly in the General
obtain a divorce, which will then be recognized under Article 26, if done in good faith.100 Provisions found in Chapter 1 of the same Title.
Art. 74. The property relationship between husband and wife shall be governed in the following
Law governing divorce order:
Since Article 26 of the Family Code recognizes divorce obtained by an alien spouse married (1) By marriage settlements executed before the marriage;
to a Filipino spouse, the question which law governs the divorce is important to determine (2) By the provisions of this Code; and
whether the divorce obtained by the alien spouse is valid. In the United States, the “local law (3) By the local custom. (118)"106
of the domiciliary state in which the action is brought will be applied to determine the right The law recognizes that the property relation between spouses may be set by express
to divorce.” Thus, the plaintiff or petitioner must have his domicile in the state or country agreement through a proper and valid marriage settlement. Article 77 prescribes the
where the complaint for divorce is filed by him/her.101 conditions for the validity of a marriage settlement that it must be in writing, signed by the
The rationale for the above rule is based on the fact that the state of a person’s domicile has parties, and made prior to the celebration of marriage.107 Generally the parties may stipulate
the dominant interest in the person’s marital status and therefore has judicial jurisdiction to
grant him a divorce. So long as the alien spouse has acquired a domicile in the country
102
Agpalo
103
Coquia p. 275
98 104
Salonga p. 289 Salonga p. 300
99 105
Tenchavez vs. Escano, 15 SCRA 355. Article 57 of the FC
100 106
Agpalo p. 329 Article 74 of the Family Code
101 107
Agpalo Article 77 of the Family Code

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
24
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
or agree to any arrangement in the marriage settlement for as long as it is not contrary to property and his different treatment thereof would be helpful in filling the gaps in Art
law and public policy and is within the limits provided for in the Family Code.108 80 of the Civil Code.
• Article 91 states that the absolute community property regime encompasses all
the property owned by the spouses at the time of the celebration of the marriage or Immovables
acquired thereafter. Art 93 further provides that a presumption exists that all property • Immovables owned before the celebration of marriage is regulated by the lex situs. In
acquired during the marriage belongs to the absolute community. the United States, this area is usually is a non-conflict problem, since the Situs rule
• Under the Conjugal Partnership of Gains regime 109 , the spouses place in a provides a uniform solution. The immovable is characterized as an isolated object of
common fund the proceeds, products, fruit and income from their separate properties, rights so that the interests of various persons such as the buyer, or a spouse, or a
through effort or chance. In the event of dissolution of the marriage or partnership, the mortgagee is determined by the law of the place where the land is situated111.
benefit that accrued to the spouses shall be divided equally between them, unless • However the significant conflict of law issue arises when we speak of marital property
otherwise stated in the marriage settlement. relations involving immovables acquires after the marriage. In this situation, the
• The third property regime is called the regime of Separation of Property in which application of the straight Situs rule poses certain problems.
case each spouse shall own, dispose of, possess, administer and enjoy his or her own • Hughes vs Hughes112 – Spouses Hughes were married in Washington DC, however they
separate estate, without need of the consent of the other110. established their marital domicile following the domicile of the husband in Iowa. After a
Conflict of law problems arising from the property of the spouses are easily disposed of few years, as a result of the income of the husband, they were able to buy a land in
when there is a marriage settlement that has been executed by the parties. But how does New Mexico and thereafter established it as their new domicile. After a few years their
one face the same problem in the absence of such settlement? The same Title and Chapter marriage was terminated. The issue was whether the New Mexico land that was
on the General Provisions provide the answer in the form of Article 80. bought using the assets acquired in Iowa shall be governed by the Iowa law or the New
Art. 80. In the absence of a contrary stipulation in a marriage settlement, the property relations of Mexico law. The court ruled that the property relation was governed by the laws of
the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the Iowa as to the assets accumulated that time they were still domiciled there, and that
marriage and their residence. This rule shall not apply: upon moving these assets to New Mexico , that rights in the New Mexico land
Where both spouses are aliens; purchased with those assets would continue to be recognized with the incidents that
With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and they had in Iowa. This is the so-called Tracing Rule which Scoles states: “Thus the
executed in the country where the property is located; and marital interest which attaches to movable assets acquired by the spouses according to
With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property the law of their domicile at the time of acquisition is recognized and traceable into real
situated in a foreign country whose laws require different formalities for its extrinsic validity. (124a) property located in another state in which those assets are invested.”113 The reason
• The provision imposes the Philippine law in the absence of any agreement to the given by the court for such an outcome is that a person’s title is not lost when the
contrary where the contracting parties are Filipino citizens. It further claims application property is transferred to another state, based on choice of law consideration that
even if the parties contracted marriage in another jurisdiction or even if they decided protect the reasonable expectation of the parties in their interests under the law of the
to take up residence abroad. This takes into consideration Art 16 of the Civil Code of state of their domicile.
the Philippines, the Situs Rule subjects the real and personal property to the law of the
country where it is located or situated. Movables
• The provision cites 3 exceptions when the Philippine law does not apply. First, the • One author points out that the old law on movables was mobilia sequuntur personam
law defers application to spouses who are both nationals of another state. Second, in which meant that the rights over movables were governed by the law of the owner’s
case the parties entered into a contract which involves properties abroad the extrinsic domicile. Movables, by their nature are capable of being transferred easily from place to
validity of such contract, whether executed here or abroad, will not be governed by place and as a result it was difficult to anticipate where they could be situated at a given
Philippine laws. And lastly, the law of the place where the property is situated outside time.114 Thus in order to provide for convenience, they deemed it better that the law
the Philippines shall govern the extrinsic validity of the contract entered into in the to govern movables would be the domicile of the owner.
Philippines. • US jurisprudence concerning the question of marital right in movables owned at the
• Article 80 seems to make reference only to the law of the place of the property time of marriage seems devoid of conflict of laws issue since no state provides for
concerned without distinction as to whether the property involved is immovable or immediate marital interest upon such movable asset. These issues are usually resolved
not. This is where we think Scoles' distinction between immovable and movable as succession issues related to the law of the decedent-owner’s domicile. Making
reference to older cases from the past century and beyond, Scoles pointed out that

111
Scoles
108 112
Sta Maria p.361 91 N.M. 339, 573 P.2d 1194 (1978)
109 113
Art 106 Scoles
110 114
Art 145 Coquia

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
25
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
before the matrimonial domicile of the couple will determine the interest that each In the United States, two such property regime systems had often times been the subject of
spouse has in the movable property of the other owned at the time of the marriage. confict of laws issues, the common law system and the community or marital property
This “marital domicile” is the common domicile of the parties at the time of the system. In addition to this, conflict of laws question also arise concerning both property
marriage or that which they establish immediately after the marriage. This rule on the owned by the parties at the time of the marriage, and that acquired subsequently thereto.
first common domicile has distinct advantages because it subjects the parties to a This is so because the property regimes of different states prescribe different rights and
uniformly single governing law and there is a reasonable assumption that the parties interests on the spouses who acquire assets before or after the marriage.
were submitting themselves to the law of their first common domicile when they Jurisprudence tells us that the marital property regime of a married couple shall be governed
decided to contract the marriage. by express contract between the parties. A pre-nuptial agreement validly entered into by the
• Because of these distinct advantages discussed, in most instance where the courts are parties in the proper form and substance prescribed by law shall determine the outcome of
asked to determine questions arising from movables acquired subsequent to marriage, it any issue concerning property relations that may arise during the existence of marriage. This
will be decided applying the same principles governing property relations involving is the easy answer. However, in the absence of a contract, the law imposes or assumes a
movables acquired at the time of marriage. In other words, what is to be applied is also particular type of property regime that governs the marriage. It may be Common Law
the law of their common domicile. The change of the situs of the movables does not system, Community or Marital Property system, or in the Philippines, we have what is called
affect the interest of the individual spouses in the assets, since the court recognizes the Absolute Community Property regime as the default system in absence of such ante-
that vested interests of the spouses continues insofar as the properties in issue are nuptial agreement. The type of system governs the marriage depends on the law of the “state
concerned. This remains true even though the spouses would decide to transfer their of dominant interest” 117 . In most cases, this so-called “state of dominant interest” is the
domicile to another place. domicile of the parties.
• However if upon changing their domicile they acquire new property there, the The usual course of proceeding when a court is confronted with the issue of conflict of laws
question arises as to what their marital rights are in the newly acquired properties. The regarding property is to determine whether it is an immovable or a movable, and thereafter
rule is that the law of the domicile of the owner at the time of the acquisition shall they will be able to apply what controlling legal system is appropriate.
govern the property relation unless for some reason the original domicile of the parties
would continue to prevail.115 The reason for this is obviously the domicile at the time THE DOCTRINE OF IMMUTABILITY
of the acquisition is the state having the dominant interest in the determination of the What is the doctrine of immutability? The doctrine states that marital rights and movables
issues. The latter qualification refers to one wherein the property regime of the party are fixed by law of the first marital domicile and continue notwithstanding the acquisition of a
would change subsequently during marriage. Thus, concluded by Scoles, the marital new domicile. 118 This doctrine has been easily discarded by many jurisdiction because of
rights in property are imposed by the law as an incident of the state’s interest in the inherent failures. First, the rigidity of the principle ignores the inevitable fact that
marriage relationship and the protection of it’s domiciliaries. circumstances could and would change between the parties, and if it does so the doctrine
• In case of income from movables, the current marital domicile controls movables at the provides no relief from the effects of change of circumstances. Second, Many countries have
time of acquisition should also apply. Although the new marital domicile cannot change become signatories to the Hague Convention on Matrimonial Property which provides that
the nature of ownership of acquisitions that occurred during a domicile elsewhere, it the original habitual domicile or designated state may be replaced by a subsequent habitual
can reasonably govern its present domiciliaries by its marital property rule. residence in several circumstances. 119 But this is not to say that the opposite end of the
• The laws of the state on marital property are often reflective of the protective policy spectrum is the solution to this problem. Full mutability, like when you apply the law of the
on the family as the basic unit of society. States that give such importance to the family last domicile would result to tampering of vested rights. Scoles then points out that partial
often prescribe a number of legislation for its protection. In the Philippines, these mutability, i.e, to determine marital rights by the marital domicile at the time the issues arise
protective policies are scattered from the Constitution to the Family Code and even in except as to vested rights acquired under the law of a former domicile is an effective
Special Penal Laws. Legislation of this sort is the product of a balancing act between the compromise.120
protection of the family against the individual rights of the spouses like freedom to
alienate the property. LEGITIMACY, LEGITIMATION & ADOPTION,
SUCCESSION & ADMINISTRATION
MARITAL PROPERTY AS CONFLICT OF LAWS ISSUE C/O: JOYCE BRIONES, JORDAN PUGEDA, VICTOR RAMOS, HENRY VILLANUEVA
When we speak of Marriage as a conflict of laws issue, it inevitably touches upon property (Salonga, CHAPTER XXII, 1995)
relations since in every legal system, marriage has an important impact on the property rights
of the husband and wife. 116 From the time of the celebration of the marriage the law LEGITIMACY
recognizes property regimes that begins to govern their property relation.
117
ibid
118
ibid 479
115 119
Scoles 479 Hague Convention on the Law Applicable to Matrimonial Property Regimes, Arts 4,6, 7 (1976), 25 Am J Comp. L. 394, 395-96 (1977)
116 120
Scoles ibid.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
26
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
DEFINITION – the status acquired by a person who is born in lawful wedlock or to parents persons who may contest the legitimacy of a child, prescribing the rights of legitimate
who are married to each other at the time of his birth.121 Legitimacy according to Black122 is children, and providing for proof of filiation, are properly applicable.
“lawful birth; the condition of being born in wedlock; the opposite of illegitimacy or Presumptions of legitimacy governed by the national law of the male parent – Light may be
bartardy.” shed by the law that provides that presumptions of legitimacy are not mere rules of evidence,
NATURE – the relation between parent and child is a relative domestic status based on they are rules of substantive law; presumptions are the very substance of legitimacy cases
natural tie of blood. The child may be the legitimate child of the father but illegitimate with Art. 10 of the NCC, by virtue of which the national law of the persons whose succession is
respect to the mother or vice-versa.123 in question governs all questions in respect to the order of succession, the amount of
Legitimacy at Birth.124 Legitimacy being a domestic status, it must, on general principles, be successional rights, and the intrinsic validity, of testamentary provisions, whatever may be the
governed by the domicile of the parties to it.125 Where one obtains a valid divorce, and then nature of the property and the country in which it is found was seemingly overlooked.
marries again and has children, the marriage being polygamous and void, the children are
illegitimate, whether the person who obtained the divorce was domiciled in the state which DETERMINATION OF LEGITIMACY OF A CHILD133
granted it126 or in another state.127 As per Philippine Law Article 163 to 165 of the Family Code on Paternity & Filiation.
Legitimacy of a child is submitted to the personal law of the parents, either Domicile or The personal law of the illegitimate child is governed by the national law of the mother. If
Nationality.128 Under the common law and civil law, the personal law of the parents provides later legitimated, personal law of the child follows that of the father.
for the following principles:129 Under Common Law, the rule that children born within lawful wedlock are legitimate had
Nationality principle, national law of the male parent is decisive been modified in many states by statute which may provide that the offspring of certain
Domiciliary principle, the domicile of the male parent is decisive. invalid marriages shall be legitimate. Those born illegitimate can be legitimated by events
For most countries the personal law of the father is applied. For example, German law occurring after their birth such as marriage of their parents or some form of recognition on
provides for the personal law of the “husband of the mother”. Its purpose is the preservation the part of one or both. The difference in states raises the choice of law problems for it may
of the stability of the family.130 In the United States, a wholly distinct rule obtains: the child’s be possible that the child is legitimate to a parent yet illegitimate to the other.
relationship to each parent is determined separately. Second Restatement on legitimacy of the American Law Institute provides:
Considering family stability and unity, honor of the married woman and marital rights the Section 287. Laws governing legitimacy – (1) the child will usually be held legitimate if this
application of personal law of the parent is considered sound. would be his status under the local law of the state where either (a) the parent was
domiciled when the child’s status of legitimacy is claimed to have been created or (b) the
PHILIPPINE LAW child was domiciled when the parent acknowledged the child as his own
Article 15131 New Civil Code provides that the national law determines the question of Section 288. Incidents of Legitimacy Created by Foreign Law – a state usually gives the same
legitimacy of the child. incidents to a status of legitimacy created by foreign law under the principles stated in Sec
The national law of the male parent governs the question as to: 287 that it gives to the status when created by its own local law. / Persons legitimated under
What time and under what circumstances the presumption of legitimacy may be established the principles stated in Sec 287 will usually be permitted to inherit land in the state of the
or rebutted, forum to the extent, and under the same circumstances, as those legitimated under the
Within what period, forum’s local law
What events terminate the right to disown the child, and
Whether the alleged recognition of paternity may be revoked. LEGITIMATION
The National law of the male governs – If different nationalities, legitimacy is determined by DEFINITION - The subsequent marriage of the child’s parents otherwise called legitimation
the national law of the father.132 As a child of Filipino fathers are concerned, irrespective of per subsequens matrimonium, recognition of the child by the father or legitimation per
the nationality of their spouses, the provisions of the Family Code of the Philippines rescriptum principis, or by such conduct of public repute on the part of the parent which may
enumerating the persons who may be considered legitimate children, indicating who are the be considered sufficient to elevate a child to the status of legitimacy134 relates back to the
birth of the child. Other laws, only from the time of legitimation.
121
Black’s 135 provides that legitimation is the making legitimate or lawful that which was not
Salonga, 329.
122
Black’s Law Dictionary (6th ed.) p.901 ordinarily so; especially the statutory procedure of legalizing (legitimating) the status of an
123
124
JOSEPH H. BEALE, A TREATISE ON THE CONFLICT OF LAWS (1995) illegitimate child. Such is usually necessary to assure inheritance rights to the child.
Id.
125
Adams v. Adams, 154 Mass. 290, 28 N.E. 260, 13 L. R.A. 275 (1891)
126

127
Olmsted v. Olmsted, 190 N.Y. 458, 83 N.E. 569, 123 A.S.R. 585 (1908) THEORIES
Adams v. Adamss, 154 Mass. 290, 28 N.E. 260, 13 L.R.A. 275 (1891)
128
JORGE COQUIA AND ELIZABETH AGUILING-PANGALANGAN, CONFLICT OF LAWS: CASES, MATERIALS AND COMMENTS (1995 edition) As provided by Padilla, 136 Theories concerning legitimation are:
129
Salonga, 329.
130
Coquia and Elizabeth Aguiling-Pangalangan.
131 133
NCC Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens Coquia and Elizabeth Aguiling-Pangalangan.
134
of the Philippines, even though living abroad. (9a) Salonga, 329.
132 135
JORGE COQUIA AND ELIZABETH AGUILING-PANGALANGAN, CONFLICT OF LAWS: CASES, MATERIALS AND COMMENTS (1995 edition) Black’s Law Dictionary (6th ed.) p. 901

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
27
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
1. the common law theory under which bastards cannot be legitimized by any supervening
act Legitimate or Legitimated Child and Parents143
2. the theory that the subsequent intermarriage of the parents is sufficient to legitimize The personal law of the father refers to the national law of the domiciliary law depending
3. the theory that the father’s acknowledgment is sufficient to legitimize on the theory followed by the particular legal system. Except for immovable properties of
4. the theory that both an intermarriage and an acknowledgment by the parents are the child which may be regulated by lex situs, the personal law of the father governs.
necessary According to some civil law writers: personal law of the child should prevail, the argument
Orthodox common law theory states that: “the illegitimate could not be legitimated by any being that it is the welfare of the child that should be considered of prime importance. This is
supervening act.” 137 not an argument for the outright application of the child’s national law since it may even be
less favorable to the child than the father’s national law.
Philippine Law A posed Symmetrical solution is the Greek Civil Code providing for the relation between
Article 178. Legitmation shall take place by a subsequent valid marriage between parents. legitimate parents and their children dependent as follows:
The annulment of a voidable marriage shall not affect the legitimation. The national law that was last common to the father and the child
Article 177. Only children conceived and born outside of wedlock of parents who at the In the absence of such, upon the law of the father at the birth of the child
time of conception of the former, were not disqualified by any impediment to marry each If the father is dead, upon the last law common to the mother and the child
other, may be legitimated. In the absence of such, upon the law of the mother at the death of the father
Article 179. Legitimated children shall enjoy the same rights as legitimate children. Legitimacy once created under the personal law of the parent, either by the birth of the child
Article 180. The effects of legitimation shall retroact to the time of the child’s birth. or by legitimation is a permanent status. The nature and extent of the rights and duties, may
The Problem in conflicts of laws is choosing the system of law which shall determine whether be modified by a change of the personal law deemed to be decisive for the child’s status. The
legitimation has been effected or not. As matter of personal status, the personal law of the child’s legitimacy is immutable; but the incidents of his status are mutable.
parent is considered decisive in all legal systems. The National law of the father at the time
of marriage (or recognition in some legal systems) determines all questions involving COMPARATIVE ANALYSIS OF LEGITIMACY AND LEGITIMATION144
legitimation. One limitation is that where under the national law of the child his consent is Status
required to the legitimation, there is a decided tendency to apply the provisions of the child’s Legitimation may occur pursuant to several acts of the parent after birth. The subsequent
law, as a measure of protection to the child. marriage of parents is recognized as such an act in all of the states in the United States;145
however, in many states, acknowledgment of paternity is also required. Acknowledgment
Forms of Legitimation without marriage is sufficient in some states although the necessary form of acknowledgment
1. Legitimation from Birth.138 It happens that a child who at birth is apparently an illegitimate varies greatly. From such variations it becomes relevant to determine what state’s law is
child of his father may by a later event be legitimated from birth: for instance, by significant in determining whether a child is to be treated as having the character of
recognition of paternity by the father or by the marriage of the parents. legitimacy.
2. Legitimation by Subsequent Marriage.139 By a principle of the Canon law, the marriage of Domicile has a significant interest in the resolution of legitimacy cases. Where neither
the parents of an illegitimate child at any time after the birth of the child resulted in parent nor child is domiciled in the sate by the law of which legitimation is claimed to have
legitimating it ex post facto form the moment of birth. occurred, the child usually would be treated as illegitimate.146 Where the parent and the child
3. Legitimation by Recognition.140 If the law of the state of domicile of either parent at the have been domiciled in a state from the time of the child’s birth, legitimation of the child
birth of the child provides for legitimizing that child from birth by recognition of according to the law of the state147 will be recognized everywhere.148 If the acts relied upon
paternity after birth, the child becomes the legitimate child of that parent from birth if for legitimation are insufficient by the law of both parties at all times, legitimacy will not
he subsequently recognizes the child while there domiciled. result.149 However, the child may still claim the right of inheritance without legitimation.
4. Legitimation after Birth. 141 A sovereign of the domicile of the parties may legitimate a An act sufficient for legitimation by the law of the father’s domicile legitimates the
natural born child at any time. offspring.150 Conversely, the law of the child’s domicile should suffice to legitimate the child,
5. Recognized Natural Child.142 A relation less that legitimation, that of recognized natural particularly when the parent has acknowledged the child in a manner or form sufficient under
child, may arise by the law of several European states, between a parent and natural the laws. The underlying reason is that the status of legitimacy is to be preferred to that of
child.
143
Salonga, 329.
136 144
Padilla, 187. EUGENE F. SCOLES AND PETER HAY, CONFLICT OF LAWS (1992 Second Ed.) p. 553
137 145
Salonga, 329. Krause, Illegitimacy, p. 14 to 17
138 146
Beale. Smith v. Kelly’s Heirs, 23 miss. 167, 55 Am.Dec. 87 (1851); Eddie v. Eddie, 8 N.D. 376, 79 N.W. 856 (1899)
139 147
Id. Estate of Baker, 105 Misc.2d 365, 432 N.W.S.2d 78 (1980)
140 148
Id. Peirce v. Peirce, 379 Ill. 185, 39 N.E.2d 990 (1942); Scott v. Key, 11 La.Ann. 232 (1956)
141 149
Id. In re: Bassi’s Estate, 234 Cal.App.2d 529, 44 Cal.Rptr. 541 (1965)
142 150
Beale. Restatement, Second, Conflict of Laws. Sec. 287; Pfeifer v. Wright, 41 F.2d 464 (10th Cir. 1930)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
28
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
illegitimacy and that no countervailing issues of fairness to the parent arise when the parent At common law, an illegitimate child inherited from no one; by statute, however, most states
has done some affirmative act.151 granted inheritance rights to such a child with respect to its mother, but rarely as against the
father.162 A number of decisions by the United States Supreme Court have now substantially
Inheritance Rights of Legitimate and Legitimated Children equalized the rights of the illegitimate and legitimated children.
Olmsted v. Olmsted152 – the United States Supreme Court held that the Full Faith and Credit According to Levy163 and Glona164, the court permitted children born out of wedlock to sue
Clause does not require states to recognize a foreign status of legitimacy for purposes of in wrongful death for the loss of their mother and , likewise, for a mother to bring such an
inheritance of local land. Inheritance rights are thus incidents of the status to be determined action for the loss of her child. Lower court decisions interpreted Levy and Glona to
by local succession laws. Despite this technical distinction, it now seems established that “ a “require equality between marital and nonmarital children in their legal relationship with
state will give the same incidents to the status of legitimacy created by a foreign law . . . that their fathers,”165 as well as mothers including inheritance rights.
it gives to the status when created by its own law. . .153 A different question arises in the case of testate succession. Since the testator was free to
2 important California decisions have taken a wide view in favor of legitimacy and provide or not to provide for any of his children, the testator’s use of the words “children”
accompanying inheritance rights: or “issue” must therefore be construed to include or to exclude children born out of
In re Lund’s Estate 154 extended the rights of a pre-termitted legitimated child to a child wedlock. At least tin the case in which the testator’s paternity was established in his lifetime,
acknowledged by his father at times when neither the law of the child’s or of the father’s the principles of Lalli v. Lalli166 would seem to require an inclusive construction.167 The same
domicile would legitimate but which acknowledgments would have been sufficient in result should obtain when state law grants “children: a statutory share or support allowance.
California where the father died domiciled.
In In re Bassi’s Estate155 the court, following Lund, again found that legitimation was to be ADOPTION
determined in accordance with California law, as the law of the decedent’s domicile at death, DEFINITION – Adoption has been defined as “the process which creates the relation of
regardless of whether the parent’s acknowledgment was sufficient to create that status of parent and child between persons who are strangers in blood.”168 The Second Restatement
legitimacy at the time or place where made: “there is nothing which precluded the defines adoption as: “the process whereby the adoptive parent is substituted for the natural
application of the laws of succession of this sate, as interpreted in the light of local statutes parents.”169 However, as pointed out by Salonga, such definitions do not encompass
and policy governing the determination of legitimacy, so as to permit inheritance . . .” 156 adoptions by parents of their own children. Pursuant to this, he gives a more accurate
Thus, “the factual status between the father, the decedent, and claimants, having once been definition: “an act which renders a child legitimate in relation to the adopting parents, to
established it follows the decedent to California. The claimants are entitled to inherit whom the child may or may not be related.”170
through their father, not only as heirs of his estate if he had died here, but also form their 1. To effect an adoption, there must be a formal legal act or process, and not simply by
half-brother or other paternal relatives who do leave estate here.”157 contract or compromise. Authors further emphasize this when they state that since adoption
is unknown in common law, it can only be effected by strict compliance to the terms of some
Illegitimate Children statute.171
One who is born at a time when his parents, though alive, are not married to each other.158 2. The relationship created makes the adoptee a legitimate child of the adopter(s); and, such
Such child however is legitimate if they were married after his conception and before his relationship is strictly bound between such parties only by legal fiction.
birth.159 3. Adoption is seen as to affect the status of the said parties; hence, governed by lex
In most countries, the personal law of the mother – nationality or her domicile – governs for domicilii.172
illegitimate children. Some countries refer the matter to the personal law of the child. For These inferences make one to conclude that a conflict of laws issue would arise when the
the United States, lex fori not the personal law is considered decisive. In England, only English prospective adopters and adoptee are domiciled in different states. In such a case, there is an
law is applied and then only if the child is born in England or, if born abroad, of English issue with respect to (1) choice of law, (2) the court’s jurisdiction to grant an adoption, and
parents.160 (3) effects of adoption.

Inheritance Rights of Illegitimate Children161 CHOICE OF LAW

162
Krause, Equal Protection for the Illegitimate, 65 Mich. L. rev. 477, 487 (1967)
151 163
Restatement, Second, Conflict of Laws. Sec. 287; In re Spano’s Estate, 49 N.J. 263 Levy v. Leouisiana, 391 U.S. 68, 88 S.Ct. 1509, 20 L.Ed.2d 436 (1968)
152 164
216 U.S. 386, 30 S.Ct. 292, 54 L.Ed. 530 (1910) Glona v. American Guarantee & Liability ins. Co., 391 U.S. 73, 88 S.Ct. 1515, 20 L.Ed.2d 441 (1968)
153 165
Restatement, Second, Conflict of Laws, Sec. 288, the rule applies equally to succession to land and to personality. Krause, Child Support in America: The Legal Perspective 124 and 119 et seq. (1981)
154 166
26 Cal.2d 472, 159 P.2d 643 (1945) 439 U.S. 259, 99 S.Ct. 518, 58 L.Ed.2d 503 (1978)
155 167
234 Cal.App.2d 529, 44 Cal.Rptr. 541 (1965) Restatement, Second, Conflict of Law Sec. 288
156 168
234 Cal.App.2d at 553, 44 Cal.Rptr. at 555 (1965) Eugene F. Scoles and Peter Hay, Conflict of Laws 559 (1992 Second Ed.); Herbert F. Goodrich and Eugene F. Scoles, Conflict of Laws
157
234 Cal.App.2d at 55o, 44 Cal.Rptr. at 553 (1965) Hornbook Series 288 1964.
158
Black’s Law Dictionary (6th ed.). p. 747 169
Introductory Note, Second Restatement, Section 298
159 170
Home of Holy Infancy v. Kaska, Tex., 397 S.W.2d 208. Salonga, 329.
160 171
Salonga, 329. Beale, 713.
161 172
EUGENE F. SCOLES AND PETER HAY, CONFLICT OF LAWS (1992 Second Ed.) Coquia and Elizabeth Aguiling-Pangalangan, 292.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
29
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Some writers assert that choice of law is an issue in conflict of laws.173 As Coquia points out In support for the concurrent jurisdiction, some writers assert that the best interest of the
the choice of law becomes a conflict rules issue with regard to the potential adoptee’s best child cannot be prejudiced by parties’ the inability to find a court with proper jurisdiction. As
interest. As will be later explained, the adoptee’s interest and welfare shall be paramount; as asserted by Scoles:179 Adoptions at the domicile of the child, through voluntary acts of the
such, adoption “laws should be construed liberally, in a manner that will sustain rather than adopting parents performed there, has been held valid both in the state of adoption180 and
defeat the purpose… [but it] cannot be sustained when to do so would violate the elsewhere,181 even where the adoptive parents had no domicile within the state. Decisions
proscription against judicial legislation”174 denying jurisdiction to adopt upon these facts182 seem to be based upon interpretation of a
Others assert that it’s a non-issue. 175 Scoles, while affirming the issues of jurisdiction and particular statute, rather than upon any general principle of jurisdiction.
effects of adoption, points out that “choice of law issues are not involved in the adoption Beale, on another perspective on the matter of jurisdiction, asserts that the action must be
itself as the court applies the law of the forum.”176 However, upon discussing international with the domicile shared by both potential adopters and adoptee. This is founded on the
adoptions, he makes express mention contrary to the aforequoted: The applicable law is not effect of adoption, the change of status between the parties. It is only the court with
that of the forum, but the personal law of the adopter or child. The personal law of the jurisdiction over both parties that may alter their respective statutes.183 However, based on
adopter may govern the prerequisites of adoption, while the personal law of the child is the discussion on jurisdiction, Beale seems to center more on the change of status rather
applicable in some jurisdictions for the question of whose consent to adoption is than the would-be adoptee’s best interest.
necessary.177
EFFECT OF ADOPTION
Would be Adopter and Adoptee Governing Law
Scoles makes mention that personal laws of the would-be adopter and adoptee have to be The effect of an adoption depends on two orders depending on which law governed the
taken into consideration. The former will determine the would-be adopter’s eligibility to creation of adoption:
adopt; while the latter will determine the would-be adoptee’s eligibility to be adopted. (1) if the adopter’s personal law effected the adoption, the same law governs the effects of
He likewise points out, as do other authors, that there is diversity in requisites among states. adoption; (2) if the adoptee’s personal law effected the adoption, such law shall cease to
Some of these requisites are: govern the adopter-adoptee relationship, yielding to the adopter’s personal law to govern
1. Consent of the would-be adoptee’s natural parents or guardian to the proposed the effects of adoption.184
adoption The question of the decree’s effect arises most often in the context of succession and is
2. Consent of the would be-adoptee, if he has already reached a certain age. The said age governed by the law applicable to the succession, i.e., in most cases the law of the decedent’s
ranges from 10 to 21 years of age domicile at death. In most cases, the decree will have the same effect as a local decree.185
3. The would-be adopter(s) must be of minimum age, such ranging from 18 to 50 years old
4. The would be adopters and adoptee must have a minimum age differential, ranging from In Succession
10 to 30 years In some jurisdictions, a decree of adoption extinguishes all successional rights prior to the
5. The limitation of (a) single sex adoptions, (b) the would-be adopters must have no other said decree and vests it with the adopter. This is present in English law and many United
children States state laws. Other jurisdictions limit the said effects of adoption. This is present in the
6. The condition of rescission of adoption upon subsequent birth to the adopter Philippines where the Family Code and Adoption Statutes provide the effects of an adoption
decree. Despite the varying difference between states, “practically all legal systems makes the
JURISDICTION child legitimate in relation to the adopting parents.”186
Some writers assert that the interest and welfare of the child is best served by following the The effects adoption is separate and distinct if made into a substantial issue in a given
adoptee’s personal law. controversy. Succession is one such case – whether or not an adoptee may inherit from his
However, as Coquia states, such argument is inherently weak since: biological parents.
(1) it does not encompass situations wherein the adoptee does not actually reside The effect of an adoption is also in issue when the adopted child claims inheritance rights
(constructive domicile or nationality) in the forum’s state, thus, the forum would have little from its natural parents. Again, the issue will be decided by the applicable local succession
basis to protect the adoptee’s interest; and law.187 With respect to the substantive issue, the courts are split: some view the adoption
(2) the adopter’s personal law, as compared to the adoptee’s laws, may provide a better
protection for the adoptee’s interest and welfare.178 In the case of the latter, the adopter’s 179
Eugene F. Scoles and Peter Hay, Conflict of Laws 560 (1992 Second Ed.); Goodrich and Scoles, 289.
jurisdiction has been considered either exclusively or concurrently. 180
Scoles citing Appeal of Wolf, 13 A. 760, 10 Sad. 139 (Pa. 1888). See Martinez v. Reed, 490 So.2d 303 (La.App. 1986)
181
Scoles citing Van Matre v. Sankey, 148 Ill. 536, 36 N.E. 638 (1893)
182
Scoles citing Foster v. Waterman, 124 mass. 592 (1878)
173 183
Ibid. Beale, 714.
174 184
Ruben E. Agpalo, Conflict of Laws (Private International Law) 284 (2004 ed.). Coquia and Elizabeth Aguiling-Pangalangan, 292.
175 185
Restatement, Second, Conflict of Laws Sec. 289 (1971) Scoles citing Matter of Estate of Chase, 127 A.D.2d 415, 515 N.Y.S.2d 348 (1987)
176 186
Eugene F. Scoles and Peter Hay, Conflict of Laws 559 (1992 Second Ed.); Goodrich and Scoles, 288 Salonga, 329.
177 187
Ibid, p563; Ibid 283. Scoles citing Pazzi v. Taylor, 342 N.W.2d 481 (Iowa 1984) (law of decedent’s domicile at death governs issue whether natural son,
178
Coquia and Elizabeth Aguiling-Pangalangan, 292. adopted by stepfather out-of-state, inherits)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
30
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
as effecting a complete substitution of the adoptive parents for the natural parents thus remedies to maintain the adoptee with the natural parents or guardian, if known; thus,
severing all links and ending all inheritance claims, 188 while others preserve the right to requiring the latter to undergo counseling and to provide consent for the proposed
inherit from or through the natural parents.189 adoption. Finally the paramount consideration is emphasized by requiring the would-be
adopters to submit documents, such as certifications: (a) to allow the adoptee to enter the
Foreign Judgment and Recognition country of the adopter; (b) to show the adopter’s capacity to adopt in his own country; and,
Aside from the similarity in governing law, there are two more incidents that remain the (c) by the government or appropriate office or agency that the adopter is able to discharge
same, namely: (1) a decree of adoption is in effect a form of a foreign judgment; and, (2) emotional, financial and psychological parental authority over the adoptee.197 It would appear
principles on recognition and enforcement of such foreign judgment shall govern.190 As Beale that the Philippines adheres to both the personal laws of the would-be adopter and adoptee,
states: while applying the forum’s procedural law.
An adopted child, the status once having been created by the requisite legal form, remains As mentioned by Scoles, there is diversity in requisites for adoption. In the PhilippinesAs held
such in spite of change of residence or domicile.191 He will be treated in every other state in Armstrong v. Manzo,198 failure to notify or obtain the consent of the natural parents of the
than the one in which he was adopted just as adopted children are treated in such other adoptee is a serious defect to the proceeding.
state; that is, if adopted children are recognized by its law he will be regarded there as an
adopted child,192 while if its law does not recognize the status of adoption he will there be Capacity of Aliens to Adopt
treated like a stranger in blood.193 The current adoption law has reverted to the former policy, favoring alien capacity, to wit:
Section 4(2). Any alien possessing the same qualifications as above-stated for Filipino
PHILIPPINE CONTEXT nationals: Provided, That his country has diplomatic relations with the Republic of the
The Philippines adheres to Salonga’s definition of adoption. It has been consistently held in Philippines, that he has been living in the Philippines for at least three (3) continuous years
Philippine law that a foreign citizen may adopt a relative, provided that (a) the foreign citizen prior to the filing of the petition for adoption and maintains such residence until the adoption
was formerly a Filipino citizen; and (b) the relative to be adopted qualifies with accordance to decree is entered, that he has been certified by his diplomatic or consular office or any
law (degree of consanguinity and/or affinity). Adoption cases likewise follow lex domicilii as the appropriate government agency to have the legal capacity to adopt in his country, and that
law requires a foreign national to have resided in the Philippines for at least 3 continuous his government allows the adoptee to enter his country as his adopted child. Provided,
years prior to filing the petition for domestic adoption;194 moreover, the said petition ought further, That the requirements on residency and certification of the alien’s qualification to
to be filed with the Family Court where the petitioners reside.195 adopt in his country may be waived for the following:
a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
CHOICE OF LAW consanguinity or affinity; or
In the Philippines a valid adoption must have a court decree predicated from a judicial one who seeks to adopt the legitimate child of his Filipino spouse; or
proceeding. There is no adoption pursuant to an agreement or contract. The adoption one who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative
procedure followed by the Philippine courts considers paramount the best interest of the within the fourth (4th) degree of consanguinity or affinity of the Filipino spouse.199
would-be adoptee, with due consideration for the would-be foreign adopters’s laws. The In the event the foreigner would be adopter, formerly a Filipino citizen, would want to adopt
paramount consideration of the would-be adoptee’s interest and welfare is seen in the a Filipino relative by consanguinity, it has been held that the courts are justified in applying
objectives stated in law.196 Another aspect of the adoptee’s best interest is the exhaustion of Philippine laws with respect to procedural and substantial issues.200

188
Scoles citing Shehady v. Richards, 83 N.M. 311, 491 P.2d 528 (1971)
189
Scoles citing Go International Inc. v. Lewis, 601 S.W.2d 495 (Tx.Civ.App. 1980)
190
Coquia and Elizabeth Aguiling-Pangalangan, 297.
191
Beale citing Woodward’s Appeal, 81 Conn. 152, 70 A. 453 (1908)
192
Beale citing Van Matre v. Sankey 148 Ill. 536, 36 N.E. 628, 23 L.R.A. 665, 39 A.S.R. 196n (1893) ii. safeguard the biological parents from making hasty decisions in relinquishing their parental authority over their child;
193
Beale citing Brown v. Findley, 157 ala. 424, 47 S. 577, 21 L.R.A. (N.S.) 679, 131 A.S.R. 68, 16 A.C. 779 (1908) iii. prevent the child from unnecessary separation from his biological parents;
194
Republic Act No. 8552, Section 7(b). iv. conduct public information and educational campaigns to promote a positive environment for adoption;
195
AM No. 02-06-02-SC, Section 6. v. ensure that government and private sector agencies have the capacity to handle adoption inquiries, process domestic
196
AM No. 02-06-02-SC dated July 31, 2002 adoption applications and offer adoption-related services including, but not limited to, parent preparation and post-
SEC. 2. Objectives. – adoption education and counseling;
(a) The best interests of the child shall be the paramount consideration in all matters relating to his care, custody and adoption, in vi. encourage domestic adoption so as to preserve the child’s identity and culture in his native land, and only when this is not
accordance with Philippine laws, the United Nations (UN) Convention on the Rights of the Child, UN Declaration on Social and available shall inter-country adoption be considered as a last resort; and
Legal Principles Relating to the Protection and Welfare of Children with Special Reference to Foster Placement and Adoption, vii. protect adoptive parents from attempts to disturb their parental authority and custody over their adopted child.
Nationally and Internationally, and the Hague Convention on the Protection of Children and Cooperation in Respect of Inter- Any voluntary or involuntary termination of parental authority shall be administratively or judicially declared so as to establish the status of
country Adoption. the child as “legally available for adoption” and his custody transferred to the Department of Social Welfare and Development or to any
(b) The State shall provide alternative protection and assistance through foster care or adoption for every child who is a foundling, duly licensed and accredited child-placing or child-caring agency, which entity shall be authorized to take steps for the permanent placement
neglected, orphaned, or abandoned. To this end, the State shall: of the child.
197
i. ensure that every child remains under the care and custody of his parents and is provided with love, care, understanding Republic Act No. 8552; AM No. 02-06-02-SC dated July 31, 2002
198
and security for the full and harmonious development of his personality. Only when such efforts prove insufficient and no Armstrong v Manzo, 380 US 545, S. Ct. 1187 (1965).
199
appropriate placement or adoption within the child’s extended family is available shall adoption by an unrelated person be Republic Act No. 8552; AM No. 02-06-02-SC dated July 31, 2002
200
considered. People v Toledano, G.R. No. 94147, June 8, 1994.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
31
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Jurisdiction
Philippine laws do not require foreign-adopters to be residents of the Philippines. As shown With regard to Citizenship
in the Adoption Rules, 201 there are provisions for inter-country adoptions and domestic Philippine courts have declared that adoption relates to a civil right and does not affect
adoptions. Inter-country adoption rules govern foreign nationals and Filipino citizens changes in the political rights of the adopted child including the child’s eligibility to acquire
permanently residing abroad wishing to adopt Filipino adoptees.202 These rules state that an the citizenship of the adopter. 210 Adoption is not a means to acquire or dispense one’s
application for adoption may filed either with the Family Courts or directly to the Inter- Filipino citizenship.211
Country Adoption Board. For domestic adoptions, among the requisites that have to be
alleged and duly proved is at least three years203 residency.204 Ellis v Republic205 and Katancik v With regard to Succession and Inheritance
Republic206 are cases that exemplify a foreigner-adopter’s non-observance of the residency Philippine law follows the national law of the decedent for succession purposes:
requirement then applicable. “intestate and testamentary succession, both with respect to the order of succession and to
the amount of succesional rights… shall be regulated by the national law of the person
Effects of Adoption whose succession is under consideration, regardless of the nature of the property and
It is well recognized that the effects of adoption are: (a) creation of successional rights and regardless of the country wherein said property may be found”212
obligations between adopters and adoptee; and, (b) the parties are vested with rights, civil The succession of the adopted child to the estate of the adopters depends on where the
rights for the adopters, such as parental authority and the adoptee’s legitimacy, and the right forum is situated. If presented to Philippine courts, Article 16 of the New Civil Code shall be
to use the adopter’s surname for the adoptee.207 made applicable. The same rule applies when the adopted claims an inheritance from his
Art. 189. Adoption shall have the following effects: natural parents. On this point, there is a divergence of opinions: On one hand, it is stated
For civil purposes, the adopted shall be deemed to be a legitimate child of the adopters and that the adopted is an intestate heir to his biological parents by express provision of law.
both shall acquire the reciprocal rights and obligations arising from the relationship of parent Section 16 of the Domestic Adoption Law merely ceases the natural parents’ parental
and child, including the right of the adopted to use the surname of the adopters; authority and vests it to the adopters. Such provision cannot be considered as an implied
The parental authority of the parents by nature over the adopted shall terminate and be repeal of Articles 189-190 of the Family Code;213 On the other hand, it is also stated that the
vested in the adopters, except that if the adopter is the spouse of the parent by nature of the reciprocal rights and obligations to the biological parents have ceased and is established with
adopted, parental authority over the adopted shall be exercised jointly by both spouses; and regard to the adopters.214 Thus, the only manner in which the adoptee and his biological
The adopted shall remain an intestate heir of his parents and other blood relatives. parents may inherit from one another is through testamentary disposition. As Salonga points
out, the effect of harmonizing these two provisions yield to a dual gain for the adopted. He
With regard Foreign Adoptions may inherit both from his adoptive and natural parents.215
The Philippine recognizes the principle of foreign adoptions validly rendered and recognized
where effected. However, such foreign adoption is still subject to Philippine municipal law, SUCCESSION
i.e., the right to register the said adoption in the civil register.208 By way of exception, such • In Philippine jurisdiction the term “succession” has been defined as “the mode of
adoptions shall not be recognized in the Philippines when public policy or residents’ interest acquisition by virtue of which the property, rights and obligations to the extent of the
forbid its enforcement, thus demand the substitution of the lex fori.209 value of the inheritance, of a person are transmitted through his death to another or
others either by his will or by operation of law. “216
201
Republic Act No. 8552; AM No. 02-06-02-SC dated July 31, 2002
• A conflict of laws situation arises where there is a foreign element involved in a
202
AM No. 02-06-02-SC, Section 26. succession problem, as illustrated by this situation:
203
Agpalo notes that temporary absences for professional, business, health or emergency reasons not exceeding 60 days in one year does
not break the continuity requirement. He notes further that the law states “residence” thus the foreign would-be adopter need not be • Eulogio Lopez, a Filipino businessman, dies domiciled in California. He leaves real and
domiciled in the Philippines. Ruben E. Agpalo, Conflict of Laws (Private International Law) 292 (2004 ed.).
204
personal properties in various places: a house and lot in California, big parcels of land in
Republic Act No. 8552; AM No. 02-06-02-SC dated July 31, 2002: Section 4(2)
(2) Any alien possessing the same qualifications as above-stated for Filipino nationals: Provided, That his country has diplomatic relations
Metro Manila and suburbs, substantial shares of stock in a number of multinational
with the Republic of the Philippines, that he has been living in the Philippines for at least three (3) continuous years prior to the filing of the corporations, and considerable bank deposits in Manila and New York. 217
petition for adoption and maintains such residence until the adoption decree is entered, that he has been certified by his diplomatic or
consular office or any appropriate government agency to have the legal capacity to adopt in his country, and that his government allows the
adoptee to enter his country as his adopted child. Provided, further, That the requirements on residency and certification of the alien’s
210
qualification to adopt in his country may be waived for the following: Coquia and Elizabeth Aguiling-Pangalangan, 297.
(i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of 211
Ching Leng v Galang, G.R. No. L-11931, October 7, 1958
212
consanguinity or affinity; or New Civil Code, Article 16.
213
(ii) one who seeks to adopt the legitimate child of his Filipino spouse; or Ibid.
214
(iii) one who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within the fourth Republic Act No. 8552, “Domestic Adoption Law of 1998”
(4th) degree of consanguinity or affinity of the Filipino spouse. Sec. 18. Succession. — In legal and intestate succession, the adopter(s) and the adoptee shall have reciprocal rights of succession without
205
G.R. No. L-16922, April 30, 1963. This case law has been superseded by the Child and Youth Welfare Code or PD 603. distinction from legitimate filiation. However, if the adoptee and his/her biological parent(s) had left a will, the law on testamentary
206
G.R. No. L-15472, June 30, 1962 succession shall govern.
207 215
Salonga, 333-334. Salonga, 334-335.
208 216
Mercida v Aglubay, 12 SCRA 1033 (1962) New Civil Code, Article 774.
209 217
Ruben E. Agpalo, Conflict of Laws (Private International Law) 278 (2004 ed.). Salonga, 503.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
32
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• In this situation, two questions arise: (1) What law/s determine who will succeed, to • Applying the split system to Eulogio’s problem, the land in California will be regulated
what extent, to Lopez’s assets? (2) Does it matter whether proceedings for the by California law while the land in the Philippines will be regulated by Philippine law.
administration of the Lopez estate take place in California, his domicile at the time of The personalty will be regulated by law of his last domicile, that is, California law.
his death, or in the Philippines, his country?218
Theories SUCCESSIONAL RIGHTS AND CAPACITY TO SUCCEED
2 divergent ideas: Philippine Conflicts Rules
(1) universal succession/unitary system and In intestate and testamentary successions, the national law of the decedent governs the order
(2) split/division system.219 of succession, amount of successional rights and intrinsic validity of testamentary provisions,
• The universal succession or unitary system assumes that the individuality of the whatever may be the nature of the property and regardless of the country wherein said
decedent continues to exist after his death in the person of his heir, for juridical property may be found228, as well as capacity to succeed.229 The rights to the succession of a
purposes.220 Thus, whatever personal law governed the decedent governs succession person are deemed transmitted from the moment of death. The Philippine view that the
to his entire estate after his death.221 The national law of a decedent whose country of entire property of the deceased passes directly to the heirs, testate or intestate, has its origin
nationality adopts the nationality principle applies while the domiciliary law of the in Roman Law and is observed in civil countries in Europe 230
decedent whose country of domicile adopts domiciliary principle. 222 Countries that
follow this system include Italy, Spain and the Philippines. Philippine conflicts rule on Civil law and common law conflicts rules
succession has a civil law derivation, but rules on probate of wills and the settlement Under the common law system, in so far as personalty is concerned, distribution of the
and administration of estates are Anglo-American in origin.223 decedent’s property is governed by the law of the last domicile of the decedent at the time
• Applying the universal system to the problem of Eulogio Lopez, if the proceedings are of death.231 As regards immovable property, the proper law is the lex situs.232 Moreover, in
instituted in the Philippines, a Philippine court will hold that the Philippine law will English law, no such transmission of successional rights upon death occurs. The only person
govern the succession to his properties as provided under paragraph 2 of Article 16 of entitled to deal with the property is he who has been granted the right of administration by
the Civil Code224.225 public authority i.e., either the executor or administrators.233
• On the other hand, the split or division system has its roots in the feudalistic system of
law. Under that system, feudal lords could not permit the rights of succession to their CAPACITY TO SUCCEED
land to be affected should their vassals acquire a foreign domicile.226 Thus, the split Philippine Conflicts Rules
system seeks to distinguish between immovables and movables. Countries that adopt Article 1039 of the Civil Code provides that capacity to succeed is governed by the national
this system are England, US and France.227 In the US, succession to land upon the law of the decedent. Persons not incapacitated by law may succeed, be it by will or by
death of the owner is governed by the law of the place where the land is situated, while intestacy.234 In order to be capacitated to inherit, paragraph 1 of Article 1025 of the Civil
the devolution of personalty is governed by the law of the domicile of the testator at Code provides that the heir, devisee or legatee must be living at the moment the succession
the time of his death. opens, except in case of representation, when it is proper. However, a child already
• According to the Second Restatement, lex situs should be applied in succession to land conceived at the time of the death of the decedent is capable of succeeding provided it be
because the state of the situs has an obvious interest in having interests in local land born later under the conditions prescribed in Article 41.235
decided in a manner that complies with its notion of what is reasonable and just. On The national law of the decedent governs such questions as to whether a given person is
the other hand, the law of the domicile should be applied to movables because it is unworthy to succeed on the ground of certain crimes committed by him against the
desirable insofar as an estate would be treated as a unit, and the state that has the deceased, whether a corporation or an unborn child can acquire property by succession, and
dominant interest in the application of its laws is the state of the decedent’s domicile at whether an heir can validly renounce his rights to succession by a solemn agreement of
the time of his death. The domicile law is the law which the decedent is most familiar renunciation executed between the heir and the deceased during the latter’s lifetime. 236
with and its application coincides with the expectations of the decedent and his family.

218
Id.
219
Id.
220 228
Id at 504. New Civil Code, Art. 16 (2).
221 229
Id at 503. Id, Art. 1039.
222 230
Salonga, 504. Salonga, 518.
223 231
Id at 518. Minor, 328 as cited in AMBROSIO PADILLA, CONFLICT OF LAWS (PRIVATE INTERNATIONAL LAW) OF THE PHILIPPINES 263 (1976 edition).
224 232
Par. 2 of Article 16 of the New Civil Code provides: However, intestate and testamentary successions, both with respect to the order of Padilla, 264.
233
succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national Salonga, 518.
234
law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country New Civil Code, Art. 1024 (1).
235
wherein said property may be found. Article 41 of the Civil Code provides: Art. 41. For civil purposes, the fetus is considered born if it is alive at the time it is completely
225
Salonga, 505. delivered from the mother's womb. However, if the fetus had an intra-uterine life of less than seven months, it is not deemed born if it dies
226
Id at 506. within twenty-four hours after its complete delivery from the maternal womb. (30a)
227 236
Id at 504. Bellis v. Bellis 20 SCRA 358.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
33
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• Aznar v. Christensen Garcia237 – the testator was an alien domiciled in the Philippines but intervention of a notary public and participation of attesting witnesses242 while a holographic
who had always considered himself a citizen of California. He had an acknowledged will is a will that is entirely written, dated and signed by the hand of the testator himself.243
natural daughter, a Filipino citizen, who contended that under Art. 16 par. 2, California
law should be applied but under California law, the matter is referred back to the Extrinsic or formal validity
domicile i.e., Philippine law such that the share of the daughter must be increased in Philippine conflicts rules
view of the successional rights of illegitimate children under Philippine law. The Extrinsic or formal validity refers to requirements of writing, of attesting witnesses, and of
counsel for the other sister who was named by the testator as the only heir, acknowledgment.244 It also refers to testamentary capacity. The validity of a will as to its form
contended that under Art. 16 par. 2, the national law of the deceased must apply, and depends upon the observance of the law in force at the time it is made.245
that under California law, there are no compulsory heirs, the testator being completely Under Philippine internal law, legal capacity of persons, including testamentary capacity is
free to dispose of his property in absolute dominion. Since illegitimate children not governed by the national law of the decedent.246 Under the Civil Code of the Philippines,
being entitled to anything under California law, the will of the testator giving the bulk of those who have testamentary capacity are: all persons not expressly prohibited by law may
the property to her must remain undisturbed. The issue raised was whether or not an make a will,247 who may be of either sex but not under eighteen years of age248 and must be
acknowledged natural daughter of the testator --- an alien domiciled in the Philippines of sound mind at the time of the execution of the will.249
but who had always considered himself a citizen of California --- was entitled to In Philippine conflicts law, the general rule is that the extrinsic validity of a will is governed by
succeed under internal Philippine law. The Supreme Court stated that there are two the laws of the country in which it is executed.250 The general rule is modified by the liberal
rules in California on the matter: internal law and conflicts laws. The Court quoted Art. provision of the Civil Code of the Philippines with respect to extrinsic validity of wills.251
946 of the California Civil Code: “If there is no law to the contrary in the place where This rule is modified in the Philippines as to permit a will: (a) by a Filipino in a foreign
personal property is situated, it is deemed to follow the person of its owner and is country; (b) by an alien abroad; (c) by alien in the Philippines.252
governed by the law of his domicile.” When a Filipino is in a foreign country, he is authorized to make a will in any of the forms
Christensen, being domiciled outside California, the law of his domicile (Philippines) established by the law of the country in which he may be, and such will may be probated in
ought to be followed. The Court held that were it to throw the matter back to the Philippines. 253 Thus, in this instance, the rule followed is lex loci celebrationis seen in
California, the problem would be tossed back and forth between the states concerned Article 17.254
resulting in “international football.” It remanded to the lower court for determination The will of an alien who is abroad produces effect in the Philippines if made with the
of successional rights under Philippine internal law. formalities prescribed by the law of the place in which he resides, or according to the
Civil law and common law conflicts rules formalities observed in his country, or in conformity with those which the Civil Code
In the US, the law of the state where the land is determines who is heir, and his interests, prescribes.255
duties and liabilities.238 Questions concerning a will disposing of personal estate at the death A will made in the Philippines by a citizen or subject of another country, executed in
of the owner are in general, governed by the law of the decedent at the time of his death; accordance with the law of the country in which he is citizen or subject, and which might be
this is applicable to questions of capacity, forms, substantive, validity and construction. 239 proved and allowed by the law of his own country, shall have the same effect as if executed
Capacity to receive a legacy is ordinarily governed by the law of the domicil of the testator at according to the laws of the Philippines.256
his death.240
242
Validity of wills New Civil Code, Arts. 804-809.
243
Id, Art. 810.
A will is a personal, solemn, revocable and free act by which a capacitated person disposes of 244
Salonga, 518.
245
his property and rights and declares or complies with duties to take effect after his death. It is New Civil Code, Art. 795.
246
Article 15 of the Civil Code provides: Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of
essentially ambulatory such that at any time prior to the testator’s death, it may be changed persons are binding upon citizens of the Philippines, even though living abroad. (9a)
247
or revoked. Until admitted to probate, it has no effect whatever and no right can be claimed New Civil Code, Art. 796 .
248
Id, Art. 797.
thereunder, the law being explicit. A will is a specie of conveyance whereby a person is 249
Id, Art. 798.
250
permitted, with the formalities prescribed by law, to control to a certain degree the Art. 17 par. 1 of the Civil Code provides: Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.
disposition of his estate after his death.241 In Philippine internal law, there are two kinds of 251
Salonga, 519.
252
wills: (a) notarial will and (b) holographic will. A notarial will is executed with the Padilla, 281.
253
New Civil Code, Art. 815.
254
Art. 17 Civil Code provides: Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by
the laws of the country in which they are executed.
When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country,
the solemnities established by Philippine laws shall be observed in their execution.
237
7 SCRA 1957. Prohibitive laws concerning persons, their acts or property, and those which have, for their object, public order, public policy and good
238
Restatement of Law, p. 329 as cited in Padilla, 265. customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign
239
Goodrich, 377 as cited in Padilla, 279. country. (11a)
240 255
Beale, 1036. New Civil Code, Art. 816.
241 256
Agpalo, 167. Id, Art. 817.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
34
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• It has been held that where a foreign decedent who made his will in the Philippines
Civil law and common law conflicts rules stated that his property be distributed in accordance with Philippine law and not that of
The formal validity of wills of personalty is determined by the law of the last domicile of the his country, the disposition of the property in his will should be made in accordance
testator at the time his death. 257 In particular, the same law determines the capacity of the with his national law and that the provision of the will is invalid as it is against Article 16
testator to bequeath personalty.258 All formal requirements of a will of real property must of the Civil Code.262
satisfy the law of the state of situs of the land.259 Under Philippine conflicts rule, two or more persons cannot make a will jointly, or in the
same instrument.263 A joint will264 executed by Filipinos in a foreign country shall not be valid
Intrinsic validity in the Philippines, even though authorized by the laws of the country where they may have
Philippine Conflicts Rules been executed.265 The law is silent, however, about joint wills executed in the Philippines by
Paragraph 2 of Article 16 of the Civil Code provides that the intrinsic validity of testamentary aliens whose national laws do not prohibit it.266
provisions is governed by the national law of the decedent, whatever may be the nature of The rules on extrinsic and intrinsic validity in Philippine conflicts rules may be summarized as
the property and regardless of the country wherein said property may be found. follows:267
• Cayetano v. Leonidas,260 – Adoracion Campos was an American citizen and a permanent • Extrinsic – refers to requirement of form
domiciliary of Philadelphia, Pennsylvania, at the time of her death. Prior to her death, • Governing law as to time
while in Manila, she executed a last will and testament in Philadelphia. The will was • Filipinos – law in force when the will was executed (Art. 795)
admitted and granted probate by the probate court of the Commonwealth of • For foreigners – same rule (assuming it’s being probated here)
Pennsylvania. It was also allowed probate in the Philippines two years after her death, • Governing law as to place
on the petition of her sister. Petitioner Cayetano contended that Hermogenes • Filipinos – law of citizenship, domicile, residence, place of execution, Philippine law
Campos, Adoracion’s father and a forced heir, was divested of his legitime under (Articles 815-817)
Campos’ will and that therefore, Pennsylvania law which allows her to giver her estate
• Foreigners –same choices
away to a complete stranger should not apply “because it would run counter to the
• Intrinsic – refers to substance of the provisions
specific provisions of Philippine law.” The lower court applied the law of Pennsylvania.
The Supreme Court, in affirming the order of the lower court, said that “it is a settled • Governing law as to time
rule that as regards the intrinsic validity of the provisions of the will, as provided by • Filipinos – law as of the time of death (Art. 2263)268
Art. 16(2) and 1039 CC, the national law of the decedent must apply. • Foreigners – depends on their personal law (Art. 16, par. 2)
• Bellis v. Bellis,261 – Amos G. Bellis was a citizen and domiciliary of Texas at the time of • Governing law as to place:
his death. He executed 2 wills: one disposing of Texas properties and the other • Filipinos – Philippine law (Art. 16, par. 2; 1039)
disposing of Philippine properties. Both wills did not make any provision for his • Foreigners – their national law (Art. 16, par. 2; 1039)
recognized illegitimate children. Under Texas law, there are no compulsory heirs and
therefore there are no legitimes. Bellis’ illegitimate children opposed the will and Civil law and common law conflicts rules
argued that they have been deprived of their legitimes under Philippine law and that by Under American and English rule, substantial validity of a will is determined by the law of the
executing two wills, the decedent intended Philippine law to govern the Philippine testator’s domicile at the time of his death as regards personal property.269 This rules rests
estate. The Supreme Court held that the said children were not entitled to their on the presumed intention or preference of the testator for the application of the law of his
legitimes, since under Texas law, the decedent’s national law, there are no legitimes. domicile, since the domicile represents the legal system with which he is most familiar.270 On
The renvoi doctrine cannot apply either since the doctrine is usually pertinent where
the decedent is a national of one country, and a domiciliary of another. In the present
case, Bellis was a national and domiciliary of Texas at the time of his death. If Texas 262
Miciano v. Brimo 50 Phil 867.
has a conflicts rule adopting the situs theory calling for the application of the law of the 263
New Civil Code, Art. 818.
264
A joint will is one document which constitutes the wills of two or more individuals and is prohibited for several reasons: limitation on the
place where the properties are situated, renvoi would arise since the properties here modes of revocation, diminution of testamentary secrecy, danger of undue influence (RUBEN F. BALANE, JOTTINGS AND JURISPRUDENCE IN
involved are found in the Philippines. However, in the absence of proof as to the CIVIL LAW (SUCCESSION) 141 (Revised Edition 2000).
265
New Civil Code, Art. 819.
conflict of law rule in Texas, it should not be presumed different from ours. 266
Coquia and Elizabeth Aguiling-Pangalangan.
267
Balane, 41.
268
Art. 2263. Rights to the inheritance of a person who died, with or without a will, before the effectivity of this Code, shall be governed by
the Civil Code of 1889, by other previous laws, and by the Rules of Court. The inheritance of those who, with or without a will, die after
the beginning of the effectivity of this Code, shall be adjudicated and distributed in accordance with this new body of laws and by the Rules
257
Minor, 344 as cited by Padilla, 280. of Court; but the testamentary provisions shall be carried out insofar as they may be permitted by this Code. Therefore, legitimes,
258
Minor, 136-137 as cited in Padilla. betterments, legacies and bequests shall be respected; however, their amount shall be reduced if in no other manner can every compulsory
259
Beale, 171 Padilla, 280. heir be given his full share according to this Code. (Rule 12a)
260 269
129 SCRA 522 (1984). Minor, 335 as cited in Padilla, 291; Beale, 1034.
261 270
20 SCRA 358 (1967). Goodrich and Scoles, 332.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
35
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the other hand, the substantial validity of a will disposing real property is determined by the intrinsic validity of the provisions of the will. There is no period for prescription for
law where the same is situated.271 the probate of will. 280
• Philippine law follows the American rule, in that probate is a proceeding a proceeding
Revocation of wills in rem, and for the validity of such proceedings personal notice or notice by publication
Philippine conflicts rules or both shall be made to all interested parties.281
Under Philippine internal law, a will may be revoked by the testator either expressly or • A will executed abroad but not yet admitted to probate in a foreign country may be
impliedly because he has full ownership and control of the properties bequeathed during his admitted to probate in the Philippines. The due execution of the will and the
lifetime.272 A will may be revoked by means of the following modes: (1) by implication of law testamentary capacity of the testator must be proved as in regular probate
(2) by some will, codicil or other writing executed as provided in the case of wills (3) by proceedings.282
burning, tearing, cancelling, or obliterating the will with the intention of revoking it.273 • A will may be probated outside the Philippines under Rule 77 of the Rules of Court.283
Under Article 829 of the Civil Code of the Philippines, revocation made outside the When the will is allowed, it will have the same effect as if originally proved and allowed
Philippines by a person who does not have a domicile in this country is valid when done in the Philippine court.284
according to either of the following laws: (1) law of the place where will was made or lex loci • A will probated outside the Philippines may be reprobated in the Philippines. The
celebrationis (2) law of the place where testator had his domicile at that time or lex domicilii.274 evidence necessary of the reprobate or allowance in the Philippines are: (1) the due
Revocation made by a resident of the Philippines outside the Philippines is valid when it is execution of the will in accordance with the foreign law; (2) the testator has his
done according to either: (1) Philippine law or (2) the law of the place of revocation. domicile in the foreign country and not in the Philippines; (3) the will has been
admitted to probate in such country; (4) the fact that the foreign tribunal is a probate
Civil law and common law conflicts rules court; (5) the laws of a foreign country on probate and allowance of wills. Philippine
Revocation of a will of personalty is generally determined by the whole law of the domicile of courts cannot take judicial notice of the foreign laws upon which the probate of a
the testator at the time of his death.275 The lex situs governs the grounds of revocation of foreign country was done . In the absence of proof as to the probate law and
real property.276 procedure of a foreign country, it is presumed that the same is similar to that of the
A problem arises where a testator revokes his will in the state where he is domiciled and Philippines, in which case the validity of the foreign will may have to be decided in
then changes his domicile to another state where he dies. If the revocation of his will was accordance with Philippine law.285
valid by the laws of the state where he revoked it but invalid by the laws of the state of
domicile at the time of his death, which law will control? Under Philippine conflicts rule, the Civil law and common law conflicts rules
law of the place of revocation controls the situation.277 Under common law, the law of the • In the US, the will of a decedent will customarily be admitted to probate and an
domicile at the time of the testator’s death controls and not the law of the place of executor or administrator appointed in a state where the decedent was domiciled at
revocation.278 the time of his death; or where there are assets of estate at the time of the decedent’s
death or at the time of the appointment of the executor or administrator. 286 The
Probate of wills principal place of probate and administration of the will of a testator is normally at his
Philippine conflicts rules domicile – where the family and property interests center and usually those most
• Probate is the proof or establishment, before the appropriate tribunal, that the concerned with the decedent’s estate are located.287
document produced is the valid last will of the deceased. It is a certification of such • Furthermore, a will admitted to probate at the domicile of the decedent will be
court that the will was executed by a competent testator in the manner prescribed by recognized as valid elsewhere as to disposition of movables. Probate of a will in a state
law.279 Under Article 838 of the Civil Code, no will shall pass real or personal property other than the domicile of the decedent may be conclusive elsewhere as to the
unless it is proved and allowed with the Rules of Court. Just like in Anglo-American disposition of property in that state.288 The denial of probate elsewhere than at the
law, Philippine internal law provides that the probate of a will is conclusive as to its due domicile of the testator will govern as to its effect upon property in the state denying
execution and as to the testamentary capacity of the testator but does not affect the probate, but will not, in absence of litigation, affect the question of the validity of the

280
Salonga, 523.
271 281
Padilla, 291; Goodrich and Scoles, 326. Id 524.
272 282
Agpalo, 168. Id 525.
273 283
New Civil Code, Art. 830. Rule 77 Sec. 1. Will proved outside Philippines may be allowed here. - Wills proved and allowed in a foreign country, according to the laws of
274
Coquia. such country, may be allowed, filed, and recorded by the proper Court of First Instance in the Philippines.
275 284
Goodrich and Scoles, 337. Sec. 3 Rule 77 of the Rules of Court.
276 285
Restatement of Law, Sec. 250, p. 334 as cited by Padilla, 293. Agpalo, 172.
277 286
Coquia. § 314 US Restatement of the Law, Second, Conflict of Laws 2d, as cited in Agpalo.
278 287
Id. Goodrich and Scoles, 340.
279 288
Goodrich and Scoles, 340. Id.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
36
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
will when it arises elsewhere. Probate of a will of land is required or excused as the executed, and in another at the time of his death, interpretation will be according to the law
situs statutes provide. Under these statutes some form of probate or registration is of the former state. This is based on the presumption that the testator was using language
required in nearly all instances although title to land may occasionally be established for with which he was then familiar. 299 In a litigation among beneficiaries, circumstances of the
practical purposes without probate.289 testator, his family, the law of his domicile at the time of execution of the will, are relevant
• Under common law, where a will admitted to probate as a valid will at the last domicile considerations by the court in reaching a solution consistent with the reasonable
of the testator is regarded as valid everywhere with respect to movable property. The expectations of the parties. The law of the domicile at time of execution is relevant.300
state where movables are found is interested only in what the domiciliary state
declares as to be things owned by the testator. Thus, once the will is probated at the Intestate Succession
domicile there ceases to be a problem. Since personal property is governed by lex Philippine conflicts rules
domicilii where the deceased left real property, the probate of the will in his last Intestate succession takes place by operation of law in the absence of a valid will.301 It
domicile does not affect the conveyance of land which is subject to the lex situs.290 takes place (a) if a person dies without a will, or with a void will, or one which has
subsequently lost its validity; (b) when the will does not institute an heir to, or dispose of all
Interpretation of Wills the property belonging to the testator (only with respect to the property of which the
Philippine conflicts rules testator has not disposed); (c) if the suspensive condition attached to the institution of heir
• Under all legal systems, interpretation of wills is a process of ascertaining the meaning does not happen or is not fulfilled, or if the heir dies before the testator, or repudiates the
which the testator intended his words to convey. inheritance, there being no substitution, and no right of accretion takes place; (d) when the
• However, it is the means employed in order to achieve this objective where the heir instituted is incapable of succeeding, except in cases provided in this Code.302
differences arise. 291 Interpretation is governed by the rules of interpretation of the In default of testamentary heirs, the law vests the inheritance in the legitimate and illegitimate
decedent’s national law. If the terms are clear and unambiguous, the lex intentionis of relatives of the deceased, in the surviving spouse, and in the State.303 The relative nearest in
the party should be followed . In case of ambiguity, the intention of the party or the degree excludes the more distant ones, saving the right of representation when it properly
exact meaning he may have ascribed to them can be inferred by referring to the takes place. Relatives in the same degree shall inherit in equal shares, subject to the
context of the instrument itself or the testator’s contemporaneous and subsequent provisions of Article 1006 of the Civil Code with respect to relatives of the full and half
acts in keeping with the nature and object of the document.292 blood, and of paragraph 2 of Article 987 of the Civil Code concerning division between the
• If there is still no absolute assurance as to the intention, settled presumptions of law paternal and maternal lines.304
may be resorted to.293 If a testamentary provision admits of different interpretations, in Civil law and common law conflicts rules
case of doubt, that interpretation by which the disposition is to operative shall be In the US, since the split system is followed, there is a difference between intestate
preferred.294 The will is to be interpreted as a whole so that every expression may be succession concerning immovables and intestate succession concerning movables. In the
given effect, rather than one which will render any of the expressions inoperative; and former, descent of land upon the death of the intestate owner is governed by the law of the
of two modes of interpreting a will, that is to be preferred which will prevent situs of the land. The land will pass in accordance with the whole law prevailing at the place
intestacy.295 where it is located.305
In intestate succession concerning movables, the devolution of movables upon the death of
Civil law and common law conflicts rules the intestate owner is governed by the law of the domicile of the decedent at the time of his
In interpreting wills, the intention of the person using the language must be ascertained and death. The underlying theory is that the law of the situs of the property controls the
followed.296 However, there are authorities that with respect to real property, the lex situs devolution, but for convenience the law of the domicile is looked to in order that all the
governs the interpretation.297 property may pass as a single estate. It is presumed that he prefer that it descend as a unit
In the US, if a will of a person domiciled in an English-speaking country is written in a foreign to his family, even in absence of an adequately stated intention. It is also presumed that he
language, the technical meaning of the foreign words must be taken into consideration, would prefer that single law to be that with which he normally would be most familiar ---
though the domiciliary usage prevails after the actual meaning of the foreign language has that of his domicile.306
been fixed. 298 Where the domicile of the testator was in one state when the will was
APPLICABILITY OF CIVIL AND COMMON LAW
289
Id at 342.
290
Coquia, 491.
291 299
Id. Goodrich and Scoles, 335.
292 300
Coquia, 486. Goodrich and Scoles, 331.
293 301
Id at 487. Balane, 23.
294 302
New Civil Code, Art. 788. New Civil Code, Art. 960.
295 303
Id, Art. 791. Id, Art. 961.
296 304
Minor, 338, as cited by Padilla, 292; Goodrich and Scoles, 329. Id, Art. 962.
297 305
Minor, 338-341, Id. Goodrich and Scoles, 323.
298 306
Beale, 1039; Goodrich and Scoles, 335. Id.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
37
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• As a general proposition, it is submitted that civil and common law conflicts rules are
not applicable to Philippine conflicts rules.
• The Philippine legal system on succession adopts the unitary or universal system SUCCESSION ADDENDUM
which treats the entire estate of the decedent as a whole, without distinguishing
between real property and personal property. As such, in the Philippines, the entire Theories
estate of the decedent is governed by only one law, the personal law of the decedent. Unitary/Universal Split/Division
On the other hand, civil and common law countries adopt the split or division system assumes that the individuality of the has its roots in the feudalistic system of
which distinguishes between real property and personal property. Real property is decedent continues to exist after his death law where feudal lords could not permit
governed by the law where it is situated while personal property is governed by the in the person of his heir, for judicial the rights of succession to their land to be
personal law of the decedent, particularly the law of the domicile of the decedent at purposes - THUS: whatever personal law affected should their vassals acquire a
the time of his death. The sharp difference between the two systems has been governed the decedent governs succession foreign domicile - THUS, the split
demonstrated in the six aspects of succession already discussed: (1) successional rights to his estate after his death system seeks to distinguish between
and capacity to succeed; (2) validity of wills; (3) revocation of wills; (4) probate of wills; national law of the decedent governs in immovables and movables
(5) interpretation of wills; (6) intestate succession. countries that adopt the nationality
• Under Philippine conflicts rules, the national law of the decedent determines principle US:
successional rights, capacity to succeed, testamentary capacity, extrinsic and intrinsic domiciliary law of the decedent governs in succession to land - governed by the law
validity of wills and interpretation of wills. In contrast, under civil and common law countries that adopt the domiciliary of the place where the land is situated -
conflicts rules, personal property and real property are treated separately: matters of principle because of the obvious interest in having
succession to personal property are determined by the law of the domicile of the interests in local land decided in a manner
decedent at the time of his death while matters of succession to real property are followed by: Italy, Spain, Philippines that complies with the notion of what is
determined by the law where such property is situated. With regard to revocation and reasonable and just
probate of wills, Philippine conflicts rules are more flexible in that both Filipinos and devolution to personalty - governed by
aliens may execute, revoke their wills or have them probate in either and/or both the law of the domicile of the testator at
Philippine and foreign jurisdictions. Hence, under Philippine conflicts rules, execution, the time of his death - because it is
revocation and probate of wills are governed generally by personal law of the testator desirable insofar as an estate would be
(national or domiciliary law), the law where the act was made or Philippine law. On the treated as a unit, and the state that has
other hand, civil and common law conflicts rules on the same matters are not flexible the dominant interest in the application of
since they are determined according to the type of property involved. its laws is the state of the decedent’s
• Because of the stark differences between Philippine conflicts rules and civil and domicile at the time of his death; the
common law conflicts rules, there is a high probability of conflict between the two sets domicile law is the law that the decedent
of rules in cases where foreign elements are involved. We go back to the case of is most familiar with and its application
Eulogio Lopez, Filipino businessman who dies domiciled in California and leaves real coincides with the expectations of the
and personal properties in various places: (a) house and lot in California; (b) big parcels decedent and his family
of land in Metro Manila and suburbs; (c) substantial shares of stock in a number of
multinational corporations; and (d) considerable bank deposits in Manila and New followed by: England, US, France
York. Under Philippine conflicts rules, the entire estate will be treated as one unit, the
disposition of which will be governed by the national law of Lopez, Philippine internal
law on succession. Under US law, however, the real and personal properties will be
treated separately. Thus, the real property will be governed by the law of the place
where they are situated --- the house and lot in California will be governed by the law
of California while the big parcels of land in Metro Manila and suburbs will be governed
by the law of the Philippines. On the other hand, the personal property will be
governed by the law of the domicile of Lopez at the time of his death --- the substantial
shares of stock and considerable bank deposits in Manila and New York will be
governed by the law of his last domicile, the law of California.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
38
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Comparative Analysis
made outside the Philippines
Philippines Common law by a person not domiciled in
personalty – law of the Philippines – (Art.
Successional national law of decedent last domicile of the immovable- 829CC) personalty – law
rights (Art. 16 par. 2CC) decedent at the time lex situs lex celebrationis of last domicile
immovable- lex
of his death Revocation lex domicilii of the decedent
situs
law of the made by a resident of the at the time of his
place where Philippines outside the death
personalty - law of
national law of decedent the land is Philippines
last domicile of the
Capacity to (Art. 1039CC) determines Philippine law
decedent at the time
succeed who is the place of revocation
of his death
Aznar v. Garcia heir, duties US:
and liabilities principal place – domicile at the time
(US) of the decedent’s death
law in force at the time it is ALSO: where his assets may be found
made (Art. 795CC) will may be probated outside
the Philippines (Rule 77 Sec. personalty immovable
testamentary capacity - 1 Rules of Court) will admitted to lex situs
Probate
national law of the decedent probate at the
(Art. 15 CC) will may be reprobated in last domicile is
Civil law – proper law: national law the Philippines valid
General rule: where everywhere
executed (Art. 1 par. 1 CC) Common law – proper law: with respect to
Exceptions: domicile law the movable
by Filipino in foreign country property
Extrinsic validity - country in which he may US: foreign words must be taken into
personalty immovable
of wills be (lex celebrationis) (Art. if clear and unambiguous: no consideration
law of last lex situs
815CC) more need for
domicile of the
by alien abroad – (Art. interpretation domiciliary usage prevails
decedent at the
816CC)
time of his
lex domicilii (resides) otherwise: ascertain the if the testator changed his domicile
death
lex national testator’s intention after the execution of the will: former
Civil Code of the Philippines through the context of the domicile’s interpretation (where will
by alien, made in the Interpretation was executed) prevails
instrument,
Philippines – (Art. 817CC) contemporaneous acts,
national law settled presumptions e.g. personalty immovable
lex domicilii interpret the will as a whole law of last lex situs
to prevent intestacy domicile of the
English and American rule: decedent at the
national law of the decedent national law of the decedent time of his
personalty immovable death
(Art. 16 par. 2 CC)
law of last lex situs US:
Intrinsic validity
domicile of the
of wills Miciano v. Brimo
decedent at the Intestate unitary system personalty immovable
Bellis v. Bellis
time of his law of last lex situs
Cayetano v. Leonidas
death domicile of the

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
39
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
decedent at the The national law of the decedent mentioned in Art. 16 par. 2 CC is Section 946. This
time of his provision contains the conflicts rules of California which authorizes reference to the law of
death the testator’s domicile. The Philippine court, therefore, must apply its own law, especially
since there is no legitime for children under California law.
Cases
• Miciano v. Brimo
• Aznar v. Garcia FACTS:
FACTS: Joseph Brimo is a Turkish citizen, residing in the Philippines, with properties in the
Edward E. Christensen, the testator, is an alien domiciled in the Philippines but had always Philippines. He executed a will in accordance with Philippine law. In his will, he imposed a
considered himself a citizen of California. He died in Manila. He had 2 acknowledged natural condition to respect his wish to distribute his estate using Philippine law; otherwise, legatees
daughters, Filipino citizens named Maria Helen Christensen-Garcia and Maria Lucy will be prevented from receiving their legacies.
Christensen-Daney. Maria Helen was residing at Davao and was given the sum of P3,600 as a
legacy by Edward’s will. Maria Lucy was referred to by Edward as his “only child”, residing in The judicial administrator filed a scheme of partition. Brimo’s brother, Andre, opposed it but
California, USA. did not prove that the testamentary provisions are not in accordance with Turkish law. He
argued that the will is not in accordance with Turkish law, the law of the nationality of the
In his final account and project of partition of Edward’s estate, the executor ratified payment testator Joseph Brimo.
of only P3,600 to Maria Helen and proposed that the residue be transferred to Maria Lucy.
Maria Helen opposed the partition, arguing that it deprived her of her legitime. She argued ISSUE: WON the Philippine law applies according to the testator’s intent notwithstanding the
that she was held to be an acknowledged natural child in the case with G. R. No. L-11483-84. Civil Code provision that the national law of the decedent applies.
She insisted that the court should apply Sec. 946 of the California Civil Code such that the HELD: The Philippine law does not apply. The national law of the decedent, Turkish law,
entire California law should be applied, not just the internal law, because the case involves governs.
foreign elements. In contrast, the executor argued that the internal law should be applied. The national law of the decedent, Turkish law, governs.
Under then Article 10 of the old Civil Code (now Art. 16 CC), the national law of the
The TC held that since Edward is a citizen of US and California, successional rights and decedent governs the intrinsic validity of the will. Here, the national law of Brimo, Turkish
intrinsic validity of his will is governed by the law of California. law, governs. However, Andre did not prove that the testamentary provisions are not in
accordance with Turkish laws. Therefore, it is assumed that Turkish law is the same as
ISSUE: WON an acknowledged natural daughter of the testator who is an alien domiciled in Philippine law.
the Philippines but a citizen of California was entitled to succeed under Philippine internal law The condition that the will shall be implemented following Philippine law) is contrary to law
HELD: Philippine internal law applies. (Maria Helen is entitled to her legitime under Philippine i.e., Article 10 of the old Civil Code. Hence, it is considered as not written.
law)
The domicile of Edward is the Philippines. • Bellis v. Bellis
He was born in New York, migrated to California and resided there for 9 years. Since he FACTS:
came to the Philippines in 1913 he returned to California very rarely and just for short visits. Amos G. Bellis was born in Texas, a citizen of Texas and US, and a resident of Texas when
He never owned or acquired a home or property in California. Therefore, he did not he died. His first wife was Mary (whom he divorced), with whom he had 5 legitimate
abandon the Philippines and make home in California. children. His second wife is Violet, with whom he had 3 illegitimate children and 3 legitimate
Edward never lost his citizenship acquired in California by his stay in the Philippines. children. He executed 2 wills: one that involves his Texas estate, the other involves his
When Edward executed his will in 1951 he declared he’s a citizen of California. Therefore, Philippine estate. Under Texas law, there are no legitimes.
he never intended to abandon his California citizenship.
The law that governs is Art. 16 CC par. 2. His will contained the following dispositions: (a) $240K to his first wife Mary; (b) P120K to
This provision states that the national law of the decedent will govern successional rights. In his 3 illegitimate children by his second wife Violet (P40K each); (c) remainder of his estate
this case, the national law of Edward is the private law of California. Section 946 of the to his 7 surviving children in equal shares. Amos’ will was admitted to probate in CFI Manila.
California Code provides that no law to the contrary, in the place where personal property The executor, People’s Bank & Trust Co. paid all bequests, submitted and filed its
is located, it is deemed to follow the person of its owner and is governed by the law of his “Executor’s Final Account, Report of Administration and Project of Partition.” Two
domicile. illegitimate children opposed, arguing that the will deprived them of their legitimes. The
Reason demands that the court enforce the internal law of California for citizens residing lower court approved the project of partition. The two illegitimate children further argued
therein while conflicts rules are applied as regards citizens of California residing abroad. The that Article 17 par. 3 CC prevails as an exception to Art. 16 par. 2 CC. Art. 17 par. 3
court recognizes the principle of comity. provides: Prohibitive laws concerning persons, their acts or property, and those which have for their

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
40
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
object public order, public policy and good customs shall not be rendered ineffective by laws or Administration is usually effected through an officer appointed by the proper probate court.
judgments promulgated, or by determinations or conventions agreed upon in a foreign country.” If the person appointed was named in the will, he is called an executor. If no person is named
in the will, or if there is no will at all, the person appointed is an administrator.308
ISSUE: Which law applies: Texas law or Philippine law A conflict of laws issue would arise when the decedent leaves property in two or more
HELD: Texas law applies. different States. Administration of the estates of the same decedent in different estates
Renvoi does not apply. where there are creditors and property belonging to the same estate, are regarded as wholly
The parties did not put the application renvoi in issue. Furthermore, Renvoi applies only if independent of each other; that there is no privity between the different administrations; but
there’s a conflicts rule adopting the situs theory. Amos was both a national and domiciliary of that each is sovereign within its own limits.309 In the case of Johannes v. Harvey310, Mr. and
Texas. Hence, there is no situation for renvoi. Mrs. Johannes were British nationals. Mrs. Johannes died intestate, leaving her husband in
Article 17 par. 3 does not apply as an exception to Art. 16 par. 2 CC. Singapore and her brother in Manila. According to the British law, the husband, Mr. Johannes,
Art. 16 par. 2 is a specific provision that governs intrinsic validity of testamentary provisions. is entitled to the whole of the estate of the wife; he was appointed administrator of the
Also, Article 1039 CC provides that capacity to succeed is governed by the law of the nation property of the deceased in Singapore. The Manila court, on petition of her brother,
of the decedent. appointed the latter as administrator of the Manila estates, which consisted of bank deposits.
Texas law applies, following Article 16 CC and the ruling in Miciano v. Brimo. Mr. Johannes filed a petition for certiorari, contending that the Manila court acted in excess
• Cayetano v. Leonidas of jurisdiction in appointing the brother of the deceased as administrator, since he is entitled
FACTS: to the whole estate of the wife and he had already been appointed administrator. The
Adoracion Campos was an American citizen and a resident of Pennsylvania. She executed a Supreme Court denied the petition. It held that when a person died intestate owning
will according to Pennsylvania law. She died in Manila where she had properties, and was property in the country of his domicile as well as in a foreign country, administration is had in
survived by her father and 3 sisters. Her father, Hermogenes Campos, as an only both countries. The principal administration is granted in the jurisdiction of decedent’s last
compulsory heir, adjudicated unto himself the ownership of the entire estate. domicile. Ancillary administration is any other administration.311
An administrator appointed at the domicile of the decedent is called the principal
Eleven months later, the sister, Nenita, filed a petition for reprobate of Adoracion’s will and administrator, or the domiciliary administrator; one appointed in another state is an ancillary
for her appointment as administratrix of her estate. Nenita alleged that the will was administrator. But this does not indicate any inferiority or any difference in function.312
probated earlier in Philadelphia. The father, Hermogenes, opposed the petition, contending
that the intrinsic provisions of the will are void, if American laws are invoked and that the COMPARATIVE ANALYSIS
will work injustice and injury to him. The trial court granted reprobate. Polly Cayetano Jurisdiction for Administration
substituted her father in the case when he died. She argued that her father was divested of Philippine law and procedure on administration of estates follow closely Anglo-American
his legitime when the Court allowed the will to reprobate. models, the main principle of which is territorialism. The Axiom followed is the law of the
domicile governs distribution but the law of the state appointing the administrator or
ISSUE: WON Pennsylvania law applies executor governs administration.313
HELD: Pennsylvania law applies. Under Rule 73 Sec. 1 of the Philippine Rules of Court, if the decedent was inhabitant of the
Art. 16 par. 2 CC states that the intrinsic validity of testamentary provisions will be governed Philippines at the time of his death, irrespective of whether he was a citizen or alien, the RTC
by the national law of the decedent. Art. 1039 CC provides that capacity to succeed is of the province in which he was residing at the time of his death shall have the probate
governed by the national law of the decedent. jurisdiction. If the decedent was an inhabitant of a foreign country at the time of his death,
In Bellis v. Bellis, it was held that: “whatever public policy or goods customs may be involved in our the RTC of any province in which he may have his property314
system of legitimes, Congress has not intended the same to extend to succession of foreign Philippine law subscribes to this principle that “wills proved and allowed in a foreign country,
nationals.” The Congress specifically chose to leave it to the national law of the decedent, as according to the laws of such country, may be allowed in the Philippines” and “when a will is
shown by Article 16 par. 2 CC. thus allowed, the court shall grant letters of administration with the will annexed, and such
letters of administration shall extend to all estate of the testator in the Philippines315
ADMINISTRATION
The collection of assets, particularly personal assets, and with them paying debts until debts
are all paid or the assets exhausted.307 The payment of the balance to those entitled to it is
308
called distribution. Salonga, 527
309
Fowle v Code, 63 Me. 245 (1871)
310
Johannes v. Harvey 43 Phil 175 (1922)
311
Salonga, 528
312
Beale, 1445
313
Salonga, 527
314
Id
307 315
Thomas v Morristown State Bank, 53 S.D. 499, 221 N.W. 257 (1928) Philippine Rules of Court, Rule 78 Sections 1 and 4

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
41
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
In the United States, the courts of the state where the decedent died domiciled have When an ancillary administrator is appointed for the estate of a deceased person in the
jurisdiction to appoint an administrator even though the decedent left no property within the Philippines, such estate, once just debts and the expenses of administration have been paid,
state.316 Anyone may be appointed administrator, even one from another state,317 unless a shall be disposed of according to the will so far as such will may operate upon it. If there be
statute provides otherwise. any residue, the same shall be disposed of as is provided by law in cases of estates in the
Philippines belonging to persons who are inhabitants of another state or country.322
Jurisdiction where there is property
A rule universally recognized is that administration extends only to the assets of the Administrator takes Assets to Another State
decedent found within the State or country where it was granted. To administer property If an administrator takes possession of assets in his own state and then takes or sends them
situated in a foreign state, the administrator must be reappointed, or a new one named, in into another state, they cannot be seized there either by creditors or by a local
that state.318 If decedent left personal property in two states, the domiciliary administrator administrator.323
would have no right to take the assets or collect the debts in the other state; for his statute
would have no extra-territorial force to empower him. Property Brought in After Owner’s Death
• Tayag v. Benguet Consolidated, Inc319 – Idonah Slade Parkins died domiciled in New York Jurisdiction is sometimes asserted to administer property brought into a state after the death
in 1960. She had properties in New York and Philippines. The domiciliary administrator of the owner. This is open to objection on logic, but can be sustained because of the benefit
was appointed by the New York court, while the ancillary administrator was appointed of those interested in the estate. Can the courts of a state assume jurisdiction of such
in the Philippines by a Philippine court. To satisfy the claims of creditors, the ancillary property? If the property is within the state at the time of the owner’s death, that state may
administrator in the Philippines asked the New York administrator to surrender to him control its administration through any court it pleases. Other considerations arise when the
two stock certificates owned by Idonah Slade Perkins in the Benguet Consolidated, Inc., jurisdiction is claimed over tangibles brought into the state after the owner’s death; the usual
a Philippine corporation. The New York administrator refused to surrender them place of administration of such property is in the state where the property was at the time of
despite order by the Philippine court. The court considered them as lost certificates, the owner’s death. Jurisdiction to administer property brought into the state after the death
ordered Benguet Consolidated to cancel said certificates and issue new ones for of the owner has been asserted. The most important thing to consider is that the property
delivery to the ancillary administrator or to the probate court. The corporation be taken care of, accounted for, and used to pay claims against the decedent and the
refused, alleging: (a) the old certificates still exist (b) it may be held liable in the future remainder finally distributed. If the property is handled, and no rights of persons in the first
because of conflicting certificates. The Supreme Court held that Benguet must issue the state are prejudiced by reason of the administration in the second, ignoring the usual
certificates. The ancillary administrator in the Philippines is entitled to the possession of procedure probably does no harm.324
said certificates so he can perform his duty as such administrator. An administrator • Crescent C.I. Co. v Stafford,325 – The court held that if a chattel is carried into another
appointed in one state has no power over property in another state. state after the death of the owner, the administrator in the first state is entitled to it
In order to administer the assets in a 2nd state, it is necessary to appoint an ancillary and may sue for it without further administration.
administrator there. It has been asserted at times that the domiciliary representative, will be However, if there is no administrator appointed in the first state, the administration in the
preferred over other applicants for appointment as ancillary representative.320 However, this second may serve to prevent waste or conversion of the property. Also, property cannot be
is not a rule of Conflicts of Law, and that the matter is almost wholly statutory. In Fishell v made subject of administration in the second state if it was brought there by the
Dixon, a domiciliary rep in Ohio applied to be ancillary rep in Kentucky. Application was administrator appointed in the first state, for sale or other purpose.326
denied, because the laws of Kentucky require an administrator to be a resident.
An ancillary administrator may be appointed even if no administrator has been appointed at
the domicile. 321 What is important is that there are properties present in the state
appointing such ancillary administrator. Value of the property is immaterial. In some cases, a
pistol, pocket change, gold watch, were held to be sufficient assets.
A decree, regular on its face, appointing an ancillary administrator, may not be collaterally
attacked in litigation in another state by showing that here were no assets within the state at
the time of appointment. But such an appointment may be collaterally attacked in the state
of appointment.

316
Connors v Cunard S.S Co., 204 Mass 310, 90 N.E. 601 (1910)
317 322
Finnerty v Shad, 210 Ia. 1338, 228 N.W. 886 (1930) Salonga, 528
318 323
Salonga, 527 Crescent C.I. Co. v Stafford, 3 Woods, 94, 6 Fed. Cas No. 3387 (1877)
319 324
Tayag v Benguet Consolidated, GR No. 1-23145, November 29, 1968 Goodrich and Scoles, 350
320 325
Fletcher v Sanders, 7 Dana 345, 249 (Ky 1838) Crescent C.I. Co. v Stafford, 3 Woods, 94, 6 Fed. Cas. No. 3387 (1877)
321 326
Stevens v Gaylord, 11 Mass 256 (1814) Goodrich and Scoles, 351

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
42
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Administrator Receiving Property Outside his State
A domiciliary administrator should not take assets which were outside his state at the death Suit By and Against the Administrator
of the decedent. But if there is no ancillary administrator, and no local creditors, no harm is In the Philippines, the law governing suits by and against the administrator is found in Rule 87
done to anyone by the domiciliary administrator taking the assets, provided he brings them of the Philippine Rules of Court.
into his account in his own state.327 In the Unites States, an administrator may sue in the state of his appointment to get in any
claim due the estate. In the same way an administrator, even an ancillary administrator may
Probate of the Will be sued in his own state by a creditor from any other state. There is usually no need for a
Probate done at the domicile of the decedent – Probate must be made primarily at the suit against an administrator in his state, since a claim against the deceased is to be proved in
domicile of the decedent, the will being governed by that law. Probate there is binding on all the probate court; only if it is disallowed by the probate court or referred by that court to
questions as to the legality of the will with regard to personal estate elsewhere, but not on another court does the creditor of an estate sue the administrator. But, the probate court
the existence of domicile there, if it is disputed in another court by anyone not a party to the cannot entertain a claim created after the death of the decedent, such as a claim on a
prior proceedings, for the question of domicile being jurisdictional so far as establishing the contract made with the administrator, it must be brought against the administrator
validity of the will outside the state of domicile is concerned, that cannot be established if the personally, and as it is not against him in his representative capacity it may be brought in any
domicile is disputed.328 state in which he may be found.335
Probate done at another State – A will may be probated in a foreign state though it has not The general rule is that executors and administrators are not liable to actions as such in a
been so probated at the domicile.329 state where they have obtained no letters of administration. Minor provided for some
Effect of Judgment on Validity of the Will – It seems that the New York Statute provides for exceptions336 to this general rule, to wit:
the probate of the will of a non-resident testator if such will is executed according to the law suit involves the assertion of his own right, rather one of the deceased’s e.g. when the
of New York even though it is invalid by the law of the domicile.330 Where the will has been executor has already obtained a judgment in the state of his appointment
admitted to probate in 1 state without awaiting decision on its validity by the courts of the right of action accrues to the executor directly through his contract or transaction, and was
domicile this determination is not conclusive of its validity when the will is subsequently not originally an asset of the estate in his charge
offered for probate at the domicile.331 Validity of a will is to be determined by the law of the if the executor appointed in one state removes with the assets to another state and
domicile. If the will has once been admitted to probate at the domicile, this would be misapplies the funds of the estate in a latter place
conclusive of the validity of the will, so far as personalty is concerned, in all other in cases where executor and administrator qualifies in State where he sues or is sued
jurisdictions.332 The exceptions provided by the courts and statutes as summarized by Goodrich and
Under the Philippine laws, wills proved and allowed in a foreign country, according to the Scoles337 are the following:
laws of such country, may be allowed in the Philippines.333 • on obligations incurred by the representative after the death of the decedent
• when he has assets of the estate there which he is wasting or converting to his own
Powers and Rights of the Administrator use
The corollary rule is that the powers and rights of an executor or administrator, as well as • when he has assets of the estate there which he is wasting or converting to his own
his liabilities and duties, are determined by the State where he is appointed and qualified as use
such. Administration is governed by the law of the country from which administration derives • where he or the decedent has consented to the court’s jurisdiction
his authority. The Second Restatement provides that the duties of an executor or • the trend is to further extend the liability to suit
administrator with regards to the conduct of the administration are usually determined by
the local law of the state of appointment. It is generally conceded that an administrator can Suit by Foreign Administrator
convey title to assets situated, or even transiently found, in the state of his appointment. He At common law a foreign administrator could not bring suit. This is often called an incapacity
can neither sue nor be sued outside the jurisdiction of the court from which he derives his and that unless the incapacity is called to the attention of the court in due time and in the
authority, unless his is appointed anew and qualifies as such therein. However, he may proper way the suit will be allowed to go on.338 However, there are some statutes in States
enforce by action a right which is personal to himself and which he is entitled to assert his in the United States that have given power to a foreign administrator to sue.
own individual capacity, even though it is contended with the estate he is administering.334
Suit against Foreign Administrator
327
No action will lie against a foreign executor or administrator. The reason usually given is the
Beale, 1497
328
Beale, 1463 impossibility of enforcing a judgment. The judgment is by its terms payable out of the estate
329
Thomas v Sprague, 259 F. 338 (1919)
330
Matter of Rubens, 128 A.D. 628, 112 NYS 941, affd. 195 NY 527, 88 N.E. 1130 (1909)
331 335
Estate of Clark, 148 Cal. 108, 82 P. 760 (1905) Beale, 1529
332 336
Thomas v Morrisett, 76 Ga. 384 (1885) Minor, 235-236
333 337
Philippine Rules of Court Article 77 Section 1 Goodrich and Scoles, 365
334 338
Salonga, 530 Champlin v Tilley, 3 Day, 303, 5 Fed. Cas. No. 2568 (Conn 1809)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
43
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
only. It is submitted that the rule is based upon a much more fundamental reason than mere surplus to the domiciliary administration.347 If debts remain in the ancillary state there can be
expedience. The court in this case is attempting to impose an obligation owed by the no remission348 However, in several cases there has seemed sufficient reason on the facts for
deceased upon another person, his executor. Such an imposition could be made only by a distributing a balance in the ancillary state. The most common reason is the presence of all
sovereign having power over the executor; and then only in connection with some act done legatees in the court, or their residence in the ancillary state.349 If to send the estate to the
under the sovereign’s jurisdiction.339 domicile will subject it to a heavy inheritance tax or death duty it will not be done.
Despite the general rule as to the non-suability of foreign representatives, courts of equity The administrator of another state, even the state of the domicile, has no right to demand
have recognized a limited jurisdiction to entertain suits against foreign executors or the payment of a balance to him; until the court has ordered payment to him, has no
administrators, in respect of assets within the state, in order to prevent a failure of justice.340 standing. 350 But after the balance has been ordered paid to domiciliary administrator the
A judgment against a foreign administrator pursuant to a statute authorizing such action ancillary state has no longer any claim to the assets, and the domiciliary administrator if
would not be valid in the state which appointed such representative. This was illustrated in necessary may maintain an action for it. A legatee has no right until the court orders
the case In re Cowhan’s Estate,341 the Court held there that a Michigan Administrator has no distribution and until the will has been probated in the state. In case of overpayment to
authority outside of Michigan to bind the Michigan estate, the courts of other states acquire legatee or other party, there is a duty to pay the amount back to the estate in accordance
no greater power in the premises merely because the legislature of such other state has with the law of the state where it occurred. Repayment may be enforced in any other state
purported to authorize suit against foreign representatives. where there is an administrator.351
It is more generally held that a foreign representative does not become suable because of his
own consent, manifested by an appearance or otherwise.342 According to Beale, to allow a Receiver
judgment against a foreign administrator, even by his consent, would transgress 2 of the basic A receiver is an officer appointed by a court of equity primarily to preserve property or to
principles of administration; first, it would give one creditor payment, without regard to sequester it for creditors. The receiver in order to preserve the property must be ordered
others. Second, it would withdraw assets from the estate in another state.343 to carry on the business. Receivers for the property of an individual or corporation may be
appointed in several states. But it must be obvious that if business is to be carried on to
Accountability of Administrator preserve value, it must be done by one receiver, under the direction of a single court. There
Under Philippine laws, an administrator should, in his final accounting, be held responsible for must then be one receiver at the head of the business, he is called the principal receiver.
all assets that may have come to him anywhere, by reason of his local appointment, but he The appointment of the principal receiver would depend on the entity whose property it is
cannot be accountable in any other State than that of his appointment, and if the same to preserve. If it the entity is a corporation, the principal receiver is the one appointed in the
person has served as administrator in more than one state he must account separately for state of incorporation though there is no property of the corporation in that state. If the
assets received under such appointment. entity is an unincorporated association, the principal receiver is the one appointed at the
In the United States, an administrator must render his account in the state where he was principal place of business. As for an individual, the principal receiver is the first one
appointed, even though he may have received property from another state. Only personal appointed. Nevertheless, the ancillary administrator may deal with the problems that arise in
assets are charged to the administrator. If he collected rents and profits of lands, in his own his own state without sending the question for decision to the principal state.352
or any other state, he is not accountable for them as administrator.344 There are instances The receiver may not exceed the powers granted to him by the court. While traditionally
when the domiciliary administrator qualifies in another state as an ancillary administrator, or there is no privity between receivers of the same estate, even if the same person acts as both
that one person qualifies as ancillary administrator in 2 states. In such a case he is principal and ancillary receiver, more recent authority indicates that suits by or against one
accountable to each state for assets received in that state, and for no assets received receiver are res judicata with respect to another receiver. Payment to a particular receiver
elsewhere.345 The domiciliary and ancillary administrations are far independent of each other, will prevent other receivers from asserting claims against the debtor.353
despite the fact that the same man is the representative of the estate in both jurisdictions.346 The Philippine law on receivership is found in Rule 59 of the Rules of Court.

Distribution Guardianship
After the payment of debts in the ancillary administration, it is usually stated that it is within The general approach taken in conflict of laws problems in administration of estates of
the sound judicial discretion of the ancillary probate court whether to proceed with the deceased persons are also applicable to estates under the control of guardians. A guardian
distribution of the personal estate in accordance with the law of the domicile or to remit the occupies a fiduciary position and handles matters committed to his charge for the benefit of
another. His function is to manage and conserve the property for the benefit of the ward
339
Beale, 1553
340 347
Id Thomas Kay W.M. Co. v Sprague, 259 F. 328 (1919)
341 348
In re Cowhans estate, 220 Mich 560, 190 N.W. 680 (1922) Hensley v Rich, 191 Ind 294, 132 N.E. 632 (1921)
342 349
Lawrence v Nelson, 143 U.S. 215, 222, 36 L. ed. 130, 12 Sup. 440 (1891) Harvey v Richards, 1 Mass 381 (1818)
343 350
Beale, 1556 Banta v Moore, 15 N.J. Eq. 97 (1862)
344 351
Morill v Morill, 1 All 132 (Mass. 1861). Beale, 1565
345 352
Boston v Boylston, 2 Mass. 384 (1807) Beaver Boards Co. v Imbrie & Co., 282 F. 654 (1922)
346 353
Beale, 1561 - 1562 Goodrich and Scoles, 385

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
44
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
until such time as the latter is legally capable of conducting his own affairs. The guardian does
not take title to the ward’s property. The term “guardian” is used to denote both the This is further emphasized in the context of citizenship.
individual who has charge of the person of the ward, and the individual of the person of the
ward, and the individual in whom is vested the management of the ward’s property. The two 2. Why the Filipino Father’s Personal Law
functions are separate, and were so recognized by the common law. The same person may
perform both functions.354 Recognition of the Philippine Constitution
The law on guardianship in the Philippines is governed by the Philippine Rules of Court. The Article IV of the 1987 Philippine Constitution recognizes that the following are citizens:
general power and duties of guardians can be found in Rule 96 Section 1.
Section 1. The following are citizens of the Philippines:
Right of the State to Claim the Estate of the Decedent [1] Those who are citizens of the Philippines at the time of the adoption of this Constitution;
Theory 1 – As the property has become ownerless (bona vacantia), the State can exercise the [2] Those whose fathers or mothers are citizens of the Philippines;
old jus regale of occupying it; the property must therefore revert by escheat to the State. [3] Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon
This theory is upheld in England (claim is known as caduciary rights), most American states, reaching the age of majority; and
Austria, France, Belgium, and majority of Latin-American countries.355 [4] Those who are naturalized in accordance with law.
Theory 2 – As the usual heirs are non-existent, the State should succeed as heir, jure
hereditario. The State becomes universal heir. This theory is followed in Italy, Germany, Section 4. Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act
Switzerland, Spain, and the Philippines.356 or omission, they are deemed, under the law, to have renounced it.
The rationale for both theories is that abandonment of the property would be detrimental to
the public interest. As the property can no longer be enjoyed because there are no other Firstly, the Constitution establishes that a child of either a Filipino father or mother are
persons entitled to own and enjoy it, it is necessary and proper that the State which alone considered citizens. In this context, proving filiation to a Filipino father, thus allows such child
can extend protection to its use lay claim to the entire estate.357 a dual-citizenship status under Philippine law.
Secondly, the Constitution likewise recognizes situations where in a Filipino woman may lose
ADDENDUM her status as a citizen due to her marriage to a foreigner. This is shown in section 4, Art. 4.
Why We Follow the Father’s Personal Law to Prove Filiation
Effect of Proving Filiation
1. Proving Filiation to a Filipino Father • It has been held that the State has the right to decipher who are and aren’t its
Art. 15 NCC: Laws relating to family rights and duties, or to the status, condition and legal capacity citizens. 358 This is manifested in Article IV of the 1987 Philippine Constitution.
of persons are binding upon citizens of the Philippines, even though living abroad. Corollary, the State has the privilege of deciphering how such citizenship may be
Though Art 15 makes no claim that the personal law of the father shall be used to establish acquired or lost, such as establishing naturalization procedures, and the recognition
filiation, such is supplied by the Family Code, to wit: that adoption is not a means of acquiring citizenship.
• In the case of proving filiation: if successful, the child has the option of choosing his/her
Art. 172. The filiation of legitimate children is established by any of the following: father’s citizenship. Depending on the father’s personal law, the child may automatically
(1) The record of birth appearing in the civil register or a final judgment; or be a state’s citizen or hold dual citizenship until a certain age, usually the age of
(2) An admission of legitimate filiation in a public document or a private handwritten instrument and majority. In the Philippine context, proving filiation is an accepted means of acquiring
signed by the parent concerned. Filipino citizenship as proven in par two of the 1987 Constitution, implemented by the
In the absence of the foregoing evidence, the legitimate filiation shall be proved by: Family Code above quoted. Corollary to the effects of such citizenship is (1) the
(1) The open and continuous possession of the status of a legitimate child; or acquisition of all rights, duties, abilities and privileges that are incidental to the acquired
(2) Any other means allowed by the Rules of Court and special laws. citizenship; and, (2) the determination of the child’s personal law in other conflict issues
relating to such him. To emphasize the latter’s importance: conflict issues decided by
Considering that maternity is conclusive and paternity is disputable, proving filiation is thus the personal law of the parties would be affected if the child, a party to the conflict
dependent upon the personal law of the alleged father. issue, has acquired his father’s citizenship.
Putting Art 15 of the NCC and Article 172 of the FC together would show that: No matter • Salonga points out that there will be difficulty when the father is a naturalized Filipino
where the Filipino Father is domiciled, proving filiation must follow the Philippine law citizen:

354
Goodrich and Scoles, 376
355
Salonga, 532
356 358
Id According to Salonga, such privilege of the state is not absolute. “It must be consistent with international treaties, international customs,
357
Id and principles of law generally recognized with regard to nationality” p 164

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
45
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• The law lays emphasis on the date and place of birth of the minor child in relation to second is premised on the concept of voluntary submission. Both theories have given way to
the date of the naturalization of his father. Thus a minor child born in the Philippines a more practical consideration – that of business expediency and convenience.363
either before or after the naturalization of the father is a Filipino citizen. However, in To determine where the contract was made, we look to the place where the “last act is
the case of a minor child born outside the Philippines, a distinction must be made. If he done which is necessary to bring the binding agreement into being so far as the acts of the
is born before the naturalization and is dwelling in the Philippines at the time of the parties are concerned.”364 One of advantages of the lex loci contractus is the relative ease in
parent’s naturalization, he is a Filipino. However, if the child is born before the establishing the place of contracting. Furthermore, in applying it consistently, the principal
naturalization but residing outside the Philippines at the time of the naturalization, he is purposes of contract which are certainty and stability are achieved.365
a Filipino only during his minority unless he resides permanently here when still a While a majority of the decided cases in the United States refer the matter of formal validity
minor, in which case he will continue to be a Filipino citizen even after he becomes of to the place of making, results have been reached through recourse to other principles.366 In
age. On the other hand, a child born after naturalization shall be considered a Filipino this connection, two decisions by the Supreme Court of the United States offer conflicting
citizen, unless within one year after reaching the age of majority he fails to register views.
himself as a Filipino citizen at the Philippine consulate of the country where he resides Scudder v. Union National Bank – It was said by way of dictum that “matters bearing upon the
and take the necessary oath of allegiance.359 execution, interpretation and validity of the contract are determined by the law of place
where the contract is made,” but in Hall vs. Cordell a question of form was referred to the
CONTRACTS place of performance.367
C/O: CHRIS GERONA, MACE WONG, INXS SINGSON, DINGDONG POQUIZ, ERIC • Hall vs. Cordell
BACSAL, PAUL IMPERIAL Facts: The defendants had orally agreed with the plaintiffs in Missouri to accept and pay in
(Salonga, CHAPTER XVIII, 1995) Illinois all drafts drawn on them by one Farlow. They failed to pay a draft upon presentation.
Under the law of Missouri an agreement to accept a bill of exchange must be in writing, but
CONTRACTS not in Illinois.
The fundamental policy in the broad local law of contracts is to give effect to the justified Held: Illinois law controlled. “Nothing in the case shows that the parties had in view, in
expectations of the parties. This is reflected in the strength of the view which attempts to respect to the execution of the contract any other law than the law of the place of
carry out their intention. Underlying the conflict of laws policy in contracts is this same policy performance.”
of the local law.360 When ambiguity exists with regard to what law parties intended, their Although the lex loci contractus rule respecting formalities is generally adhered to, there is
intent normally can be given effect by a reference to the law that will sustain their however, a disagreement as to the degree of submission to it. Some courts give it a
agreement.361 compulsory, imperative effect; others consider it merely permissive or optional.368 The rule
Article 1159 of the Civil Code provides: before as advocated by Mr. Justice Story was the compulsory approach whereby with respect
“Obligations arising from contracts have the force of law between the contracting parties and to formalities of a contract the law of the place where the contract was executed was
must be complied with in good faith.” controlling. As embodied in the Original Restatement, it was the law of the place of the
This provision, which was lifted from the Spanish Code, embodies the importance of contracting that determines the formal validity of a contract.369
upholding agreements entered into in good faith by the various parties. Today, however, there is more adherence to the rule that lex loci contractus is merely
The traditional method in cases involving contracts with Conflict of Laws situation is for the permissive and optional. The Second American Restatement, in abandoning the compulsory
forum either (1) to refuse to entertain the case on the ground of forum non conveniens, thus approach, laid down two rules: (1) the formalities required to make a valid contract are
leaving the parties free to litigate elsewhere; or (2) deny enforcement of the contract and the determined by the local law of the State chosen by the parties to govern their contract or, in
foreign law that upholds it for being against its notions of public policy and morality.362 default thereof, by the local law of the state which has the most significant relationship in the
transaction; and (2) formalities which meet the requirements of the place where the parties
Law Governing Formalities execute the contract will usually be acceptable. 370 In England this is reflected in views
State law may require a contract to be executed with certain formalities to be enforceable. sustaining the formal validity of a contract if the required formalities of either the place of
The statuists led by Bartolus, maintained that the formalities of an act of transaction, such as making or the proper law are satisfied.371
a contract, should be governed by the law of the loci contractus and is derived from the broad
proposition that the place governs the act, locus regit actum. There are two theories in 363
Salonga, p. 274, Chapter 12
364
support of loci contractus. The first is premised on the theory of sovereignty, whereas the Coquia, citing Goodrich, p 243, 244
365
Coquia
366
Stolenberg,
367
Stolenberg, citing Scudder v. Union National Bank, 91 U.S. 406, 23 L.Ed. 245 (1875) and Hall v. Cordell, 142 U.S. 116, 12 S.Ct 154, 35
L.Ed. 956 (1891)
359 368
Salonga, pp 178-179. Salonga, p. 274, Chapter 12
360 369
Scoles Salonga, p. 275, Chapter 12
361 370
Scoles, citing Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102 (1882) Salonga, p. 274, Chapter 12, citing the Second American Restatement, Section 199; Sections 187, 188.
362 371
Salonga, p. 274, Chapter 12 Scoles, citing Dicey Conflict of Laws 774 (7th ed. 1958); Cheshire, Private International Law 234 (6th ed. 1961)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
46
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Philippine Conflicts Rule of Formal Validity Philippine Law on Capacity to Contract
The Philippines follows the lex loci contractus rule as embodied in Article 17 of the Civil Code • In the Philippines one’s capacity to enter into a contract is regulated by Article 15 of
which states to wit: the Civil Code which states to wit:
“The forms and solemnities of contracts, wills, and other public instruments shall be • “Laws relating to family rights and duties or to status, condition and legal capacity of
governed by the laws of the country in which they are executed. When the acts referred to persons are binding upon citizens of the Philippines even though living abroad.”
are executed before diplomatic or consular officials of the Republic of the Philippines in a • The common scenario dwelt into in Conflicts of Laws is: can a person otherwise
foreign country, the solemnities established by Philippine Laws shall be observed in their disqualified to enter into a contract based on his status laws in his home country later
execution.” repudiate a contract he entered into with a foreigner by simply raising such
As to whether or not the Philippines follows the optional or compulsory approach, there are disqualification which the latter in good faith did not know of?
diverse views, however, the optional approach seems to be more prevalent. In cases where • One prevailing rule in the Philippines is that the doctrine of estoppel will prevent a
execution cannot be localized due to multi-state contacts, Philippine courts in interpreting minor from repudiating a contract by later alleging that he was not of age in contracting
Article 17, would do well to adopt the rule of validation that is established in the laws of all with a party that dealt with him in good faith.
civilized states. As formulated by eminent civil law authority, Prof. Ehrenzweig, the rule • As to married women however, Article 39 of the Civil Code provides to wit:
means that “parties entering into a contract upon equal terms intended their agreement to • “A married woman, 21 years of age or over, is qualified for all acts of civil life, except in
be binding,” and the law will give effect to their intent whenever it can do so “under any law cases specified by law.”
whose application the parties can reasonably be assumed to have taken into account.”372 The
• Furthermore, Article 165 of the Civil Code provides that the wife is incapacitated to
reason is simple: if a court is convinced that the contract was made as alleged and there has
bind the conjugal partnership without the husband’s consent. It is therefore apparent
been no fraud or perjury, it should have no sympathy for a party whose only excuse for
that in cases wherein the wife enters into a contract wherein she is disqualified to
repudiation is lack of statutory formality.373
enter into by Philippine law but otherwise capacitated in another country where she
Under the rule of validation, the validity of the contract will be upheld as long as it satisfies
contracts with would arise a dilemma as to whether or not such a contract is valid.
the requirements of any proper law.374 The policy favoring enforcement of the reasonable
• It is therefore the opinion of Salonga that Article 15 of the Civil Code has to be recast
expectations of parties arising out of transactions seriously entered supports the validation
or the courts may limit its liability so as to arrive at a better result. A good model to
rule.375
follow may be found in the Geneva Conflicts Rules on Bills of Exchange and Promissory
Notes of 1930. Under the said rules, the capacity of a person to bind himself by a bill of
Capacity to Enter Into Contracts
exchange is initially determined by his national law; but a person who lacks capacity
Status is a basic concern in Conflict of Laws involving contracts entered into involving minors
under his national law is nevertheless bound, if his signature is given in any territory in
and married women. There are two views with respect to status. First, is the nationality
which according to the law in force there, he would have the requisite capacity. The
principle whereby the capacity of an individual to enter into a contract is referred to his
Swiss Code provides that an alien who enters into a transaction in Switzerland cannot
national law. Second, is the domiciliary principle whereby a persons capacity to enter into a
plead his lack of capacity if he has the capacity under Swiss Law.
contract should be determined by the law of his domicile.376 The latter, which involves the
lex loci contractus rule with reference to capacity to enter into a contract, has now been • As a way of reconciling the different viewpoints with respect to status and ones
abandoned. The rule followed nowadays is that the law that should govern a contract is the capacity to contract, Article 15 of the Civil Code would be best if limited by the courts
law of the state with which the contract has its more significant relationship.377 by applying it only to agreements involving family rights and domestic relations and not
As to the capacity for a corporation to enter into a contract, it has long been established that to commercial transactions. The wording of the law supports such a proposition
a foreign corporation, though considered as domiciled in the state where chartered, can because again as worded, “laws relating to family rights and duties or to status,
nevertheless make a contract in another state.378 It has been held however, that the law of condition and legal capacity of persons are binding upon citizens of the Philippines even
the place of contracting, rather than that of the state of incorporation, determines whether though living abroad.” Thus, the capacity of a person to enter into a contract
or not a corporation is precluded - when sued on the contract - from setting up the defenses commercial in nature should not be regulated by his personal law but rather by the law
of ultra vires.379 which governs the entire contract.

Essential or Intrinsic Validity


372
Salonga, page 277, Chapter 12, citing Ehrenzweig, secs 174, 175, 176 “Essential” or “intrinsic” validity refers to the nature, content, and effects of the contract.
373
374
Salonga, page 277, Chapter 12, citing Corbin, Contracts, sec. 293 Furthermore, it refers to the essence and substance of the obligation. Article 1318 of the
Salonga, page 277, Chapter 12, citing Ehrenzweig, 471
375
Scoles Civil Code states that the following requisites must concur for there to be a contract: (1)
376

377
Salonga, page 279, Chapter 12 Consent of the contracting parties; (2) Object certain which is the subject matter of the
Scoles, p. 208
378
Scoles, citing Bank of Augusta v. Earle, 38 U.S.(13 Pet.) 519, 10 L.Ed. 274 (1839) contract; and (3) Cause of the obligation which is established.
379
Scoles, citing Illinois Fuel Co. v. Mobile & Ohio R. Co., 319 Mo. 899, 8 S.W.2d 834 (1928)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
47
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Learned commentators have proposed three possible laws that could govern the questions (b) Application of the law of the chosen state would be contrary to a fundamental policy of a
relating to the intrinsic validity of contracts: (1) The law of the place of making; (2) The law state which has a materially greater interest than the chosen state in the determination of the
of place of performance; or (3) The law intended by the parties.380 particular issue and which, under the section 188, would be the state of the applicable law in
the absence of an effective choice of law by the parties.
Philippine Law on Essential Validity (3) In the absence of a contrary indication of intention, the reference is to the local law of
• There is no provision in the Philippine Civil Code which provides for the essential state of the chosen law.
validity of the contract. Furthermore, there is a scarcity of case law on the matter
which is attributed to the practice of the courts to treat Conflicts of Law cases as Section 188. Law Governing in Absence of Effective Choice by the Parties
domestic cases thereby applying the local laws. Such treatment is premised on (1) The rights and duties of the parties with respect to an issue in contract are determined
expediency and convenience to the courts as well as to the litigants in not being by the local law of the state which, with respect to that issue, has the most significant
burdened anymore with the duty to prove a foreign law. relationship to the transaction and the parties under the principles stated in section 6.
• Furthermore, Philippine domestic law promotes the policy of giving effect to the (2) In the absence of an effective choice of law by the parties, the contracts to be taken into
intention of the parties as embodied in Article 1306 of the Civil Code. account in applying the principles of section 6 to determine the law applicable to an issue
• This doctrine of party autonomy is recognized today in most codes and in great include:
majority of countries.381 (a) place of contracting
• Questions of construction and interpretation of contracts are within the contractual (b) place of negotiation of the contract
capacity of the parties. Article 1370 of the Civil Code – “If the terms of the contract (c) the place of performance
are clear and leave no doubt as to the intention of the parties, the literal meaning of its (d) the location of the subject matter of the contract
stipulations must control. If the words appear to be contrary to the evident intention (e) the domicile, residence, nationality, place of incorporation and place of business of
of the parties, the latter shall prevail over the former.” the parties.
• Furthermore, Article 1371 provides that the intention of the contracting parties is These contacts are to be evaluated according to their relative importance with respect
judged by their contemporaneous and subsequent acts. Moreover, the law looks at the to the particular issue.
acts of the parties and their surrounding circumstances which may possibly have (3) If the place of negotiating the contract and the place of performance are in the same
exerted some influence upon their actions, and then assumes that their intentions are state, the local law of the state will usually be applied, except as otherwise provided in
in harmony with such acts and circumstances.382 sections 189-203.
• In the United States, Prof. Weintraub posited that there are two rules which have
gained great acceptance: (1) The parties may choose the governing law; (2) In the As to the second part of the rule as mentioned by Prof. Weintraub, although inherently
absence of such a choice, the applicable law is that of the State that “has the most ambiguous it means that the courts will consider the various contacts that states have with
significant relationship to the transaction and the parties.”383 the transaction, and after weighing their relative significance to the case at hand, not merely
The rule as posited by Prof. Weintraub is actually expressed in Sections 187 and 188 of the counting them, conclude that one state should govern the transaction because its total
Second Restatement of Conflict of Laws which provide: relationship is the most important.384 If the contract is negotiated, completed, and performed
all in one state, this state ordinarily determines its validity. 385 If however, a contract is
Section 187. Law of the State Chosen by the Parties negotiated, completed and performed in different states the court will then have to consider
(1) The law of the state chosen by the parties to govern their contractual rights and duties various factors such as the domicile of the contracting parties, place of business, place of
will be applied if the particular issue is one which the parties could have resolved by an incorporation, place of performance, place of payment and others. In commercial
explicit provision in their agreement directed to that issue. undertakings, for example, which call for repayment of money, the law applicable to most
(2) The law of the state chosen by the parties to govern their contractual rights and duties substantial issues will be that of the place of payment. However, in a personal family
will be applied if the particular issue is one which the parties could not have resolved by an transactions, such as a contract to will property, greater weight will attach to the domicile.386
explicit provision in their agreement directed to that issue, either:
(a) The chosen state has no substantial relationship to the parties or the transaction and
there is not other reasonable basis for the parties’ choice, or

380
Coquia
381 384
Salonga, page 287, Chapter 12, citing II Rabel, 370-371 Scoles, citing Vanston Committee v. Green, 329 U.S.156, 67 S.Ct. 237 (1946)
382 385
Coquia, citing Grand v. Livingston, 4 App. Div. 589, 38 NYS 490 (1896) Scoles, citing the Second Restatement, 3326
383 386
Salonga, page 277, Chapter 12, citing Cheshire, 214 Scoles, citing, Emery v. Burbank, 163 Mass. 326, 39 N.E. 1026 (1895)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
48
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Particular Contracts involves a foreign element. Apart from the Civil Code provisions on arbitration,391 Congress
Money Deposits enacted Republic Act 876 in 1953, and Republic Act 9285 in 2004, both of which embody a
Specific sums of money taken and held on account by a bank, as a service to its clients. Such clear legislative policy in favor of settling controversies by a means of arbitration – a method
deposits of money, whether in sum or in specie are naturally bound to the place of the considered more expeditious, less expensive, and with a greater chance for substantial
banking or financial institution to which they are entrusted. Logically, the law of that place justice.
governs the deposit.387 • LM Power Engineering Corp. vs. Capitol Industrial Construction 392 – The Supreme Court
Dr. Ernst Rabel, cited 2 reasons for the rule that money deposits are governed by law of the upheld the validity of an arbitration clause in the subcontracting agreement. It further
place where they are deposited: (1) The money is brought to that place to be conserved and stated that alternative dispute resolution methods or ADRs -- like arbitration,
repaid there; and (2) The transaction is one of a mass of similar transactions by the mediation, negotiation and conciliation – should be encouraged because “enabling
institution.388 parties to resolve their disputes amicably, they provide solutions that are less time-
Ruben Martinez vs. Court of Appeals,389 – the Supreme Court, citing Rabel, maintained the rule consuming, less tedious, less confrontational, and more productive of goodwill and
that money deposits are naturally bound to the place of the banking or financial institution to lasting relationships.”
which they are entrusted. Hence, if a Filipino makes a deposit with the Swiss Credit Bank in An arbitration clause may nevertheless be challenged and held invalid if it designates a biased
Zurich, all questions arising from the deposit such as service charges, the manner of keeping party as the arbitrator.393
the deposit, the effects of currency fluctuations, the mode of withdrawal of the deposits in
Switzerland will usually be determined by the law prevailing in that place. Choice-of-Forum
Thus, Swiss banking privacy laws have made it possible for persons of all nationalities to A Choice-of-Forum or forum selection clause, on the other hand, is a provision subjecting any
safeguard their assets and to keep them away from inquiry. In protecting their customers’ litigation or controversy between the parties to a specified court or forum. It points to two
privacy, Swiss banks have also become an instrument in the money laundering practices of things: First, it determines the specific process by which parties agree expressly to litigate all
businesses and individuals. disputes concerning a contract and secondly, it can specify the venue by implication.394 Thu
s, a choice-of-forum clause or forum selection clause simply designates whether a dispute is
Contracts With Arbitration and Choice of Forum Clauses to be resolved by a court and/or an alternative adjudication process such as an arbitration
An Arbitration Clause is a commonly used clause in a contract that requires the parties to panel.
resolve their disputes through an arbitration process. Although such a clause may or may not As with arbitration clauses, Philippine courts have also looked with disfavor on contracts
specify that arbitration occur within a specific jurisdiction, it always binds the parties to a with choice-of-forum clauses on the ground that such a clause would oust them of their
type of resolution outside of the courts, and is therefore considered a kind of forum rightful jurisdiction. They have consistently held in the past that such clauses are
selection clause. unenforceable if the effect would be to oust the jurisdiction of the local courts.
Providing for arbitration or choice-of-forum clauses are considered to be a fast and relatively • Rafael Molina vs. Antonio dela Riva395 – An American corporation delivered to a German
inexpensive means for ensuring that a construction dispute is correctly and fairly resolved. In company a consignment of agricultural machinery to be carried on a German steamer
the past, however, Philippine courts have looked with disfavor on contracts that provided for with Russia as its destination. The bill of lading stipulated that in case of disputes under
arbitration on the ground that such arbitration clauses would oust them of their rightful the contract, the question would be, at the carrier’s option, decided exclusively by
jurisdiction. The courts at that time believed that arbitration is merely a matter of German courts applying German law. During the voyage, however, war broke out
procedure rather than of substance such that judicial remedies at the forum should be between Germany and Russia. The ship was forced to dock in Manila and the shipper
controlling. asked for either a transshipment of goods to Russia or surrender by the carrier. The
• Companie de Commerce vs. Hamburg-Amerika390 – A French shipper of goods aboard a carrier refused and the shipper instituted a suit in Manila. The carrier challenged the
German vessel that had taken refuge in Manila due to the outbreak of the first World jurisdiction of Philippine courts, pursuant to the terms of the bill of lading. The
War, sued the carrier in Manila for damages. The Supreme Court held that in spite of Supreme Court held that the Philippine courts have jurisdiction since the contractual
the arbitration clause under the charter party, Philippine courts had jurisdiction, adding stipulations cannot operate to oust the courts of their rightful jurisdiction.
that it was not alleged and proved that compliance with the provision was a condition
precedent for the enforcement of the contract.
Fortunately, in view of the changing times, this old view has become obsolete. Arbitration is 391
Art. 2042 The same persons who may enter into a compromise may submit their controversies to one or more arbitrators for decision.
now an accepted mode of setting disputes, regardless of whether or not the contract Art. 2043. The provisions of the preceding Chapter upon compromises shall also be applicable to arbitrations.
Art. 2044. Any stipulation that the arbitrators' award or decision shall be final, is valid, without prejudice to Articles 2038, 2039, and 2040.
Art. 2045. Any clause giving one of the parties power to choose more arbitrators than the other is void and of no effect.
Art. 2046. The appointment of arbitrators and the procedure for arbitration shall be governed by the provisions of such rules of court as
the Supreme Court shall promulgate.
387 392
Jovito R. Salonga, Private International Law (1995) LM Power Engineering Corp. vs. Capitol Industrial Construction, G.R. No. 141833, March 26, 2003
388
Ernst Rabel, The Conflict of Laws: A Comparative Study, 2nd edition (1958) 393
Salonga
389 394
Ruben Martinez vs. Court of Appeals, G.R. No. 131673, September 10, 2004 Javad Heydary, Anatomy of an IT Contract -- Choice of Law, Forum, Venue (2005)
390 395
Companie de Commerce vs. Hamburg-Amerika, G.R. No. L-10986, March 31, 1917 Rafael S. Molina vs. Antonio de la Riva, G.R. No. L-2521, March 22, 1906

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
49
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Fortunately, to reduce the burden on court systems in resolving disputes and to protect the • Since 1934, the international air transportation of passengers has been governed
interest of the parties in a contract, the Supreme Court has abandoned the old view and primarily by the Warsaw Convention, a multilateral treaty governing international
adopted a new rule regarding choice-of-forum clauses in contracts. aviation, adhered to by the Philippines and by most other countries whose airlines have
Where there is no fraud or overreaching, and there is no showing that the enforcement of international routes. It is an international convention which regulates liability for
the choice-of-forum clause would be unreasonable or unjust, the clause must be given international carriage of persons, luggage or goods performed by aircraft for reward.
effect.396 The Convention was originally signed in 1929 in Warsaw, was amended in 1955 at The
• Unterweser Reederei GMBH vs. Zapata Off-Shore Co. Hague, and in 1975 in Montreal.
Facts: Zapata disregarded the choice-of-forum clause in the agreement and commenced a • The Convention was concurred in by the Philippine Senate, per Resolution No. 19, on
suit for damages in the Federal Court in Tampa, Florida. On the other hand, Unterweser May 16, 1950. The instrument of accession was signed by President Quirino on
sought damages for breach of contract in the High Court of Justice in London and obtained October 13, 1950 and became applicable to the Philippines on February 9, 1951. On
permission to serve process on Zapata. Zapata appeared there to challenge the assumption September 23, 1955, President Magsaysay issued Proclamation No. 201, declaring the
of jurisdiction. The English judge found that Zapata had failed to show unfairness of the Philippines’ formal adherence to the Convention.400 Thus, by the principle of pacta sunt
choice-of-forum clause and held that Zapata should be required to stick to its bargain. The servanda, 401 the Warsaw Convention became binding to all the parties to the treaty
decision was upheld on appeal. including the Philippines.
Held: The Supreme Court held that the choice-of-forum clause in a contract should be
upheld unless it is unreasonable and unjust. “The expansion of American business and Applicability of the Warsaw Convention
industry will hardly be encouraged if, notwithstanding solemn contracts, we insist on a • The Warsaw Convention was designed to protect the then infant air industry and to
parochial concept that all disputes must be resolved under our law and in our courts. There alleviate the complexity of potential litigation in various States with conflicting choice-of-
are compelling reasons why a freely negotiated private international agreement, unaffected by law rules differing limits on damages that may be recovered. The Convention limits the
fraud, undue influence, or overwheening bargaining power such as that here should be given available places of instituting suits and applies to all international carriage of persons,
effect. The choice of neutral forum with experience in shipping litigation was not baggage, or goods performed by aircraft for hire, as that term is defined. It does not,
unreasonable. There is strong evidence that the forum clause was a vital part of the however, apply to carriage of mail and postal packages.402
agreement.“ Elimination of uncertainties as to the place of litigation by agreeing in advance on • In order for the Warsaw Convention to apply, the passenger must be informed of this
a forum acceptable to both parties is an indispensable element in international trade, fact. Article III requires airlines to deliver to the passenger a ticket containing a
commerce and contract. "statement that the transportation is subject to the rules relating to liability established
Moreover, in the case of Scherk vs. Alberto-Culver Co., the Supreme Court concluded that a by this convention". Further, the ticket must be delivered in time to allow the passenger
"forum clause should control absent a strong showing that it should be set aside. Much to take out insurance if he so desires.
uncertainty and possibly great inconvenience to both parties could arise if a suit could be • The Convention does not cover all possible questions or definitions. Among those not
maintained in any jurisdiction in which an accident might occur or if jurisdiction were left to expressly defined are the definition of injury as including or excluding mental anguish
any place where personal or in rem jurisdiction might be established. The elimination of all caused by hijacking or flight delay, the definition of embarkation or disembarkation as
such uncertainties by agreeing in advance on a forum acceptable to both parties is an extending to waiting room areas, the definition of willful misconduct which removes the
indispensable element in international trade, commerce, and contracting."397 limitation on damages, the contributory negligence defense, and the tolling of statutes of
Other Notable Views From Jurisprudence limitations. On these and other questions, the lex fori403 may provide the answer, which
• Pakistan International Airlines vs. Ople 398 – the Supreme Court held that where the may lead to the applicability of a number of divergent laws.404
relationship between the parties is affected with public interest and the multiple and • Where the passengers are residents and nationals of the forum and the ticket is issued
substantive contacts of the contract are with Philippine law, Philippine courts and in such State by the defendant airline, the court may justifiably apply the law of the
agencies may not be ousted of their jurisdiction. forum in a suit covered by the provisions of the Warsaw Convention.
• K.K. Shell Sekiyu Osaka Hatsubaisho vs. Court of Appeals399 – the Supreme Court held that • In cases where the Convention does not apply, the validity of the contract of carriage as
when the choice-of-forum clause in a contract or agreement has not been conclusively well as the rights created thereby are determined, in the absence of an effective choice
shown to be binding due to ambiguity or lack of evidence, it will not operate to oust of law by the parties, by the local law of the State from which the passenger departs or
the local courts of their jurisdiction.

Air Transportation Contracts 400


Salonga
401
Pacta sunt servanda, the “Fundamental principle of the law of treaties,” is the notion that every treaty in force is binding upon the parties
to it and must be performed by them in good faith.
396 402
Salonga Article 1 and 2, Warsaw Convention
397 403
Scherk v. Alberto-Culver Co., 417 U.S. 506, 1974 “Law of the forum” - law of the court in which proceedings are being conducted. In other words, it refers to the jurisdiction where the
398
Pakistan International Airlines vs. Hon. Blas Ople, GR No. 61594 September 28, 1990 lawsuit in question has been instituted.
399 404
K.K. Shell Sekiyu Osaka Hatsubaisho, et al. vs. Court of Appeals, G.R. Nos. 90306-07, July 30, 1990 Salonga

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
50
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the goods are dispatched, unless with respect to the particular issue, some other State does not regulate or exclude liability for other breaches of contract by the carrier, or
has a more significant relationship to the contract and to the parties. misconduct of its employees, or for some particular or exceptional type of damage. A
• In the absence of an effective choice of law, the courts have usually applied the local law passenger is entitled to an award of nominal damages due to the carrier’s failure to
of the State of departure, sometimes on the stated ground that is was the place of deliver her luggage on time.
making or the center of gravity of the contract. The forum has a sound legitimate basis • The Warsaw Convention creates a presumption of liability against the air carrier for
for the application of the policy found on its own internal law “when it is the center of injury to and death of passengers engaged in international travel. However, certain
gravity of the contract and has the most significant relationship to the parties and the defenses are provided whereby the carrier may avoid liability entirely.
contract.”405
The Montreal Convention
Liabilities Under the Convention • The Montreal Convention is a treaty adopted by a meeting of ICAO409 member states
• Chapter III of the Warsaw Convention, as amended, regulates the liability of the in 1999. It replaced the Warsaw Convention's regulations concerning compensation for
carrier. Article 17 makes the carrier liable in the event of death or wounding of any the victims of air disasters. Under the Montreal Convention, air carriers are liable for
passenger or any other bodily injury suffered by the passenger if the accident which up to $135,000 per passenger in case of an accident, with unlimited liability if the
caused the damage took place on board the aircraft or in the course of the operation carrier itself is at fault. The Convention also allows victims' families to sue foreign
of embarking or disembarking. Likewise, the carrier is liable for damage sustained in carriers in their own country of citizenship, and requires all air carriers to carry liability
the event of loss of, or damage to, any checked baggage if the occurrence which caused insurance.
the damage took place during the transportation by air – a term which comprises the • The Montreal Convention, will replace the Warsaw Convention system, once Montreal
period during which the baggage or goods are in the charge of the carrier, whether in has been ratified by all States. Until then, however, there will be a patchwork of rules
an airport or on board an aircraft or, in the case of landing outside of an airport, in any governing international carriage by air, as different States will be parties to different
place whatsoever.406 agreements (or no agreement at all). As additional countries ratify the Montreal
• The carrier is liable for damage occasioned by delay in the transportation by air of Convention, it will ultimately replace the Warsaw Convention of 1929.
passenger, baggage or goods. 407 The Convention only applies to the air carrier and • Santos III vs. Northwest Airlines
does not apply to the airplane manufacturer or component part manufacturer which Facts: On October 21, 1986, Santos, a minor and a resident of the Philippines, purchased
may bear responsibility for the loss. from Northwest Orient Airlines (NOA) a round-trip ticket in San Francisco, U.S. for his
• Article 22 of the original Warsaw Convention limited the maximum compensation for flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from
the death of a passenger to approximately $8300 US. At the same time, it provided for Tokyo was December 20, 1986. No date was specified for his return to San Francisco. On
unlimited liability if the damage was caused by the willful misconduct of the carrier or December 19, 1986, Santos checked in at the NOA counter in the San Francisco airport for
any of its employees. The amended Convention now limits the maximum his scheduled departure to Manila. Despite a previous confirmation and reconfirmation, he
compensation for injury or death to passengers on a journey to or from the United was informed that he had no reservation for his flight from Tokyo to Manila. He therefore
States to $75,000 US per passenger inclusive of legal fees and costs; if exclusive of legal had to be waitlisted.
fees and costs, the limit is $58,000 US. Liability up to such limit does not depend on On March 12, 1987, Santos, through his father and legal guardian, sued NOA for damages in
the negligence on the part of the carrier. Where the journey is not to, from, or has no the RTC of Makati. NOA moved to dismiss the complaint on the ground of lack of
agreed stopping place in the United States, the liability of the carrier for death of or jurisdiction, citing Article 28(1) of the Warsaw Convention, which provides that at the
personal injury to passengers is limited in most cases to approximately $10,000 - option of the plaintiff, an action for damages must be brought in the territory of one of the
$20,000 US. High Contracting Parties, either before the court of the domicile of the carrier or of his
• Article 25, as amended, provides that the limits of liability specified in Article 22 will principal place of business, or where he has a place of business through which the contract
not apply if it is proved that the damage resulted from an act or omission of the has been made, or before the court at the place of destination. In February 1988, the lower
carrier, his servants or agents, done with intent to case damage or recklessly and with court granted the motion and dismissed the case. Santos appealed to the Court of Appeals,
knowledge that damage would probably result, provided that in such a case, it is proved which affirmed the decision of the lower court. A motion for reconsideration was denied.
that the servant or agent was acting within the scope of his authority. Hence, this appeal, which raises several questions, including the proper interpretation of
• Alitalia vs. Intermediate Appelate Court 408 – the Supreme Court held that the Warsaw Article 28(1) of the Warsaw Convention.
Convention does not operate as an absolute limit of the extent of an airline’s liability; it Held: The Supreme Court, through Mr. Justice Cruz, held, among other things, that Article
28(1) is a jurisdiction and not a venue provision. Venue and jurisdiction are entirely distinct
matters. Jurisdiction may not be conferred by consent or waiver upon a court which
405
Salonga
406
Article 18, Warsaw Convention
407 409
Article 19, Warsaw Convention International Civil Aviation Organization (ICAO), an agency of the United Nations, develops the principles and techniques of
408
Alitalia Airways vs. Court of Appeals, G.R. No. 77011, July 24, 1990 international air navigation and fosters the planning and development of international air transport to ensure safe and orderly growth.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
51
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
otherwise would have no jurisdiction over the subject matter of an action; but the venue of were cancelled indefinitely because NAIA was closed. JAL rebooked them on flights due to
an action as fixed by statute may be changed by consent of the parties. The place of depart on June 16. JAL paid for their unexpected overnight stay.
destination, within the meaning of the Warsaw Convention, is determined by the terms of Unfortunately, the June 16 flight was also cancelled. JAL informed the stranded passengers
the contract of carriage, or, specifically in this case, the ticket between the passenger and the that it would no longer shoulder their expenses. The passengers stayed in Japan until the
carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San 22nd and were forced to pay meals and accommodations from their personal funds. The
Francisco. Although the date of the return flight was left open, the contract of carriage passengers filed an action for damages against JAL, claiming that JAL failed to live up to its
between the parties indicates that NOA was bound to transport the petitioner to San duty to provide care and comfort to its stranded passengers when it refused to pay for their
Francisco from Manila. Manila should therefore be considered merely an agreed stopping hotel and accommodation expenses from June 16 to 21.
place and not the destination. the unexpected eruption of Mt. Pinatubo.
• Article 1(2) also draws a distinction between a “destination” and an “agreed stopping Held: JAL is cannot be faulted for a fortuitous event. However, JAL is liable for nominal
place.” It is the “destination” and not an “agreed stopping place” that controls for damages. JAL is not liable for the expenses incurred by the passengers, since the reason why
purposes of ascertaining jurisdiction under the Convention. JAL was prevented from resuming its flight to Manila was due to the effects of the Mt.
• The contract is a single undivided operation, beginning with the place of departure and Pinatubo eruption, which was a fortuitous event. However, JAL is not completely absolved
ending with the ultimate destination. The use of the singular in this expression from liability. It must be noted that the passengers bought tickets from the US with Manila as
indicates the understanding of the parties to the Convention that every contract of their final destination. While JAL was no longer required to defray the passengers’ living
carriage has one place of departure and one place of destination. An intermediate expenses during their stay in Japan on account of the fortuitous event, JAL had the duty to
place where the carriage may be broken is not regarded as a “place of destination.” make the necessary arrangements to transport the passenger on the first available connecting
• With respect to transportation by successive carriers, as long as they fall within the flight to Manila. JAL reneged on its obligation to look after the comfort and convenience of
definition of Article 1, each carrier who accepts passengers of baggage shall be subject its passengers when it declassified them from “transit passengers” to “new passengers,” as a
to the rules set out in the Convention, and shall be deemed as one of the contracting result of which they were obliged to make the necessary arrangements themselves for the
parties insofar as the contract deals with that part of the transportation which is next flight to Manila.
performed under his supervision. In case of transportation of this nature, the • Because of JAL’s failure to make the necessary arrangements to transport the
passenger or representative can take action only against the carrier who performed the passengers on its first available flight to Manila, an award of P100,000 as nominal
transportation during which the accident or delay occurred, save in the case where by damages, in favor of each passenger, is proper.
express agreement the first carrier has assumed liability for the whole journey. As • Singapore Airlines Limited vs. Court of Appeals
regards baggage or goods, the passenger or consignor shall have a right of action Facts: Sancho Rayos was an overseas contract worker who had a contract with Arabian
against the first carrier, and the passenger or consignee who is entitled to delivery shall American Oil Company (ARAMCO). As part of ARAMCO’s policy, its employees returning
have a right of action against the last carrier. Furthermore, each may take action to Saudi from Manila were allowed to claim reimbursement for amounts paid for excess
against the carrier who performed the transportation during which the loss, damage or baggage up to 50Kg as long as supported by receipt. Rayos took a Singapore Airlines (SLA)
delay took place. These carriers shall be jointly and severally liable to the passenger, or flight to Saudi with a 50Kg excess baggage for which he paid about 4K. ARAMCO reimbursed
to the consignor or consignee. the amount upon presentation of the excess baggage ticket.
• In case where the Convention does not apply, the Second Restatement holds that the
validity of the contract of carriage as well as the rights created thereby are determined, Later, Rayos learned that he was being investigated by ARAMCO for fraudulent claims. He
in the absence of an effective choice of law by the parties, by the local law of the State asked his wife in Manila to obtain a written confirmation from SLA the he paid an excess
from which the passenger departs or the goods are dispatched, unless with respect to baggage of 50Kg. SLA’s manager notified the wife of its inability to issue the certification
the particular issue, some other State has a more significant relationship to the because the records showed that only 3Kg were entered and charged as excess baggage. SLA
contract and to the parties. issued the certification four months later, after the wife threatened it with a lawsuit.
• Where the passengers are residents and nationals of the forum and the ticket is issued When the year ended, Rayos’ contract with ARAMCO was not renewed. Convinced that
in such State by the defendant airline, the court may justifiable apply the law of the SLA was responsible for the non-renewal of the contract, the spouses Rayos filed an action
forum in a suit covered by the provisions of the Warsaw Convention. for damages against SLA. SLA filed a third-party complaint against its handling agent PAL,
• Japan Airlines vs. Court of Appeals claiming that the tampering was committed not by SLA but by PAL. PAL denied any
Facts: On June 13, 1991, Jose Miranda boarded a JAL flight from San Francisco to Manila. participation in the tampering and attributed it to the SLA personnel. The lower court held
Enrique Agana,Maria Angela Agana, and Adelia Francisco were also passengers of a JAL flight SLA liable to the spouses for damages and ordered PAL as third party defendant to pay SLA
from LA to Manila. As an incentive for traveling with JAL, the flights made an overnight whatever it will pay the Rayos spouses.
stopover in Japan at the airline’s expense. Held: SLA is entitled to reimbursement from PAL, but only to the extent of one-half (½) of
Upon arrival in Japan on June 14, the passengers were billeted in Hotel Nikko Narita for the the amount that it paid to the Rayos spouses. PAL cannot be held solely liable for the
night. The following day, they learned that Mt. Pinatubo erupted, and all flights to Manila satisfaction of the entire judgment. While the proximate cause of the nonrenewal of Rayos’
employment contract was the tampering of his excess baggage ticket by PAL’s personnel, the
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
52
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
immediate cause of such non-renewal was SLA’s delayed transmittal of the certification o For the purpose hereof -
needed by Rayos to prove his innocence to his employer. Thus, the non-renewal of Rayos’ o If the originator or the addressee has more than one place of business, the place of
employment contract was the natural and probable consequence of the separate tortious business is that which has the closest relationship to the underlying transaction or,
acts of SLA and PAL. Under Article 2176, Rayos is entitled to compensation for such where there is no underlying transaction, the principal place of business.
damages. Inasmuch as the responsibility of two or more persons, or tort-feasors, liable for a o If the originator of the addressee does not have a place of business, reference is to
quasi-delict is joint and several and the sharing as between such solidary debtors is pro-rata, be made to its habitual residence; or
it is but logical, fair, and equitable to require PAL to contribute to the amount awarded to o The usual place of residence. in relation to a body corporate, means the place
the Rayos spouses already paid by SIA, instead of totally indemnifying the latter. where it is incorporated or otherwise legally constituted.
o The Rules on Electronic Evidence thus give a presumption on the place where the
Cyberspace Transactions transaction occurred. This is important in resolving conflict of laws because it
• “Cyberspace has no territorially based boundaries, because the cost and speed of determines the real seat of the transaction. Such determination may be the basis
message transmission on the Internet is almost entirely independent of physical for Philippine courts to assume jurisdiction. It must be noted, however, that the
location. Messages can be transmitted from one physical location to any other location determination is merely a presumption that is not conclusive and may give way to
without degradation, decay, or substantial delay, and without any physical barriers that proof showing the contrary.
might otherwise keep certain geographically remote places and people separate from
one another. The Internet enables transactions between people who do not know, and Enforcement of Foreign Contract Claims
in many cases cannot know, each other's physical location. The power to control • The enforcement of a foreign contract claim involves a process where a local court
activity in cyberspace has only the most tenuous connections to physical location.410” recognizes and enforces a foreign contract claim. To avoid possible confusion and to
• The advent of the Age of Cyberspace has created a global environment wherein one simplify litigation, the parties to such contracts usually include arbitration or choice-of-
country's laws may conflict with another's. In this situation, contracts and transactions forum clauses which would subject any litigation or controversy between the parties to
may be completed over the internet thus causing confusion as to the applicability and a specified court or forum.
enforceability of laws on such contracts or transactions. • In the absence of an effective choice, the state with which the contract has its most
• Although Philippine laws are somewhat lacking with respect to transactions over the significant relationship could assume jurisdiction. Under Philippine rules of procedure,
internet, several steps have already been made to respond to such deficiency. Most as long as the court can assume jurisdiction over the person of the defendant in what is
notably, at the start of the new millennium, Philippine Congress enacted the E- essentially a personal action, then it has competence to hear and adjudicate the case.
Commerce Act.411 Not only did the law recognize the legality and validity of electronic
documents412, it also laid down the rules on the use of electronic documents, especially • The Supreme Court demonstrated such assumption of jurisdiction in King Mau Wu v.
for transactions. The Supreme Court also affirmed this doctrine in the Rules on Sycip,415 which involved a contract of agency executed in New York between plaintiff, a
Electronic Evidence.413 non-resident, and defendant, a resident of the Philippines. It was contended by the
• In terms of electronic commerce, the E-Commerce Act recognized the validity of latter that as the contract was executed abroad, the Court had no jurisdiction over the
contracts formed and entered into by the parties through electronic means.414 For the case. The Supreme Court held that the contention was without merit “because a non-
purpose of determining the place of execution of the electronic contract, Section 23 of resident may sue a resident in the courts of this country where the defendant may be
the law is illuminating: summoned and his property leviable upon execution in case of a favorable, final and
• SEC. 23. Place of Dispatch and Receipt of Electronic Data Messages or executory judgment. It is a personal action for the collection of a sum of money which
Electronic Documents. Courts of First Instance have jurisdiction to try and decide.”
o Unless otherwise agreed between the originator and the addressee, an electronic • Whether jurisdiction is based on the presence or residence of the defendant in the
data message or electronic document is deemed to be dispatched at the place forum or the existence of defendant’s property or business within the territory, or on
where the originator has its place of business and received at the place where the the fact that the forum has some connection with the transaction or event in question,
addressee has its place of business. This rule shall apply even if the originator or it seems clear that the forum has the freedom to refuse to assume jurisdiction for such
addressee had used a laptop or other portable device to transmit or receive his reason as it may consider justifiable. Thus, courts have occasionally refused to hear
electronic data message or electronic document. This rule shall also apply to cases on the ground of either forum non conveniens or because of some purported
determine the tax situs of such transaction. adverse public policy.416
• Where, for example, a non-resident plaintiff is merely engaged in forum-shopping or
410
where the main facts of the case occurred, let us say, in New York, and the witnesses
David Johnson & David R Post, Law and Borders - The Rise of Law in Cyberspace, 48 Stan. L. Rev. 137, 1370-71, 1996
411
R.A. 8792
412
E-Commerce Law, Sec. 6 and 7.
413 415
Rule 3, Section 1. King Mau Wu vs. Francisco Sycip, G.R. No. L-5897, April 23, 1954
414 416
Sec. 16. Scoles, citing Klein vs. Keller, 42 Okl. 592, 594, 141 P. 1117, 1118 (1914)

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
53
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
and the evidence are readily available there, a Philippine court may refuse to assume DEFINITION OF BUSINESS ASSOCIATIONS
jurisdiction over the case on the ground of forum non conveniens.417 No principle or • A group of persons who join together for the purpose of engaging in business is
doctrine of Public International Law is violated by such refusal.418 considered an ordinary business association. The association may or may not be
• The forum may assume jurisdiction but nevertheless refuse to apply the foreign law endowed with a distinct legal personality, depending on the nature and character of the
normally applicable on the ground that the plaintiff’s claim is contrary to an important organization and the applicable law. In the Philippines, business associations may either
public policy or concept of morality of the forum. It should however, take a very strong be incorporated or unincorporated. The most popular way of doing business today is
case to bar recovery on a foreign contract on the ground of supposed conflict with local through a corporation. For a small enterprise, a partnership is usually preferred. It is
public policy of morality, since, as stated by Judge Goodrich,419 “It is hard to think of the best example of an unincorporated business association.
many transactions which have the stamp of approval of the law of some civilized state
upon them which reek so of immorality that to give money judgment upon the claim will DEFINITION OF CORPORATIONS
jeopardize the ethical standards of the forum.” There is much to be said for the policy • According to Chief Justice Marshall in a leading case,420 “A corporation is an artificial
of enforcing obligations deliberately contracted and legally entered into. A paramount being, invisible, intangible, and existing only in contemplation of law. Being a mere
public policy is a day of easy communication and unlimited international business is the creature of the law, it possesses only those properties which the charter of its creation
enforcement of contractual undertakings. Otherwise, the forum could be a “sanctuary confers upon it, either expressly, or as incidental to its very existence. It is a body,
for those seeking to avoid their legal obligations.” which in its corporate capacity is the mere creature of the act to which it owes its
• Where the forum refuses to assume jurisdiction over the plaintiff’s claim or, assuming existence.”
jurisdiction, nevertheless dismisses the case on the ground of countervailing public • More particularly, the Corporation Code of the Philippines has given us a statutory
policy, the plaintiff is prejudiced but is not without remedy. Since there has been no definition of the corporation, in Sec. 2:
adjudication on the merits, he can sue the defendant in a more appropriate forum and • A corporation is an artificial being created by operation of law, having the right of
perhaps obtain a favorable judgment. succession and powers, attributes and properties expressly authorized by law or
• However, the situation is different if the court assumes jurisdiction over the case and incident to its existence.
receives the evidence of the parties, but strikes down defendant’s defenses which would • In Joseph Beale’s point of view, as explained in his book, Treaties on the Conflicts of
be valid under the foreign law normally applicable, on the ground that such defenses are Laws, “It is however, possible for the State to confer personality on a group, so that it
allegedly against the public policy of the forum. Here, the court may be imposing upon shall have a personality of its own, apart from that of its members; and this is now so
the defendant a liability not contemplated by the parties and unrelated to the law with commonly done that most states by general statute provide a means for doing this in
reference to which they entered into their contract. As there has been a final the case of any lawful business or charitable group that cares to take advantage of it.
disposition on the merits of the case in favor of the plaintiff, the defendant may have The process is called incorporation, and the group a corporation. Incorporation
been exposed to an irremediable liability. This is why public policy should be used therefore is the process of giving legal personality to a group.” It would seem that such
sparingly by a court, unless there is a gross contradiction between a party’s claim and an explanation as to the nature of a corporate entity is a more simple yet easier to
important policy of the forum. understand than the explanation of the previous learned author. However, a
• Although the court has the freedom to assume or refuse jurisdiction for such reason as corporation is a complex entity and cannot be explained fully in simple words. Such
it may consider justifiable, the fundamental policy in the broad local law of contracts is entity has to be dissected and discussed piecemeal.
to give effect to the justified expectations of the parties. Because the economic and
industrial system is based on the need for performing agreements, this protection of Domicile
justified expectations responds to the need for certainty, predictability and commercial • A corporation, according to the theory of our law, must be located somewhere within
convenience. the country which creates it. So strictly was this theory once held in England that it was
thought essential that a corporation should be named as of some place in England; and
BUSINESS ASSOCIATIONS AND MULTINATIONAL ENTERPRISES such corporations were created as “The Hospital of St. Lazarus of Jerusalem in
C/O: CHRIS GERONA, MACE WONG, INXS SINGSON, DINGDONG POQUIZ, ERIC England” and “The Prior and Brothers of St. Mary of Mt. Carmel in England,” the
BACSAL, PAUL IMPERIAL allegation that the place was in England not being assumable. Even after the
(Salonga, CHAPTER XXX, 1995) corporations began to be formed for trading purposes, they were still located in
England.
• According to Article 51 of the Civil Code of the Philippines:

417
Forum non conveniens – a doctrine upon which a local court may find a foreign court to be more appropriate than the local court to deal
with the issue in question
418
Salonga
419 420
Goodrich, Herbert F. and Scoles, Eugene F. Conflict of Laws. West Publishing Company, St. Paul, Minnesota. 1976 198-199 Marshall, C.J., in Dartmouth College v. Woodward, 4 Wheat. 518, 636, 4 L. ed. 629 (1819).

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
54
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• When the law creating or recognizing them, or any other provision does not fix the control of the enterprise, may be found in the business seat, which is the principal place
domicile of juridical persons, the same shall be understood to be the place where their of business.
legal representation is established or where they exercise their principal functions. • Through the passage of time, jurisprudential and statutory laws have given us several
• In order to understand further, the Supreme Court explained fully how to consider tests to determine a corporation’s nationality.
Philippine branches or units as “residents of the Philippine Islands.” o The Place of Incorporation Test means that a corporation is a national of the country
• State Investment House, Inc. vs. Citibank, N.A. under whose laws it has been organized and registered. This is specifically
Facts: Bank of America N.T. and S.A., Citibank N.A. and Hongkong and Shanghai Banking embodied in Sec. 123 of the Corporation Code which provides:
Corporation jointly field with the CFI of Rizal a petition for involuntary solvency of o A foreign corporation is one formed, organized or existing under any laws other
Consolidated Mine, Inc. It was alleged that CMI obtained loans from the three banks and that than those of the Philippines and whose laws allow Filipino citizens and corporation
CMI committed specific acts of insolvency for the purpose of delaying or defrauding to do business in its own country or state.
creditors. The petition was opposed by State Investment House and State Financing, Inc. o Under the Place of Principal Business Test, the corporation is a “national” or subject
which had earlier instituted actions for collection of sums of money and damages against CMI to the jurisdiction of the place where its principal office or center of management
claiming among others, that the court had no jurisdiction to take cognizance of the petition (siege social) is located.
for insolvency because petitioners are not resident creditors of CMI in contemplation of the o The Grandfather Test is the method by which the percentage of Filipino equity in a
Insolvency Law. CMI likewise alleged petitioner’s lack of capacity to sue. The trial court corporation engaged in nationalized and/or partly nationalized areas of activities,
rendered a summary judgment dismissing the petition for lack of jurisdiction over the subject provided for under the Constitution and other nationalization laws, is computed, in
matter, ruling that an insolvency court could not acquire jurisdiction to adjudicate the debtor cases where corporation shareholders are present in the situation, by attributing
as insolvent if the creditors petitioning for adjudication of insolvency are not residents of the the nationality of the second or even subsequent tier of ownership to determine
Philippines. Since petitioners had been merely licensed to do business in the Philippines, they the nationality of the corporate shareholder.
could not be deemed residents thereof. The appellate court reversed the decision of the trial o In recognizing and applying the grandfather rule, the SEC has adopted the formula
court. of the Secretary of Justice in DOJ Opinion No. 18 saying:
Held: The Supreme Court opined that it cannot accept the petitioner’s theory that Shares belonging to corporations or partnerships at least 60% of the capital of
corporations may not have residence separate from their domicile and that they may be which is owned by Filipino citizens shall be considered as Philippine nationality, but
considered by other states as residents only for limited and exclusive purposes. Of course, as if the percentage of Filipino ownership in the corporation or partnership is less
petitioners correctly aver, it is not really the grant of license to a foreign corporation to do than 60%, only the number of shares corresponding to such percentage shall be
business in this country that makes it’s a resident; the license merely gives legitimacy to its counted as of Philippine nationality.
doing business here. What effectively makes such corporation in the Philippines is its actually It must be remembered that the SEC Rule applies only with the objective of
being in the Philippines and licitly doing business here, “locality of existence” being, to repeat, determining the issues on investments. As added by the SEC: “However, while a
the necessary element in the signification of the term resident corporation. corporation with sixty (60%) percent Filipino and forty (40%) foreign equity
ownership is considered a Philippine national for purposes of investment, it is not
Nationality of Corporations qualified to invest in or enter into a joint venture agreement with corporations or
• The nationality of the corporation serves as a legal basis for subjecting the enterprise partnerships, the capital or ownership of which under the constitution or other
or its activities to the laws, the economic and fiscal powers, and the various social and special laws are limited to Filipino citizens only.”421
financial policies of the State to which it is supposed to belong. Thus, nationality may be o Under the War-Time Test, the nationality of a private corporation during times of
used in order to classify a corporation as “national” or “foreign” for the purpose of war in such country is determined by the character or citizenship of its controlling
applying certain protectionist, or for economic assistance, exemptions, incentives or stockholders. A corporation which was organized and created under the laws of
subsidies, or for “national treatment” under commercial or trade treaties such as the Philippines may be regarded as an enemy alien during times of war, where the
GATT, or entitle it to the diplomatic protection of the State that claims it to be its shares are controlled by foreigners whose country is at war with the Philippines.
national. For the objective of determining the nationality of the corporation, the corporate
• According to Salonga, there are two competing theories as to the nationality of a personality is ignored and the nationality of the human structure who directly
corporation or business association: Under the Orthodox Common Law Rule: (England dominates the corporation is taken into consideration.
and United States) a corporation’s nationality coincides with the place where it is Such test was first enunciated in the English case of Daimler Co. vs. Continental Tire
incorporated or with the jurisdiction that chartered it. The theory is that a and Rubber Company.422
corporation is the creation of the State of incorporation. Under the Civil Law Rule • Filipinas Compania de Seguros vs. Christern
(Continental Europe, including Spain, France, and Germany), the nationality of a
corporation or business entity coincides with the principal place of business or central 421
Ibid, at pp 46-57.
administration---the company seat, sitz sometimes called the siege social. The rationale 422
I K.B. 893: 2 A.C. 307.
is that the most pivotal decisions of the business, regarding the management and
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
55
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Facts: On October 1941, Christern, Huenefeld, and Company obtained from Filipinas state is usually allowed to transact business in other states and to sue in the courts of
Compania de Seguros a fire policy in the sum of P100, 000 covering merchandise contained the forum.”
in a building in Manila. The building and insured merchandise were burned. Christern • The legal standing of foreign corporations in the host state therefore is founded on
submitted to Filipinas its claim under the policy. Filipinas refused to pay the claim on the international law on the basis of consent, and the extent by which a hosting state can
ground that the policy in favor of Christern had ceased to be in force on the date the United enforce its laws and jurisdiction over corporations created by other states has been
States declared war on Germany. But pursuant to the order of the Director of Bureau of the subject of jurisprudential rules and municipal legislations, especially in the fields of
Financing, Philippine Executive Commission, Filipinas, in April 1943, paid Christern the sum of taxation, foreign investments, and capacity to obtain relief in local courts and
the total loss suffered. After the liberation of the Philippines, suit was instituted in 1946 to administrative bodies.424
recover from Christern the sum Filipinas had paid, the theory being that the insured • Bank of August vs. Earle425 – Chief Justice Taney reiterated that “It is very true that a
merchandise was burned after the insurance policy ceased to be effective because of the corporation can have no legal existence out of the boundaries of the sovereignty by
outbreak of war between U.S. and Germany and that payment made by Filipinas during the which it is created… It must dwell in the place of its creation and cannot migrate to
Japanese occupation was under pressure. The Court of First Instance dismissed the action another sovereignty.”
and upon appeal to the Court of Appeals, the judgment of dismissal was affirmed. • Evidently, this doctrine had to be discarded soon after it was promulgated, to cope
Held: There is no question that majority of the stockholders of the respondent corporation with the demands of an expanding capitalistic economy. As stated in the Second
were German subjects. This being so, we have to rule that said respondent became enemy Restatement:” A State has power to exercise judicial jurisdiction over a foreign
corporation upon the outbreak of the war between U.S. and Germany. The Philippine corporation which has consented to the exercise of such jurisdiction.”426
Insurance Law (Act No. 2427, as amended), in Sec. 8, provides that “anyone except a public • In the Philippines, consent is the method on acquiring jurisdiction over foreign
enemy may be insured.” corporations, as can be found in Sec. 128 of the Corporation Code:
The Control Test relies on Section 2 of Article XII of the 1987 Philippine Constitution which • Section 128. Resident agent; service of process.
provides that: o The Securities and Exchange Commission shall require as a condition precedent
• The Investment Law made clarifications regarding the Control Test. Under the to the issuance of the license to transact business in the Philippines by any foreign
Philippine Investment Incentives Act (RA 5186) and the Foreign Investment Act of 1991 corporation that such corporation file with the Securities and Exchange
(RA 7042), Philippine national means “a citizen of the Philippines or a partnership or Commission a written power of attorney designating some person who must be
association wholly owned by citizens of the Philippines, or a corporation organized a resident of the Philippines, on whom any summons and other legal processes
under the laws of the Philippines of which at least 60% of the capital stock outstanding may be served in all actions or other legal proceedings against such corporation,
and entitled to vote is owned and held by citizens of the Philippines.” RA 5186, Sec. 3, and consenting that service upon such resident agent shall be admitted and held
provides: as valid as if served upon the duly authorized officers of the foreign corporation
• The Control Test may be applicable only to corporations engaged in businesses as at its home office. Any such foreign corporation shall likewise execute and file
authorized by the foreign investment law, as amended, which specifies the percentage with the Securities and Exchange Commission an agreement or stipulation,
of ownership of Filipino nationals in corporations allowed to engage in such business. executed by the proper authorities of said corporation, in form and substance as
The control test may not be applicable to corporations authorized to engage certain follows:
business activities specified in the 1987 Constitution, as to which the grandfather rule o "The (name of foreign corporation) does hereby stipulate and agree, in
applies.423 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
Jurisdiction Over Corporations shall cease to transact business in the Philippines, or shall be without any resident
• The question of jurisdiction in personam over a domestic corporation presents no great agent in the Philippines on whom any summons or other legal processes may be
difficulties. A state which forms a corporation has jurisdiction over the corporation and served, then in any action or proceeding arising out of any business or
may grant jurisdiction upon its courts to render judgment against the corporation. The transaction which occurred in the Philippines, service of any summons or other
corporation is domiciled within the state from which it obtains its charter. The state legal process may be made upon the Securities and Exchange Commission and
which creates a corporation has power over it because of the fact that it has created it that such service shall have the same force and effect as if made upon the duly-
and that it continues to exist under the authority of the state. authorized officers of the corporation at its home office."
• It is a fundamental rule of international jurisdiction that no state can by its laws, and no
court (which is only a creature of the state) can by its judgment or decrees, directly
bind or affect property or persons beyond the limits of the state. However, under the
doctrine of comity in international laws, “A corporation created by the laws of one
424
Ibid at p. 781.
425
38 U.S. 13 Pet. 519, 588, 10 L. Ed. 274, 308 (1939).
423 426
Ibid at p. 124. Ibid at p.440.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
56
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
In cases where the foreign corporation has not been given a license to do business in the obligations to the extent necessary to control the disposition of that property. If he has no
Philippines, Sec. 12 of The Revised Rules of Court provides the following procedure to property in the State, there is nothing upon which her tribunals can adjudicate.
acquire jurisdiction: Substituted service by publication, or in any other authorized form, is sufficient to inform a
• Sec. 12. Service upon foreign private juridical entity. nonresident of the object of proceedings taken where property is once brought under the
When the defendant is a foreign private juridical entity which has transacted business in the control of the court by seizure or some equivalent act, but where the suit is brought to
Philippines, service may be made on its resident agent designated in accordance with law for determine his personal rights and obligations, that is, where it is merely in personam, such
that purpose, or, if there be no such agent, on the government official designated by law to service upon him is ineffectual for any purpose.
that effect, or on any of its officers or agents within the Philippines. Process from the tribunals of one State cannot run into another State and summon a party
• Sec. 13. Service upon public corporations. there domiciled to respond to proceedings against him, and publication of process or of
When the defendant is the Republic of the Philippines, service may be effected on the notice within the State in which the tribunal sits cannot create any greater obligation upon
Solicitor General; in case of a province, city or municipality, or like public corporations, him to appear. Process sent to him out of the State, and process published within it, are
service may be effected on its executive head, or on such other officer or officers as the law equally unavailing in proceedings to establish his personal liability.
or the court may direct. Except in cases affecting the personal status of the plaintiff, and in those wherein that mode
Consent, as a requisite for jurisdiction over foreign corporations, is founded on of service may be considered to have been assented to in advance, the substituted service of
considerations of due process and fair play. process by publication allowed by the law of Oregon and by similar laws in other States
• Pennoyer vs. Neff where actions are brought against nonresidents is effectual only where, in connection with
Facts: This action was brought by Neff against Pennoyer for the recovery of a tract of land process against the person for commencing the action, property in the State is brought
situated in Oregon. Pennoyer, in his answer, denied Neff's title and right to possession, and under the control of the court and subjected to its disposition by process adapted to that
set up a title in himself. The parties respectively claimed title as follows: Neff under a patent purpose, or where the judgment is sought as a means of reaching such property or affecting
issued to him by the United States and Pennoyer by virtue of a sale made by the sheriff of some interest therein; in other words, where the action is in the nature of a proceeding in
said county, under an execution sued out upon a judgment against Neff by the Circuit Court rem..
for said county, in an action wherein he was defendant and J. H. Mitchell was plaintiff. Neff While the courts of the United States are not foreign tribunals in their relations to the State
was then a nonresident of Oregon.In Mitchell v. Neff, jurisdiction of Neff was obtained by courts, they are tribunals of a different sovereignty, and are bound to give a judgment of a
service of summons by publication. The plaintiff objected because, said judgment is in State court only the same faith and credit to which it is entitled in the courts of another
personam, and appears to have been given without the appearance of the defendant in the State.
action or personal service of the summons upon him The term "due process of law," when applied to judicial proceedings, means a course of legal
Held: A statute of Oregon, after providing for service of summons upon parties or their proceedings according to those rules and principles which have been established by our
representatives, personally or at their residence, declares that, when service cannot be thus jurisprudence for the protection and enforcement of private rights. To give such proceedings
made, and the defendant, after due diligence, cannot be found within the State, and that fact any validity, there must be a competent tribunal to pass upon their subject matter, and if that
appears, by affidavit, to the satisfaction of the court or judge thereof, and it, in like manner, involves merely a determination of the personal liability of the defendant, he must be brought
appears that a cause of action exists against the defendant, or that he is a proper party to an within its jurisdiction by service of process within the State, or by his voluntary appearance.
action relating to real property in the State, such court or judge may grant an order that the According to Salonga, in the present time, most significantly in the United States, jurisdiction
service be made by publication of summons . . . when the defendant is not a resident of the over foreign corporations does not necessarily depend on whether it has been licensed to do
State, but has property therein, and the court has jurisdiction of the subject of the action, - business in the forum. Jurisdiction over corporations and individuals rests on the following
the order to designate a newspaper of the county where the action is commenced in which basis: reasonableness in relation to the suit and the activities or contacts with the forum.
the publication shall be made - and that proof of such publication shall be "the affidavit of the • International Shoe Co. vs. State of Washington
printer, or his foreman, or his principal clerk." that defects in the affidavit for the order can Facts: International Shoe is a Delaware Corporation headquartered in St Louis, Missouri
only be taken advantage of on appeal, or by some other direct proceeding, and cannot be that makes shoes and footwear. It has places of business in several states, but not the State of
urged to impeach the judgment collaterally, and that the provision as to proof of the Washington, where the corporation manufactures and distributes its products. The
publication is satisfied when the affidavit is made by the editor of the paper. corporation does not: (1) have a physical office, (2) contract for the sale of its products, (3)
A personal judgment is without any validity if it be rendered by a State court in an action maintain an inventory of footwear and (4) make intrastate deliveries, in the State of
upon a money demand against a nonresident of the State who was served by a publication of Washington. However, between 1937 and 1940, the appellant employed 3 salesmen who
summons, but upon whom no personal service of process within the State was made, and resided in the State of Washington. The statute requires employers located in Washington to
who did not appear; and no title to property passes by a sale under an execution issued upon fund the program by making annual contributions based on percentages of employee salaries.
such a judgment. The statute authorizes the Commissioner of the program to “issue and order and notice of
The State, having within her territory property of a nonresident, may hold and appropriate it assessment” of delinquent contributions by personal service if the employer is found in the
to satisfy the claims of her citizens against him, and her tribunals may inquire into his State or by registered mail if the employer is outside the State. The statute also gives the
employer the right to a hearing and administrative and judicial review of any order. The State
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
57
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
of Washington personally served a “notice of assessment” with one of appellant’s salesman with the regulation of corporations, partnership or associations or with those dealing
and mailed a copy of the notice to appellant’s headquarters. In response, appellant appeared with the internal affairs of such entities.427
before the office of unemployment asking that the order and assessment be set aside because • 2 theories on what law determines the personal law of a business corporation.
(1) the service on the salesman was not service on appellant, (2) appellant was not a The first theory believes that the personal law of a business corporation is the law
Washington corporation and does not do business there, (3) appellant does not have any under which it has been created or incorporated. This theory is supported in all common-
agents in Washington upon whom service may be made and (4) appellant is not an employer law countries and in legal systems influenced by Anglo-American Law.428
under the statute. The appeal tribunal denied appellant’s motion. • Philippine law follows the incorporation principle. Under Section 129 of the
Held: The Courts of the State of Washington had in personam jurisdiction over International Corporation Code:
Shoe because its business activities in that state rendered it amenable to suit in Washington. Any foreign corporation lawfully doing business in the Philippines shall be bound by all
Due process permits a state court to impose a judgment in personam on an out-of state laws, rules and regulations applicable to domestic corporations of the same class,
defendant provided that the defendant have “minimum contacts” with that state so that the except such only as provide for the creation, formation, organization or dissolution of
maintenance of the suit does not offend traditional notions of fair play and substantial justice. corporations or those which fix the relations, liabilities, responsibilities, or duties of
Minimum contacts, formerly treated as “presence,” do not require the actual physical stockholders, members, or officers of corporations to each other or to the
presence of a corporation in the state. Rather, whether a corporation is present in a corporation.
jurisdiction is measured by the nature and quality of its activities there, the relationship • The second theory on the other hand states that the personal law of a corporation is
between those activities and the legal action and whether the maintenance of the suit would the law prevailing in the State in which the business has its center of control or
offend traditional notions of fair play and substantial justice. Applying these principles to the administration. What is stated in the by-laws can only considered prima facie evidence
case, the Court found that International Shoe had continuous and systematic contacts with of the fact of central administration. When there is evidence of fraud, the by-laws will
the State of Washington through its marketing efforts and sales. Moreover, the Court found be disregarded and the place where central control actually resides will prevail.429
that serving process upon the salesman and mailing the order and notice to appellant’s
headquarters in St. Louis gave reasonable notice of the proceedings to appellant. Therefore, • M.E. Gray vs. Insular Lumber Company
it was not unreasonable, nor did it offend due process or traditional notions of fair play, to Facts: Insular Lumber Co, is a corporation organized and exiting under the laws of New
require International Shoe to litigate its claims in the State of Washington. York and licensed to engage in business in the Philippines. M.E. Gray is the owner of 57
International Shoe adheres to Pennoyer’s jurisdiction model but modifies that model to shares of capital stock of such corporation. Gray wishes to examine the books and records
incorporate corporations and the growth of interstate commerce. Corporations, being of the business of Insular Lumber but was not allowed to do so. Insular Lumber says that
fictitious entities, cannot be physically positioned like a person. Rather, corporations are under New York law, the right of stockholder to examine is limited by Sec. 77 of the Stock
present by their business activities, behavior of agents and profit-maximizing conduct in a Corporation Law, which provides that only stockholders owning 3% of the shares of a
particular jurisdiction. Consequently, a foreign corporation is subject to suit in state court if corporation may make a written request for a statement of its affairs. Gray does not own
it has minimum contacts with that state and maintenance of the suit would not offend justice 3% of the total capital stock of the corporation, nor does he represent stockholders who
nor be unreasonable. own 3% of its capital. Gray filed a complaint in the Court of First Instance in the Philippines
to allow him to inspect the books and records of business of Insular Lumber because under
Personal Law of a Corporation our Corporation Law, under which Insular lumber was registered to do business in the
• Normally, the Philippine laws applicable to a domestic corporations are also applicable Philippines, he is entitled as a stockholder, to inspect the corporate books and records of the
to any foreign corporation lawfully doing business in the Philippines save for corporation.
those which are considered internal matters and affairs of the foreign corporation. Held: The New York Statute is controlling. Under the law of New York, to examine the
What constitutes “internal matters” covers the creation, formation, organization or books and records of a corporation organized under the laws of said State are only those
dissolution of the foreign corporation and those which fix the relations, liabilities, provided in Section 77 of the Stock Corporation Law of New York.
responsibilities or duties of stockholders, members, or officers of foreign corporations
to each other or to the corporation. Because of the nature and scope of these Philippine Law on Foreign Corporations
internal matters, it has often been described as the “personal law” of the corporation. There are 5 lawful ways or modes of entry of foreign corporations in the Philippines430.
• Those that govern the relations, liabilities, responsibilities, or duties of stockholders, 1. The first mode is by establishing a branch or agency in the Philippines. Under Section 125
members, or officers of foreign corporations to each other or to the corporation refer of the Corporation Code, a foreign corporation shall have the right to transact business
to intra-corporate dispute. An Intra-corporate dispute is a controversy which: a.) arises in the Philippines after it shall have obtained a license to transact business in this country
out of intra-corporate or partnership relations between and among stockholders,
members, or associates; between any or all of them and the corporation, partnership 427
Dee v. Sec, 199 SCRA 278 [1991]
or association of which they are stockholders, members or associates, respectively; and 428
Salonga, Private International Law, p. 445
429
Ibid. p. 446
between such corporation, partnership or association and the State insofar as it 430
Salonga, Private International Law, p. 448
concerns their individual franchise or right to exist and; b.) is intrinsically connected
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
58
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
in accordance with this Code and a certificate of authority from the appropriate Originally it was believed that a corporation, being a creature of law, has no legal status
government agency. In this mode no separate corporate entity is created and the beyond the bounds of the sovereignty within which it was created. 434 Such view can no
foreign corporation actually considered as the one transacting or doing business in the longer be followed in modern conditions. Before a corporation can actually transact or do
country. business in a State, it must be first recognized by that State to exist. Recognition is the
2. The second mode is by investing in a local subsidiary here in the Philippines. Under the affirmation of the existence of a foreign business associated, created under the law of one
Foreign Investment Act of 1991, R.A. No. 7042, non-Philippine nationals may own up to State, given or extended by the authorities of other States.435
one hundred percent of domestic market enterprises unless foreign ownership therein The obviously obsolete theory is that which considers a corporation being an artificial entity
is prohibited or limited by the Constitution. In this case two corporate entities exist, created by a state, could receive recognition only in the courts of the state of its creation.436
the parent corporation and the domestic subsidiary corporation. The subsidiary This theory is called the territorial theory.
corporation is entirely governed by Philippine law. Examples of these corporations are 2 conflicting theories which are considered by countries today both recognize the existence
GM Philippines and Proctor and Gamble Philippines. of foreign corporations:
3. The third mode is by engaging in a joint venture with new or existing domestic • The first one immediately recognizes the existence of foreign corporations without
corporation. The Constitution expressly recognizes this mode of entry. Under Article further formality.
XII Section 2 of the 1987 Constitution, the State may directly undertake such activities, • The second theory restricts admission of foreign business corporations by imposing a
or it may enter into co-production, joint venture, or production-sharing agreements comprehensive examination, supervision and control of foreign enterprises. In the
with Filipino citizens, or corporations or associations at least sixty per centum of whose Philippines, this principle is recognized. However in recent years, local laws have been
capital is owned by such citizens. There is no need to obtain a license since investment made more attractive to encourage foreign investors by giving them incentives and tax
does not constitute doing business. concessions.437
4. The Fourth mode of entry is by the establishment regional or area headquarters. Under • Paul vs. Virginia – the U.S. Supreme Court decided that a state may impose any term it
Section 22 sub-section DD of the 1997 National Internal Revenue Code, a regional or may desire as a prerequisite to admission. This rule is not absolute and subject to
area headquarters shall mean a branch established in the Philippines by multinational certain exceptions, one of which is the commerce clause. This clause prohibits a state
companies and which headquarters do not earn or derive income from the Philippines from imposing conditions on corporations engaged in interstate commercial activities
and which act as supervisory, communications and coordinating center for their and provides the basis of federal power to regulate interstate commerce. Likewise,
affiliates, subsidiaries, or branches in the Asia-Pacific Region and other foreign markets. since a corporation is considered a “person” protected by the due process and equal
Since it does not earn income, it is not subject to tax under RA. 9294. protection clauses of the Federal Constitution, once it has been allowed to enter a
5. The Fifth mode of entry is by a service contract entered into by a foreign corporation state and acquire property there, it cannot be discriminated against by domestic
with a domestic corporation under specific presidential decrees or special laws on oil corporations. American case law has also advanced the principle of “unconstitutional
exploration, mining, forestry and the development of public lands, for financial, technical, conditions” which forbids a state from requiring the foreign corporation to give up its
management, or other forms of assistance.431 constitutional rights either as a prerequisite to allowing it to do business or to avoid
Once a case involving internal dispute or intra-corporate controversy in a foreign being removed from that state438.
corporation licensed to do business in the Philippines is filed in a Philippine court, the courts
may not assume jurisdiction even though the courts may have complete jurisdiction over Personality of Foreign Corporation in the Philippines
the parties, both the corporation and its officers. A court may decline to act from a lack of • A foreign corporation can transact or do business in this jurisdiction even without a
power to enforce its decrees, or because the court of other jurisdiction is better entitled to license. However, such unlicensed foreign corporation suffers a disability. The law
settle the dispute. American Courts follow the same rule. 432 The internal affairs of a denies it legal standing to sue and seek for redress but permits it to be sued or
corporation which is governed by the State of Incorporation by Philippine and American proceeded against in any judicial or administrative proceeding.439
courts govern the existence and dissolution of a corporation, title to stock, internal • The purpose of the law is to provide a basis for the court to acquire jurisdiction over
management and the right to share in a corporation, election of officers in a foreign foreign corporations transacting business in the Philippines and make it amenable to
corporation, proceedings for accounting and restoration of property. However, the US state regulation and legal process. If a foreign corporation could do business without
courts permit a foreign corporation to permit the inspection by a stockholder of such of its being amenable to process, it would possess an undue advantage over both domestic
books, papers and records as are within the state433 which is not allowed in the Philippines. corporations and individuals, since both could always be reached by process. 440
Recognition of Foreign Business Associations 434
Ruben E. Agpalo. Conflict of Laws. Private International Law. (Manila. Rex Book Store. 2004), p. 475
435
Salonga, Private International Law, p. 456
436
George Stumberg. Conflict of Laws, 3rd Edition (Brooklyn, The Foundation Press, Inc. 1951), p. 369
437
Salonga, Private International Law, 457
431 438
Salonga, Private International Law, p. 450 Coquia, Conflict of Laws, p. 476
432 439
Goodrich, Herbert F. and Scoles, Eugene F. Conflict of Laws. West Publishing Company, St. Paul, Minnesota. 1976 p. 885 Corporation Code, Sec. 133.
433 440
Goodrich, Herbert F. and Scoles, Eugene F. Conflict of Laws. West Publishing Company, St. Paul, Minnesota. 1976. p. 901 Stumberg, Conflict of Laws (1951) p. 826.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
59
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Furthermore, by getting a license, a foreign corporation gives assurance that it will • The second situation refers to the Corporation Code. Again, if a foreign corporation is
follow the decisions of the local courts, even if adverse to it.441 The Supreme Court deemed to be doing business in the Philippines, then it must obtain a license for the
also noted that: Securities and Exchange Commission (SEC) in order that it may legally transact
• The object of the statute was to subject the foreign corporation doing business in the business in the Philippines.448 Without such license, such foreign corporation may not
Philippines to the jurisdiction of its courts. The object of the statute was not to prevent sue but can be sued in Philippine courts.449
the foreign corporation from performing single acts, but to prevent it from acquiring a The circumstances that determine whether a foreign corporation is doing business in the
domicile for the purpose of business without taking the steps necessary to render it Philippines are not found in the Corporation Code. However, Republic Act 7042 or the
amenable to suit in the local courts. The implication of the law is that it was never the Foreign Investments Act of 1991 (FIA) and Executive Order 226 or the Omnibus
purpose of the Legislature to exclude a foreign corporation which happens to obtain an Investments Code of 1987 (OIC) gives a definition that may be adopted for the purposes of
isolated order for business from the Philippines, from securing redress in the Philippine the Corporation Code. Furthermore, various Supreme Court decisions also reveal the
courts, and thus, in effect, to permit persons to avoid their contracts made with such activities included in the term doing business.
foreign corporations.442 The Foreign Investments Act450 and the Omnibus Investments Code451 has enumerated the
activities that constitutes doing business in the Philippines. It is significant to note that the
Meaning of Doing Business two laws have exactly the same provisions defining doing business. According to these two
A cursory look at Section 123 of the Corporation Code reveals that the right given to a laws the phrase doing business includes:
foreign corporation is the “right to transact business in the Philippines.” The Supreme Court • soliciting orders, service contracts, opening offices, whether called "liaison" offices or
has occasion to note that “there is no exact rule or governing principle as to what branches;
constitutes "doing" or "engaging" or "transacting" business.” 443 Consequently, “each case • appointing representatives or distributors domiciled in the Philippines or who in any
must be judged in the light of its peculiar environmental circumstances.”444 calendar year stay in the country for a period or periods totalling one hundred eighty
• To add to the uncertainty, the term doing business is used in two distinct situations [180] days or more;
under Philippine jurisdiction.445 The first situation refers to Section 28 of the National • participating in the management, supervision or control of any domestic business, firm,
Internal Revenue Code which provides for the tax imposed on foreign corporation. entity or corporation in the Philippines; and
Section 28 (A) (1) provides that a resident foreign corporation is a foreign corporation • any other act or acts that imply a continuity of commercial dealings or arrangements
that is engaged in trade or business within the Philippines and is subject to an income and contemplate to that extent the performance of acts or works, or the exercise of
tax of thirty-two (32%) percent of its net or taxable income from sources within the some of the functions normally incident to, and in progressive prosecution of
Philippines.446 In contrast, a resident foreign corporation is a foreign corporation not commercial gain or of the purpose and object of the business organization.
engaged in trade or business in the Philippines and is subject to an income tax of thirty- Furthermore, both the FIA and its IRR negatively defines doing business. Section 1 (f) of the
two (32%) percent of its gross income from sources within the Philippines.447 The law IRR provides that the following acts shall NOT be considered as doing business in the
provides that a foreign corporation is taxed on income derived from sources in the Philippines:
Philippines whether it may be engaged in trade or business or not. The difference lies in • Mere investment as a shareholder by a foreign entity in domestic corporations duly
the application of deductions wherein the foreign corporation that is engaged in trade registered to do business, and/or the exercise of rights as such investor;
or business may apply personal and additional exemptions to arrive at the taxable • Having a nominee director or officer to represent its interest in such corporation;
income.

448
Corporation Code, Sec. 123.
449
Corporation Code, Sec. 133.
441 450
Eriks Pre. Ltd. Vs. Court of Appeals, 267 SCRA 567 (1997). Sec. 3 (d). The phrase "doing business" shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices
442
Marshall-Wells Co. vs. Henry W. Elser & Co., 46 Phil. 70 (1924). or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a
443
Communication Materials and Design, Inc. vs. CA, G.R. No. 102223 (1996). period or periods totalling one hundred eighty [180] days or more; participating in the management, supervision or control of any domestic
444
The Mentholatum Co., Inc. et al. vs. Mangaliman et al, G.R. No. 47701 (1941). business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or
445
Salonga, 458. The author said perceived three distinct situations in the United States. I believe that the first and third situation is the arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident
same in the Philippine scenario. to, and in progressive prosecution of commercial gain or of the purpose and object of the business organization: Provided, however, That
446
Sec 28 (A) (1) In General. - Except as otherwise provided in this Code, a corporation organized, authorized, or existing under the laws the phrase "doing business" shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations
of any foreign country, engaged in trade or business within the Philippines, shall be subject to an income tax equivalent to thirty-five percent duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its
(35%) of the taxable income derived in the preceding taxable year from all sources within the Philippines: provided, That effective January 1, interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own
1998, the rate of income tax shall be thirty-four percent (34%); effective January 1, 1999, the rate shall be thirty-three percent (33%), and name and for its own account.
451
effective January 1, 2000 and thereafter, the rate shall be thirty-two percent (32%). Art. 44 As used in this Book, the term "investment" shall mean equity participation in any enterprise formed, organized or existing
447
Sec 28 (B) (1) In General. - Except as otherwise provided in this Code, a foreign corporation not engaged in trade or business in the under the laws of the Philippines; and the phrase "doing business" shall include soliciting orders, purchases, service contracts, opening
Philippines shall pay a tax equal to thirty-five percent (35%) of the gross income received during each taxable year from all sources within offices, whether called "liaison" offices or branches; appointing representatives or distributors who are domiciled in the Philippines for a
the Philippines, such as interests, dividends, rents, royalties, salaries, premiums (except reinsurance premiums), annuities, emoluments or period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic
other fixed or determinable annual, periodic or casual gains, profits and income, and capital gains, except capital gains subject to tax under business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity of commercial dealings or
subparagraphs (C) and (d): Provided, That effective 1, 1998, the rate of income tax shall be thirty-four percent (34%); effective January 1, arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident
1999, the rate shall be thirty-three percent (33%); and, effective January 1, 2000 and thereafter, the rate shall be thirty-two percent (32%). to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
60
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• Appointing a representative or distributor domiciled in the Philippines which transacts • Eriks Pte. Ltd. vs. CA 454 – Eriks Pte. Ltd. is a foreign corporation engaged in the
business in the representative's or distributor's own name and account; manufacture and sale of elements used in pumps, valves and pipes. It sold several
• The publication of a general advertisement through any print or broadcast media; elements used in pumps, valves and pipes to Delfin Enriquez. It instituted a suit against
• Maintaining a stock of goods in the Philippines solely for the purpose of having the Enriquez for recovery of sum of money owed by the latter. The Court held that Eriks
same processed by another entity in the Philippines; Pte. Ltd. is doing business in the Philippines. Thus, we hold that the series of
• Consignment by a foreign entity of equipment with a local company to be used in the transactions in question could not have been isolated or casual transactions. What is
processing of products for export; determinative of "doing business" is not really the number or the quantity of the
• Collecting information in the Philippines; and transactions, but more importantly, the intention of an entity to continue the body of
• Performing services auxiliary to an existing isolated contract of sale which are not on a its business in the country. The number and quantity are merely evidence of such
continuing basis, such as installing in the Philippines machinery it has manufactured or intention. The phrase "isolated transaction" has a definite and fixed meaning, i.e. a
exported to the Philippines, servicing the same, training domestic workers to operate transaction or series of transactions set apart from the common business of a foreign
it, and similar incidental services. enterprise in the sense that there is no intention to engage in a progressive pursuit of
• Aside from the two laws, one must also take into account judicial interpretation of the the purpose and object of the business organization. Whether a foreign corporation is
term doing business. "doing business" does not necessarily depend upon the frequency of its transactions,
but more upon the nature and character of the transactions. The Court noted that
• Mentholatum Co. vs. Mangaliman, 452 – Mentholatum, a foreign corporation, sells its
Eriks Pte. Ltd. would have indefinitely continued its commercial transactions with
product “Mentholatum” thru its exclusive distributing agent, Philippine-American Drug
Enriquez if Enriquez had not turned out to be a bad risk.
Co. Mentholatum has not acquired a business license. It instituted a suit against
Mangaliman for infringement of trade mark and unfair competition. The Supreme Court
Allegation in a Complaint
held that Mentholatum is doing business in the Philippines thru its agent, Philippine-
American Drug Co. The Court pronounced that there is no general rule or governing • A foreign corporation, in maintaining a suit must allege in the complaint the fact that it
principle can be laid down as to what constitutes “doing” or “engaging in” “transacting” has legal personality to sue. The allegations must conform to its status in the
business. Indeed, each case must be judged in the light of its peculiar environmental Philippines. Thus, a foreign corporation doing business in the Philippines must allege
circumstances. The true test, however, seems to be whether the foreign corporation is that it is duly licensed to do business. On the other hand, a foreign corporation not
continuing the body or substance of the business or enterprise for which it was doing business in the Philippines must allege that it is suing on an isolated transaction or
organized or whether it has substantially retired from it and turned it over to another. to protect its trademark or trade name.455 A foreign corporation’s capacity to maintain
The Court then defined continuing the substance of the business. It implies a continuity a suit must therefore be established by appropriate allegations in the complaint.
of commercial dealings and arrangements, and contemplates, to that extent, the
performance of acts or works or the exercise of some of the functions normally Disabilities Attendant to an Unlicensed Foreign Corporation
incident to, and in progressive prosecution of, the purpose and object of its Sec. 133 of the Corporation Code provides:
organization. • Doing business without a license. - No foreign corporation transacting business in the
• Columbia Pictures, Inc. vs. Court of Appeal453– In said case, Columbia Pictures, a foreign Philippines without a license, or its successors or assigns, shall be permitted to maintain
corporation, is a copyright owner of films and videos. It petitioned for against Sunshine or intervene in any action, suit or proceeding in any court or administrative agency of
Home Video, Inc. for violation of Presidential Decree 49 or the “Decree on the the Philippines; but such corporation may be sued or proceeded against before
Protection of Intellectual Property." The Supreme Court held that Columbia Pictures is Philippine courts or administrative tribunals on any valid cause of action recognized
not doing business in the Philippines. The Court stated that a foreign corporation is under Philippine laws.
"doing," "transacting," "engaging in," or "carrying on" business in the State when, and • The Corporation Code specifically denies to a foreign corporation doing business in
ordinarily only when, it has entered the State by its agents and is there engaged in the Philippines without a license the right to recourse to local remedies. The denial of
carrying on and transacting through them some substantial part of its ordinary or such right is comprehensive in two ways. First, the refection pertains not only to the
customary business, usually continuous in the sense that it may be distinguished from foreign corporation but also to its successors, assigns, or agents. Second, the denial
merely casual, sporadic, or occasional transactions and isolated acts. Mere ownership concerns not only actions or suits in judicial courts but also in administrative tribunals.
of copyright or exclusive distribution rights in the Philippines is not doing business. The • The purpose of securing a license is to allow the local authorities to exercise
Court further stated that exercising one's legal and property rights and taking steps for jurisdiction over the foreign corporation. This is to enable the local authorities to
the vigilant protection of said rights is not tantamount to doing business. regulate the activities of such foreign corporations. The Supreme Court has said that a
foreign corporation must submit to the jurisdiction of the local authorities for it to

452 454
G.R. No. 47701 (1941). G.R. No. 118843 (1997).
453 455
G.R. No. 110318 (1996). Ruben E. Agpalo. Conflict of Laws. Private International Law. (Manila. Rex Book Store. 2004), p. 483.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
61
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
solicit the latter’s assistance later. A foreign corporation must be prepared to respect business within the state to submit itself to the jurisdiction of the courts of this state.
and be bound by local laws.456 The statute was not intended to exclude foreign corporations from the state. It does
On the other hand, a foreign corporation may be sued or proceeded against before not, in terms, render invalid contracts made in this state by non-complying
Philippine courts or administrative tribunals. The Supreme Court has held that a foreign corporations. The better reason, the wiser and fairer policy, and the greater weight lie
corporation doing business in the country should and will be amenable to process and with those decisions which hold that where, as here, there is a prohibition with a
jurisdiction of local courts whether it has or does not have a license. 457 The Court penalty, with no express or implied declarations respecting the validity of enforceability
emphatically reiterated the doctrine in the case of Marubeni Nederland B.V. vs. Tensuan.458 In of contracts made by qualified foreign corporations, the contracts . . . are enforceable .
the said case, the Court said that “a foreign corporation doing business in the Philippines . . upon compliance with the law.
with or without license is subject to process and jurisdiction of the local courts. If such It is, therefore, not necessary to declare the contract null and void even as against the erring
corporation is properly licensed, well and good. But it shall not be allowed, under any foreign corporation. The penal sanction for the violation and the denial of access to our
circumstances, to invoke its lack of license to impugn the jurisdiction of our courts.” courts and administrative bodies are sufficient from the viewpoint of legislative policy.
1. One view is that a transaction or contract entered into by a foreign corporation doing
business without a license is void. The theory is the foreign corporation has no rights on Subsequent Acquisition of License
its own. The foreign corporation only has rights that are given to it by law. The law • The Home Insurance Co. vs. Hon. Melencio Herrera et al. 464 – Eastern Shipping Lines
requires a condition precedent before the foreign corporation may transact business. transported coils of ‘Black Hot Rolled Copper Wire Rods’ to Manila. The shipment was
The faithful observance of the condition is mandatory therefore contracts or insured by Home Insurance, a foreign insurance company. The consignee received
transactions entered into without compliance are necessarily void.459 some of the cargo in bad order. Home Insurance paid the consignee under the
Under this view, Salonga460 notes that the United States have two different ways in looking at insurance policy, by virtue of which plaintiff became subrogated to the rights and
the situation. One, “the corporation is deprived not only of the right to be a party in the actions of the consignee. Home Insurance thereafter made demands to CARRIER and
courts of the Sate in question but of its rights under the contract.” The other is that “the subsequently brought a suit against the latter. CARRIER argued that Home Insurance
contract is considered void ab initio and no action is granted to either party in any court.” has no capacity to sue since when the insurance contracts were executed, Home
2. The other view is that the transaction or contract entered into by a foreign corporation Insurance has not yet secured a license. The Court held in favor of Home Insurance. It
is valid notwithstanding its lack of license. This view recognizes the power of the made a finding that when Home Insurance filed its complaint, it had already secured the
corporation to contract anywhere. The penalty provided for non-compliance is necessary license to conduct its insurance business in the Philippines. It could already
exclusive. The penalty is its inability to sue but being susceptible to suit. Since this is the file suits.
only consequence granted by the statue then no other disability should be attached to
the foreign corporation.461 Exceptions
Under this opposing view, Salonga462 has again noted of two different ways that the United It is not the absence of the prescribed license but "doing business" in the Philippines without
States considered the situation. “Non-compliance with requirements does not in any way such license which bars the foreign corporation from access to our courts. In other words,
prejudice the rights and duties arising from a contract concluded in the in the State whose although a foreign corporation is without license to transact business in the Philippines, it
permission was not obtained.” The alternative perspective states that “the contract may be does not follow that it has no capacity to bring an action. Such license is not necessary if it is
considered valid, but the foreign corporation is disqualified from suing on the contracts in the not engaged in business in the Philippines.465
courts of the State whose permission was not obtained.” An isolated act of business is not doing business within the purview of the law. It is
• The Home Insurance Co. vs. Hon. Melencio Herrera et al 463 – The very fact that the considered to be unreasonable and incongruous to require a foreign corporation to acquire a
prohibition against maintaining an action in the courts of the state was inserted in the license as a prerequisite of doing a single act of business or executing a single contract.466
statute ought to be conclusive proof that the legislature did not intend or understand • General Corp. of the Phil. vs. Union Insurance467 – Union Insurance is a foreign insurance
that contracts made without compliance with the law were void. The statute does not corporation, without a license, acting as settling agent of and settling insurance claims
fix any time within which foreign corporations shall comply with the Act. If such against the Fireman’s Fund, also a foreign corporation without a license. General Corp.
contracts were void, no suits could be prosecuted on them in any court. . . . The and Mayon Investment sued both Union Insurance and Fireman’s Fund for payment of
primary purpose of our statute is to compel a foreign corporation desiring to do insurance claims. Firemen’s Fund argued that Union Insurance has no authority to
receive summons in behalf of the former. The Supreme Court held that summons was
properly served. The Court noted that the Rules of Court did not qualify the term
456
Granger Associates vs. Microwave Systems, Inc., G.R. No. 79986 (1990).
457
Gen. Corp. of the Philippines vs. Union Ins., G.R. No. L-2684 (1950).
doing business. Thus, whether the act of doing business was done legally or not is
458
G.R. No. 61950 (1990).
459
Rumpert, p. 855-856.
460 464
p. 467. G.R. No. L-34382 (1983).
461 465
Rumpert, p. 855. La Chemise Lacoste. S.A. vs. Fernandez, etc., et al., G.R. Nos. 63795-97 (1984).
462 466
p. 467. Rumpert, p. 830.
463 467
G.R. No. L-34382 (1983) citing Peter & Burghard Stone Co. v. Carper, 172 N.E. 319 (1930). G.R. No. L-2684 (1950).

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
62
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
immaterial. The Court further said that Firemen’s Fund is doing business in the corporation applying for a corporate name that is the same of as that of a foreign
Philippines. The Court found that issuance of twelve marine insurance policies covering corporation is not barred by law nor by public policy to assume such name. However,
different goods is doing business. It cannot be said that these are casual or isolated a foreign corporation that has a distinctive name that has so far become its trademark
business transaction. or trade name that it is entitled to protection by local courts.471
It is a rule generally accepted that one single or isolated business transaction does not • La Chemise Lacoste S.A., vs. Hon. Fernandez et al.472 – Lacoste is a foreign corporation
constitute "doing business" within the meaning of the law, and that transactions which not doing business in the Philippines, and is the owner of trademarks LACOSTE,
are occasional, incidental and casual, not of a character to indicate a purpose to engage CHEMISE LACOSTE, and CROCODILE DEVICE. Hemandas is the registered owner of
in business do not constitute the doing or engaging in business contemplated by law. In the aforementioned trademarks in the Philippine Patent Office. Lacoste filed a letter-
order that a foreign corporation may be regarded as doing business within a State, complaint against Hemandas for unfair competition. Hemandas argued that Lacoste has
there must be continuity of conduct and intention to establish a continuous business, no capacity to sue in the Philippines.
such as the appointment of a local agent, and not one of a temporary character. The The Supreme Court ruled in favor of Lacoste. The Court held that Lacoste is not doing
Court found that the evidence conclusively proves continuity of business. business in the Philippines and thus is not required to get a license to successfully sue.
It must however be borne in mind that not all instances where there is only one In addition, the Court also held that even if Lacoste is doing business in the Philippines,
contract or transaction is a case of an isolated transaction. The intent of the foreign it may still maintain the action. A foreign corporation may maintain a suit to restrain
corporation must be determined. A foreign corporation intending to do business in the local residents from organizing a corporation having the same name as the foreign
Philippines and entering into its initial transaction shall be deemed to be doing business corporation if the residents have personal knowledge of the existence of the foreign
even though it is just one activity.468 corporation and the primary purpose of the proposed domestic corporation is to trade
• Far East International Corporation v. Nankai Kogyo Co. Ltd., et al.469 – Nankai is a foreign in the same goods as that of the foreign corporation. A foreign corporation’s use of its
corporation without a license to do business in the Philippines. It entered into a corporate and trade name is a property right which it may assert anywhere.
contract with Far East wherein the latter is to ship to the former five thousand (5,000)
metric tons of steel scrap. Far East was able to make partial delivery only. When Far Estoppel
East requested for the bill of lading, Nankai refused. Far East then filed a complaint • Another exception is estoppel on the part of the local firm or entity which entered
against Nankai. Nankai sought to dismiss the complaint on the ground of lack of into the transaction with a foreign corporation. The local resident knowing the absence
jurisdiction over the person of the defendant. It posited the view that it is not doing of a license of its counterpart and receiving the benefits of the contract, it is now
business and that the buying of scrap was its only transaction in the Philippines, thus it estopped from raising lack of capacity of the foreign corporation. The reasoning being
is not amenable to summons. that the local resident is taking advantage of the foreign corporation by raising its non-
The Supreme Court ruled in favor of Far East. The pronounced that the rule stating compliance and at the same time receiving the benefits.473
that doing of a single act does not constitute doing business must be qualified. A single • Subic Bay Metropolitan Authority v. Universal International Group of Taiwan 474 – UIG is a
act may bring the corporation within the purview of the statute where it is, an act of foreign corporation without a license to do business in the Philippines. UIG leased from
the ordinary business of the corporation. In such a case, the single act or transaction is SBMA the Binictican Golf Course to be transformed into a world class 18-hole golf
not merely incidental or casual, but is of such character as distinctly to indicate a course. UIG sued SBMA for pre-termination of the contract due to default of UIG.
purpose on the part of the foreign corporation to do other business in the state, and SBMA attacked the capacity of UIG to sue.
to make the state a basis of operations for the conduct of a part of the corporation's • The Supreme Court ruled in favor of UIG. It stressed that the licensing requirement
ordinary business. The Court found that Nankai is doing business in the Philippines was never intended to favor domestic corporations who enter into solitary
because of its desire to continue engaging in business in the country, making the transactions with unwary foreign firms and then repudiate their obligations simply
Philippines its base. because the latter are not licensed to do business in this country. It noted that the
scheme is a common ploy of defaulting local companies which are sued by unlicensed
Action to Protect Trademark, Trade Name, Goodwill, Patent or for Unfair foreign companies not engaged in business in the Philippines to invoke lack of capacity
Competition to sue. The Court then concluded that SBMA effectively recognized the personality and
• A foreign corporation ordinarily may not successfully protect its corporate name in capacity to institute suit of UIG.
another jurisdiction. The view is that a foreign corporation does not come to the local • Agpalo rejects estoppel as an exception to the requirement of getting a license. Agpalo
jurisdiction as a matter of right, but only by comity, and cannot be permitted to come argues that estoppel may not invalidate that which is against the law. He further argues
for the purpose of asserting rights in contravention of law or public policy.470 The local that estoppel is grounded on equity. A foreign corporation cannot be in good faith

471
Ibid., p. 802-803.
468 472
Rumpert., p. 831. G.R. No. L-63796-97, (1984)
469 473
G.R. No. L-13525, (1962). Salonga citing Communication Materials and Design, Inc. v. CA, 260 SCRA 673 (1996), p. 464.
470 474
Rumpert, p. 803. G.R. No. 131680, (2000).

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
63
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
when it has not complied with a positive requirement of the law. Thus, allowing the the capacity to purchase and hold real estate and personal property for its church. This
foreign corporation to sue, even without a license, would be a rewarding such capacity exists even if the chief archbishop, bishop, priest, minister, or other presiding
corporation for breach of law. Agpalo opines that the better solution would be to elder who is the corporation sole is in fact a foreign citizen and personally cannot own
require the foreign corporation to acquire the license and pay the fines and penalties and hold real property.
that is imposed.475 • Roman Catholic Apostolic Administrator of Davao v. Land Registration Commissioner483 – In
the case the corporation sole is the Roman Catholic Administrator of Davao who is a
Partnership Canadian citizen. The Supreme Court allowed the registration of the donated parcel of
• Partnership is a business association wherein two or more persons bind themselves to land. The Court held that a corporation sole is a special form of corporation usually
contribute to contribute money, property, or industry to a common fund, with the associated with the clergy.
intention of dividing the profits among themselves.476 This association has a personality Conceived and introduced into the common law by sheer necessity, this legal creation
distinct and separate from its members.477 Thus, the common fund that is contributed was designed to facilitate the exercise of the functions of ownership carried on by the
is owned by the partnership itself and not by the partners. However, one must also clerics for and on behalf of the church which was regarded as the property owner. The
note that each partner is generally the agent of each other and the partnership.478 Thus bishops or archbishops, as the case may be, as corporation's sole are merely
the act of the partner may be considered as the act of the partnership itself. administrators of the church properties that come to their possession, and which they
• Salonga opines that a partnership created under local jurisdiction is also considered a hold in trust for the church. Since the real owners of the property are the lay Filipino
partnership in other jurisdictions. There is a difference however, in the applicable people, the citizenship of the administrator or bishop is of no concern.
personal law that the partnership has. In Civil law countries, the personal law of the
partnership is determined by its central office. On the other hand, in the United States, Multinational Corporations
a common law jurisdiction, the personal law of the partnership is with the place of • A multinational corporation is a single enterprise composed of several corporations,
creation of such partnership.479 each with a separate entity and different nationalities.
• The personal law applicable would determine the rights and duties of the partners in • According to Coquia, the problem lies in the ability or disability of a host country to
relation to themselves, the partnership, and to third parties. A limited partner’s liability affect or hold liable parent corporation or the entire multinational corporation and not
cannot be enlarged in another jurisdiction merely because such jurisdiction allows it. merely the subsidiary or branch within its jurisdiction. He opined that local courts may
The local jurisdiction respects the foreign partnerships laws with respect to its exercise jurisdiction over the parent corporation if the parent has such control and
liabilities.480 domination over its subsidiary that would indicate that the subsidiary has no separate
corporate existence. This relationship between the parent and the subsidiary would
Religious Societies and Corporation Sole then be more like an agency relationship that would enable local courts to go after the
• Religious societies are religious corporations that are governed by Chapter II of the parent/principal. This can also used in the converse situation, jurisdiction over the
Corporation Code. parent corporation may give rise to an exercise of jurisdiction over the subsidiary if the
• Register of Deeds of Rizal v. Ung Siu Si Temple481 – Ung Siu Si is a religious organization separate corporate existence has not been adequately maintained.484
whose deaconess, founder, trustees and administrator are all Chinese citizens. Ung Siu
Si seeks to register to its name, a parcel of land donated to it. The Supreme Court held
that since the religious society is admittedly composed of Chinese nationals, it may not
acquire land because of the Constitutional inhibition. The Court further said that to
permit religious associations controlled by non-Filipinos to acquire agricultural lands
would be to drive the opening wedge to revive alien religious land holdings in this
country.
• On the other hand, a corporation sole is an incorporated office composed of only one
person.482 Section 113 of the Corporation Code explicitly gives the corporation sole

475
p. 465-466.
476
Art. 1737, Republic Act 386 or The Civil Code of the Philippines (hereinafter Civil Code).
477
Art. 1768, id.
478
Art. 1818, id.
479
Salonga, p. 470.
480
Ibid., pp. 470-471.
481
G.R. No. L-6776. (1955).
482 483
Jorge Coquia and Elizabeth Aguiling-Pangalangan. Conflicts of Laws. Casses, Materials & Comments. (Quezon City, Phoenix Press. 2000), G.R. No. L-8451. (1957).
484
p. 522. (hereinafter Coquia) Coquia, pp. 524-525.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
64
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
TORTS AND CRIMES In fact it can lead to incongruous judgments, to wit:
C/O: JOSEPH DORIA, GB BARROA, AND MERLIN ANG a) The place where the injury was sustained may be entirely fortuitous, say an airplane
(Salonga, CHAPTER XIX, 1995) accident.
b) Where the conduct of the actor is required or permitted by the law of the state of
CONCEPT OF TORT execution, it would be unfair to subject him to liability under the law of the State of the
What are Torts? alleged injury.
•The concept of torts, however, is quite different in each country
•In Anglo-American Common Law, the concept of tort covers: Conversely, where the act is actionable by the law of the State of injury, the latter may have
a) intentional and negligent injury no interest in shielding the actor from liability, whereas the place of execution may
b) strict liability, which serves to distribute losses due to such fault or negligence. have a more significant relationship to the parties and to the occurrence.

Requisites of Tort Liability: Rabel’s Theory


1. Existence of a legal duty •The locus delicti is the place which has the most substantial or essential connection with the act.
2. Breach of Duty Criticism.
3. Damage as a proximate result Whether or not a particular contact with a State is significant for conflicts purposes cannot
4. Occurrence of an Actionable Wrong be known until one first knows exactly what domestic tort rules are in conflict and what
policies underlying those are in issue.
Historical Development
a) Obligation Theory Modern Theories in Tort Liability
–Though the act complained of was subject to no law having force in the forum, it gives rise 1. Doctrine of Elective Concurrence
to an obligation which follows a person and may be enforced anywhere the person may be In this theory, it is held that both the state where the actor engaged in his conduct and the
found place of injury has jurisdiction over the case as it can be said that the said tort was
b) English Rule committed in both places.
–In order to found a suit in the forum for a wrong committed abroad, the said wrong must 2. State of the Most Significant Relationship
be of such character that it would be punishable in the forum and the said act is not To apply this rule, the state with the most significant relationship to the case at hand must be
justifiable under the law of the place where the act was done. determined.
Confronted with a Torts case with a “foreign element”, what can the forum do?
1.Dismiss the case on the basis of “forum non conveniens” Factors to be considered
2.Admit jurisdiction and apply lex fori a) the place where the injury occurred
3.Admit jurisdiction and apply foreign law b) the place where the conduct causing the injury occurred
c) the domicile, residence, nationality, place of incorporation and place of business of the
LEX LOCI DELICTI COMMISSII parties, and
Law of the place where the wrong was committed d) the place where the relationship, or any, between the parties centered.
Civil Law 3. State-Interest Analysis
•The locus delicti is where the wrongful act began or occurred. This is because rules on tort All relevant and governmental concerns of a state in an issue, not only as a sovereign in a set
are intended to regulate human conduct; hence, a person who willfully or negligently acts of facts or an entity but as a repository of justice, must be considered by a court of law in
contrary to social norms must be held liable for any injury caused determining which law to apply .
Criticism:
Unfairness may eventually occur in its application as a defendant’s acts may cause injury Carver’s Principle of Preference
outside the place of execution. Such act may not even be considered punishable in such • More of a guideline to be followed by states in applying rules on tort acts. Such
jurisdiction. principles must guide contending states in determining which or what law to apply in
particular cases.
Common Law • Apply only when there is no statutory rule applicable
•The locus delicti is where the tortious act first became effective. This is due to the fact that
until there is produced some effect, some result, no injury or wrong has really been st
1 Guideline
committed, despite the disregard of human norms. The law on torts seeks to give protection Where the liability of the State of injury set a higher standard of conduct or of financial
and redress; without injury, there is no necessity for judicial relief and intervention. protection against injury than do the laws of the State where the person causing the injury
Criticism
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
65
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
has acted or has his home, the laws of the State of injury should determine the standard and • Residency
the protection applicable to the case • Place of Business
• Place of injury or instigation of the tortuous action
nd Citizenship
2 Guideline •
Where the liability laws of the state in which the defendant acted and caused the injury set a • Place where a relationship is centered
lower standard of conduct or of financial protection than do the laws of the home State of
the person suffering the injury, the laws of the State of conduct and injury should determine INTEREST OF THE STATE WHERE THE INJURY TAKES PLACE
the standard of conduct or protection applicable to the case Compensation will prevent the victim from becoming a public burden or charge of the State

rd INTEREST OF THE STATE WHERE THE TORTUOUS ACT WAS INITIATED


3 Guideline
Interest in regulating the conduct of persons found in its territory.
Where the State in which a defendant has acted has established special controls, including the
Persons within a State have the right to shape their conduct in accordance to its law.
sanction of civil liability, over conduct of the kind in which the defendant was engaged when
he caused a foreseeable injury to the plaintiff in another state, the plaintiff, though having no
THE PLACE WHERE tortuous ACT IS CARRIED OUT MAY BE GIVEN DECISIVE WEIGHT
relationship to the defendant, should be accorded the benefit of the special standard of
When the injury occurs in two (2) or more different States
conduct and of financial protection in the State of the defendant’s conduct, eventhough the
When the place of injury is not easily ascertainable or is fortuitous and bears little relation to
State of injury had imposed no such controls or sanction
the occurrence and the parties
th
4 Guideline NOT A HARD AND FAST RULE
Where the law of the State in which a relationship has its seat has imposed a standard of Example: Libel
conduct or of financial protection on one party to that relationship for the benefit of the Plaintiff: A (Filipino national)
other party which is higher than the like standard imposed by the State of injury, the law of Defendant: B (Magazine printed in HK enjoying worldwide circulation)
the former State should determine the standard of conduct or financial protection applicable Forum should be the Philippines since it is there that A stands to suffer the greatest injury
to the case for the benefit of the party protected by the State’s law. since it is there that people are familiar with his reputation (assuming B does business in the
Philippines).
PHILIPPINE CONFLICT RULES ON TORTS
LEX LOCI DELICTI RULE
FORUM INTEREST • The law of the place where the action causing injury, wrong or death took place should
Method in which the primary consideration in determining what law should apply is the govern
interest of the forum. • Most authorities consider this as the traditional rule on the determination of the
applicable law involving tort or damages in the Philippines
DOES THE PHILIPPINES HAVE AN INTEREST IN THE CASE OTHER THAN AS A
FORUM? 2 REASONS FOR THE RULE
If NO, then the law of the other state should govern. 1. First, the state where social disturbance occurred has the primary duty to redress the
If YES, the next question that needs to be answered is: wrong, and to determine the effects of injury
2. Second, the law of the state must be presumed to have been foremost in the mid of the
IS THERE A CONFLICT BETWEEN THE PHILIPPINE LAW AND THE LAW OF THE parties concerned, thus they acted with knowledge of the resultant consequences under
OTHER STATE? the said law
If NO, then apply Philippine law.
If YES, then there is a need to bear in mind two (2) considerations in determining which law DIFFERENT DEFINITIONS OF LEX LOCI DELICTI
should govern. Civil law countries: the place where the act began
Common law countries: the place where the act first became effective.
FIRST ASCERTAIN AND WEIGH THE PURPOSE OF THE TORT LAW OF THE
PHILIPPINES 3 THEORIES ON WHERE THE LOCUS IS
SECOND, EXAMINE AND WEIGH THE INTEREST OF THE OTHER STATE • Civil Theory: where the action began
• Rules on tort are intended to regulate human conduct, hence a person who acts
HOW DO YOU DETERMINE THE INTEREST OF THE OTHER STATE? contrary to social norms must be held liable
• Domicile • Common Law Theory: where the tortuous act first became effective.
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
66
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• Until the action has caused some effect, no injury has really been committed. Article 1766 of the New Civil Code states that “in all matters not regulated by this Code, the
• Dr. Rabel’s Theory: where the most substantial connection to the act is present. rights and obligations of common carriers shall be governed by the Code of Commerce and
• Libel cases by means of a foreign publication enjoying circulation elsewhere and causing by special laws”
injury in another State.
REGISTRY OF VESSEL
STATE OF THE MOST SIGNIFICANT CONTRACTS RULE Also known as the Law of the Flag
• The rule arose because of the opinion of some that the rule on lex loci delicti has The rule states that when a vessel of foreign registry or ownership is enters Philippine ports,
become inadequate to meet the modern complexities of life today such a vessel is beyond our jurisdiction
• Applies where the tortuous acts occurred in two (2) or more states and ripens into a However, a vessel of foreign registry or ownership shall be subject to Philippine jurisdiction
cause of action in another State. on matters which involve the peace and tranquility of the party.
• Also applies when the attendant facts occurred in two or more States, not one of The Law of the Flag generally supercedes the lex loci delicti test for tort jurisdiction.
which constitutes an actionable wrong by itself The law of the flag, however, will not be applied where considerations against its application
outweigh those in its favor
• Also known as:
Example: where the wrongful act or omission caused injury to the country’s citizen or where
• State of the Most Significant Relationship Rule
the local law is designed to protect seamen in Philippine ports
• Center of Gravity Rule
• Grouping of Contracts Rule FILIPINO OVERSEAS EMPLOYMENT
• The traditional rule is that the law of the country where the physical injury or death of
THE FOLLOWING CONTRACTS ARE TO BE CONSIDERED AND EVALUATED a person occurs governs the liability of the person responsible thereof
ACCORDING TO THEIR RELATIVE IMPORTANCE WITH RESPECT TO THE
• The Kilberg doctrine states that the forum is not bound by the law of the place of
PARTICULAR FACTS IN ISSUE:
death as to the limitation on damages for wrongful deaths because such rule is
• Place where the injury occurred procedural and hence the law of the forum should govern on the issues involved
• Place where the act causing the injury occurred • In cases where the law of the flag applies, the law of the country where the vessel is
• The domicile, place of incorporation and place of business of the parties registered governs the terms and conditions of employment of its crew.
• Place where the relationship of the parties is centered • The limitation of these rules on conflicts of law is that it does not apply in cases where
there is a contrary rule in the forum where the case is filed.
STATE OF THE MOST SIGNIFICANT CONTRACT RULE (continued) • Therefore, foreign employers are bound by the law creating the Philippine Overseas
An action may be maintained wherever the wrongdoer can be found provided that: Employment Administration and such other laws specifying the amount of
The law of the nationality of the wrongdoer and the law of the forum (Philippines) make the compensation and benefits during the term of the contract.
wrongful act actionable
The two countries have similar statutes on the matter ENFORCEMENT OF FOREIGN JUDGMENT
• Foreign torts may be properly be the subject of suits provided certain conditions are
AGREEMENT OF THE PARTIES
met, aside from the requisite that courts must have jurisdiction over the case
Parties to an agreement may stipulate as to the law which will govern in case of dispute
• The general rule for an action for a foreign tort, may be brought in any place where the
arising therefrom and such stipulation shall be respected except in so far as prohibitive law
defendant may be served with process or is subject to suit
or public policy prohibits its application
CONDITIONS FOR ENFORCEMENT OF FOREIGN TORT
CARRIAGE OF GOODS BY SEA ACT
C.O.G.S.A. is a suppletory law applicable in cases involving the carriage of goods to the • Foreign tort must not be penal in character
Philippine ports in foreign trade. • Enforcement of the tortuous liability should not go against the public policy
The rights and obligations of common carriers in all contracts of carriage of goods by sea to • Judicial machinery must be adequate for such enforcement
Philippine ports from foreign ports shall be governed by the Civil Code, in default of such
provisions, by that of the Code of Commerce and other special laws, and in the absence of PARTICULAR TORT PROBLEMS
both, by the C.O.G.S.A.
Article 1753 of the New Civil Code states that “the law of the country to which the goods 1. Tort Liability arising from acts of Torture
are to be transported shall govern the liability of the common carrier for their loss, Conflicts of law issue: Whether foreign courts have jurisdiction to entertain tort suits for
destruction or deterioration” acts of torture committed against political detainees or prisoners in their home countries, in
violation of international and municipal law.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
67
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Proposed choice of law: Official acts of torture may be prosecuted in foreign countries, Proposed choice of law: The majority of the States adopted the “Single Publication Rule”
i.e. in U.S. Courts in view of the Alien Torts Acts. whereby plaintiff may only bring one suit for the particular publication. But what law should
apply? Recent decisions opt for the law more favorable to the plaintiff which is usually the law
2. Injury to Intangible Values of his domicile, following the “Most Significant Relationship” Principle. For natural persons,
this place “will usually be the place where the person was domiciled at the time,” while for
2.1. Fraud or Misrepresentation Corporation it “will be the principal place of business at the time.” (Eliah v. Ucaton Corp.,
Conflicts of law issue:When the defendant’s fraud or misrepresentation and the 433 F.Supp.309 W.D.N.Y. 1977)
defendant’s reliance occur in the same state, no problem arises, but if they do not, what will
be the choice of law principle that will govern? 3. Products Liability
Proposed choice of law: In cases of fraud or misrepresentation, the principal concern is the Conflicts of law issue: Products liability suits are a hybrid of tort and contract claims,
protection of the plaintiff and this will therefore normally lead to the place where he acted in usually involving claims of negligence and strict liability or breach of warranty. Mass torts,
reliance. The “Most Significant Relationship” principle applies in this case. which may or may not include product liability, involve injury to many victims as a result of a
single act (explosion) or of continuous acts (toxic or polluting emissions). To which law shall
Factors relevant in determining the place of the “most significant relationship” are the the defendant be subjected to? The courts have struggled to apply choice-of-law rules in such
following: a way that the plaintiff is favorably compensated for the injury and yet the defendant is not
a) The place where the plaintiff relied; unfairly surprised by the law governing his liability. What now is the generally accepted
b) Where he received the representations; choice-of-law rule?
c) Where the defendant made the representation; Proposed choice of law: The Second Restatement applies its “Most-significant
d) Domicile, residence, nationality, and the place of business of the parties; Relationship” test to products liability, which allows the court to take account of the “legal,
e) Where the tangible involved in the transaction was situated; and social, and economic consequences of the total contract-tort situation.” This considerations
f) Where the plaintiff was to render performance under the contract that he was induced to will often place primary emphasis on the interests of the injured plaintiff and give rise to the
conclude. suggestion that “the law most favorable to the plaintiff ought to be applied…”
2.2 Unfair Competition • The Hague Convention on the law applicable to Products Liability takes a similar
Conflicts of law issue: Torts in unfair competition presents Conflicts of Laws issue when approach. Article 4 of the Convention provides that the applicable law shall be the
the defendant (one exercising unfair competition) acts in one state and the plaintiff’s business internal law of the State of the place of the injury, if that State is also:
(one who suffers injury as a result of the unfair competition) is injured or the public, in a) the place of the habitual residence of the person directly suffering damage
general, is deceived in another. b) the principal place of business of the person claimed to be liable
Proposed Choice of Law: There are essentially three interests or policies to be c) the place where the product was acquired by the person directly suffering damage.
considered—regulation of conduct, protection of the injured party’s business, and protection Article 5 of the Convention goes on to provide that the applicable law shall be the law of the
of the public. Under the Second Restatement the most significant factor is not the place of State of the habitual residence of the injured person, if the State is also the principal place of
the injury, but the place of the defendant’s conduct. (criticized) business or the place where the product is acquired. In essence therefore, the plaintiff has
•The better approach is to protect the plaintiff in his market and with respect to his the option to choose between the law of his habitual residence or the law of the principal
customers or other competitors. (European choice of law test) place of business of the defendant in case the 2 coincide.
2.3 Alienation of Affections
Conflicts of law issue: Alienation of affection is defined as: “a tort based upon willful and 4. Statutory Liability
malicious interference with marriage relation by third party, without justification or excuse.” Conflicts of law issue: Choice-of-law problems also exist when statutes provide for no-fault
(Black’s Law Dictionary, Page 66, 5th Ed.) In case the defendant is domiciled in a different liability. Choice-of-law problems may arise in a variety of situations: when tort-state parties
State, whose law shall govern? are injured in a no-fault state and a no-fault liability is imposed on the tort-state driver, when
Proposed choice of law: The rule focuses on the place of the defendant’s conduct. The the reverse is the case, when the cars each occupied by the parties from both types of States
reason for preferring the defendant’s place of conduct rather than the that of the spouses’ collide, or when different no-fault statutes are in issue.
domicile, if different, is said to be that the primary policy for affording these causes of action Proposed choice-of-law:
is deterrence and punishment rather than payment of compensation. There are 2 basic no-fault statutes:
2.4. Defamation and Invasion of Privacy 1.Territorial Legislation: provides benefits for every person injured in the state regardless of
Conflicts of law issue: If the publication of the libel or slander or the invasion of privacy the domicile.
occurs in a single state, the distinction is usually unnecessary: conduct and injury coincide. It Criticism: What if the non-resident driver comes from a tort state? Tort driver may incur
does become important in cases of multi-state publication. An initial question is whether the liability beyond his expectation that may lead to his economic ruin.
plaintiff has a single or multiple causes of action. To resolve criticism: Threshold Test

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
68
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
2. Domiciliary Legislation: Awards no-fault benefits on the basis of the victim’s in-state thing is to be treated as a movable or an immovable for most purposes depends upon
residence. the law of the state in which the thing is located.485
Criticism: leads to confusing results. • Transactions involving transfers inter vivos of an interest in land generally follow the
traditional rule, which continues to receive general recognition. In practice, the validity
Torts and Crimes Distinguished and effect of a conveyance of an interest in land and the nature of the interest, which is
Torts Crimes

Wrong committed against a private Wrong committed against the State


person
A tort action is a civil proceeding commenced and It is the state, as the representative of the public,
maintained by the injured person against the wrong that brings a criminal action against the offender, for
doer for the purpose of obtaining compensation for the purpose of protecting and vindicating the
the damage suffered. interests of the public as a whole.

Generally, the law of torts does not depend upon Criminal Liability is essentially based on intention—
intention. there can be no criminal without criminal intent.

Principles of Criminal Liability transferred, are determined by the law, which would be applied by the courts of the
situs, and those courts would usually apply their own law, thus upholding the traditional
(1) Territoriality Principle – Criminal Jurisdiction is determined by reference to the place view. 486 This view is supported by statutes in many states when such provide
where the offense is committed. alternative references to validate a conveyance of local land as to form if the
(2) Nationality theory – it is the recognized rule that a State has the power to enact instrument complies with either the law of the state where the land is located, or the
criminal laws which apply even to violations thereof committed by its citizens in other states. law of the place where the deed is executed.487 Therefore, it is appropriate to say that
(3) Protective Principle – is the determination of jurisdiction by reference to the national a foreign court will apply whatever law would be applied by the situs to resolve the
interest injured by the offense. controversy relating to formal validity.
(4) Universality Principle – the determination of the jurisdiction is referenced to the
study of the person committing the offense. Contract and Conveyance Distinctions Policy Analysis-Capacity
(5) Passive Personality Principle – The determination of jurisdiction is made by the • The law of the situs of the land, as a general rule, dictates the capacity of the parties to
reference to the nationality or national character of the person injured by the offense. convey an interest on land. However, multi-faceted transactions in land do not fall
squarely into the categorization that is assumed by the situs rule. The courts, having
What is the governing principle in the Philippines? observed such trend, have refused to apply the situs rule outright in every case arising
• The prevailing principle in Criminal law is the Territoriality Principle, with a mixture of from land transactions. In such instances, the courts have relied on the distinction
the protective principle. between contracts and conveyances.
• Examples: Article of the Revised Penal Code of the Philippines, Article 14 of the Civil
Code, and special penal laws such as Anti Hi-Jacking Law R.A. 6235. Particular Issues Conveyances: Effect and Construction
• The relevancy of the situs rule to the determination of the effects of an instrument of
PROPERTY conveyance involving land had already been discussed in the previous chapters. These
C/O: AVELINO “BOY-BASTOS” TOLENTINO, CLIFTON “CLIFORIS” SAWIT, FELIX discussions centered on the protection of state interests and convenience during
“RICKY” CABRAL AND JC de VEYRA transactions. However, a thorough analysis of the rule would require a discussion on
(Salonga, CHAPTER XXI, 1995) the construction of the instruments of conveyance containing the same.
• Obviously, the goal is to promote the security of land titles, that the precise interest
THE LEX SITUS RULE conveyed by an instrument be ascertainable, as much as possible, from the face of the
• Choice of law issues relating to property have been subjected to different choice of law instrument. Therefore, it would seem beneficial if a single rule were adhered to in the
rules depending on whether the property interest is attached to either a movable or an
immovable. Therefore, it is imperative that before any issue relating to the above- 485
Restatement, Second, Conflict of Laws, Intro., Chap 9 Top 2 (1971); DICEY AND MORRIS, CONFLICT OF LAWS 899 (11th ed. 1987).
stated is discussed, the character of the interest involved, as well as the nature of the 486

487
Nebraska v. Iowa, 406 U.S. 117, 92 S Ct. 1379, 31 L. Ed. 2d 733 (1972); Restatement, Second, Conflict of Laws.
Lorenzen, The Validity of Wills, Deeds and Contracts as Regards Form in the Conflict of Laws, 20 YALE L.J. 427, 433 (1911)
property, has already been determined. At any rate, whether an interest in a tangible

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
69
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
construction of these instruments. As pointed out by Scoles, if by the situs law a circumstances the law of the forum would not have created a trust.490 This is because a
phrase in a conveyance has a certain meaning, irrespective of the intention of the trust when created must be respected and recognized elsewhere to prevent undue
grantor, or a phrase is presumed to have a particular meaning in the absence of a disallowance of perfected rights.
contrary provision, an instrument containing such phrases should be given the same
effect. Under this approach, the meaning prevailing at the place of execution or at the Equitable Servitudes
domicile of the grantor would not be controlling, the law of the situs must be • Equitable servitudes, as defined in Black’s dictionary, is a right in respect of an object in
applied.488 virtue of which the object is subject to a specified use or enjoyment by another person
• Nevertheless, certain transactions, as enumerated by Scoles, should be construed or for the benefit of another. It is thus important to have a choice of law rule ensuring
without regard to the law of the situs. These are usually conveyances, which are the the enforcement of the same, in cases wherein the said servitude extends to a different
result of arms length negotiated commercial transactions or gratuitous transfers jurisdiction.
amongst individuals. Such is the better rule since the parties intended meaning should • Most of the issues involve land located in a single state and are occasioned by
be respected over the law of the situs, as these transactions do not undermine any of attempted enforcement of the covenant by contract action elsewhere. Also, issues on
the three situs policies and because the freedom to contract must be observed. equitable servitudes may involve land on both sides of a state line, as in interstate real
estate development subject to mutual covenants involving building or use
Covenants restrictions.491 Since most equitable servitudes arise out of covenants and contracts, it
• Blacks’ dictionary defines covenants as involving the laying down of conditions. Or as is possible to view them as obligations separate from the land itself. 492 Even so, as
Scoles puts it, in relation to land transactions, covenants are those rights not technically equitable servitudes relate to use and enjoyment of land, it appears that the situs has to
expressed in the operative words of a grant, however, the same cannot be separated protect or enforce the rights arising out of equitable servitudes. At any rate, if
from the land, and transferred without it, but goes with the land as being annexed to enforcement of a servitude is to occur at a non-situs forum by application of a law
the estate. Simply put, covenants are solemn conditions that are innate to the estate different from that of the situs, it would seem that the enforcement would have to be
and must be observed unconditionally. Such being the case, it would be highly based upon express contracts between the parties or their privies and would not
convenient if a certain rule be applied regardless of the domicile of the parties involved extend to third parties relying upon the record with regard to equitable interests in the
in the property being transacted, or the place of execution of the same. As Scoles land itself.493
observed, “Documents are recorded at the situs of the land, the rules of that
jurisdiction form the basis of the opinions on the title. Deeds need to follow a form Equitable Remedies
prescribed by the law of the situs to transfer title. Hence, it would be extremely • Lord Cranstown v. Johnston, 3 Ves. Jr. 170 (1796) – The plaintiff was a debtor of the
inconvenient to have a covenant contained in the same instrument governed by a defendant. The latter, in England, refused plaintiff’s offers of payment and requests for
different rule.” 489 The said observation clearly explains why the situs rule is being an account, and by such procrastination evidently “lulled him into security.” In the
applied in cases involving covenants. meantime, the defendant brought suit against the plaintiff in the Island of St.
• Some quarters, however, argue that covenant must be appreciated in two senses. Christopher, secured a judgment against him, and had the plaintiff’s land there sold in
They argue that a distinction should be made between those covenants for title that satisfaction, buying it himself at a sum which was but a small part of its value. All of this
run with the land and those, which are called purely personal. They insist that when was done without the plaintiff’s knowledge. After discovery of the facts, the plaintiff
the covenant involved is of the latter sense, the law of the contract must be applied sought relief in an equity court in England. In this proceeding he could not ask the
instead. However, such distinction is very technical, and courts have refused to apply English court to enforce a constructive trust created by the law of the situs, because so
the same. In the end, it still seems preferable to refer all questions pertaining to far as it appeared, all the defendant did in St. Christopher was in accordance with the
covenants, personal or otherwise, to the law of the situs of the land. law there prevailing. Hence, it is assumed that by the law of the situs there was no
trust existing in the land.
Equitable Interests Generally However, according to Massie v. Watts494, a court, having a defendant before it, may in
• The general rule observed in equitable interests in immovables follow the same rule as a proper case order him to convey foreign land, if the degree can be complied with at
the creation of interests in lands, both adhere to the land situs rule. This stems from the forum.
the same considerations of convenience and control discussed in the immediately • Matarese v. Calise495 – The plaintiff, an Italian citizen, arranged with the defendant, an
preceding subheading. The law of the situs, for example, determines whether, as a American citizen, to negotiate the purchase of Italian land from the owner who lived in
result of certain transactions, a trust in land is created, even though under such
490
Id. at 754, citing Acker v. Priest, 92 Iowa 610, 61 N.W. 235 (1984).
491
Id. at 754.
488 492
HERBERT GOODRICH & EUGENE SCOLES, CONFLICT OF LAWS (hereinafter SCOLES) 751 citing Restatement, Second, Conflict of Laws 224, Reno, The Enforcement of Equitable Servitudes in Land: Part II, 28 VA. I. REV 1067 (1942).
493
comment (b) (1971). Graham v. Hamilton County, 224 Tenn. 82, 450 S.W. 2d 571 (1969).
489 494
Id. at 752. 10 U.S. (6 Cranch) 148, 3 L.Ed. 181 (1810).

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
70
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
the United States. The defendant made the purchase and took title in his own name, validity of a mortgage, the capacity of the mortgagor, the nature of the interest in the
making payment with the plaintiff’s funds. The defendant then told the plaintiff that the land, which the secured creditor acquires, the foreclosure proceedings, all fall under
land was available only at seven times the original price. Upon discovery of this, the the situs rule, and thus, making it highly convenient to apply the same rule in
Italian citizen sued the defendant in Rhode Island, and the Rhode Island Court ordered determining and/or settling interests arising from encumbrances. Moreover, matters
the defendant, because of his fraud to convey the land, to reconvey the land to the that relate closely to remedies and procedures are normally available and within
plaintiff. This case is said to be in accord with the Massie ruling. enforceability only at the situs. Thus, it is said that the diverging approaches of the
In these cases, redress is being afforded to the plaintiff because of the personal wrong traditional view and the policy interest analysis approach actually agree that situs rule
he encountered in dealing with the transaction. Also, that the breach gave rise to the be applied. This is because, in al probability, the situs of the land will also obtain the
remedy of a constructive trust which created a personal obligation on the part of the primary interest, which is the basis of the former view.
defendant to fulfill. • Another matter worthy of discussion in encumbrances in land is the issue relating to
Generally, when third parties are involved, the situs law will protect the third party deficiencies after foreclosure. In the event of deficiency remaining after foreclosure
absent knowledge of the wrongful conveyance. However, if the third party’s and sale, where both note and mortgage are governed by the same law and suit is
acceptance of the conveyance is tortuous, the third party may be compelled to re- brought in another state for the deficiency, the existence and the extent of the right to
convey for the benefit of the injured person, even though by the situs law the recover are determined by the law of the situs and that appropriate to the contract.
conveyance may have given an indefeasible title. Recovery would not be limited by provisions of the internal law of the forum
• Irving Trust Co.v. Maryland Casualty Co. 496 – A corporation on the verge of insolvency prohibiting deficiency judgments499 or restricting recovery to the difference between
transferred to certain creditors in New York property which included land in other the debt and the true value of the land, rather than the amount realized on the sale500.
states. The corporation subsequently became bankrupt, and in a suit in the federal However, the cases of Stumpf v. Hallahan501 and California Federal Savings and Loan
district court in New York, the trustee sought to compel the transferees, over whom Asso. V. Bell502, presented a brilliant compromise between upholding the contract law
the court had personal jurisdiction, to reconvey the land, on the ground that a New between the parties and the situs rule stated that: “by holding that the contract is
York statute made the conveyance and acceptance of the title illegal under the governed by the law intended bynthe parties, and they must have intended it to be
circumstances. The U.S. Court of Appeals held that if a violation of the statute could governed by the law of the situs of the land.
be proven, the defendants could be compelled to reconvey not only the land in New
York, but also the land in other states by whose law the defendants had secured good EXCEPTIONS TO THE LEX SITUS RULE
title. The acceptance of the title being a tort, “Any court, said Judge Learned Hand, • 4 notable exceptions.
“may compel the tortfeasor specifically to reatore the property, whatever the law of 1. Firstly, the lex situs rule does not apply when it is the rights and liabilities of the parties
the situs.497 to a contract where the subject matter of the contract is an immovable that is at issue,
In sum, the rules on equitable remedies hinge on whether the interest involve is and not the effect of the transaction upon the title to the land. Instead, it is the law that
inherent to the immovable being transacted, or it results merely to a personal regulates the contract itself that will govern, though the land itself is in another state.503
obligation. If it involves the former, the law of the situs rule is respected, as held in the o Lijedahl v. Glasgow 504 – The plaintiff held a mortgage on a piece of land
Lord Cranstown case. On the other hand, if the breach results into a personal located in Colorado as a security for an obligation payable in Iowa. The
obligation by a party over which the court has jurisdiction, then even the forum may mortgagor made a deed out to the land, leaving the space for the
apply its own law as it really involves torts and the settlement of the same through grantee’s name blank. The deed contained a clause stating that it was
damages. It is said that a decree of a nonsitus court having personal jurisdiction over made subject to the mortgage, which the grantee agreed to pay. This
the parties is entitled to full faith and credit even at the situs. deed was delivered for consideration to A, who in turn transferred it, for
consideration, to B, who then filled his name as grantee in the blank
Encumbrances space. Since the debt was not paid, the holder of the mortgage sought to
• Encumbrances in land transactions often involve the foreclosure of land or other hold A for the claim. According to Colorado law, the blank deed to the
security interest in land. According to Scoles 498 , in cases involving such acts or grantee passed no interest to the purchaser until his name was written
interests, the law that would be applied is that of the situs’. This approach has obtained therein, which A never did. On the other hand, Iowa law held that
even though the validity and the effect of the obligation, which the encumbrance interest was passed to A. The question was whether the contract’s
secures, may be determined by the appropriate laws relating to the contract. Such is
the case because, the situs rule holds in most aspects of land transactions. The formal 499
Catchpole v. Narramore, 102 Ariz. 248, 428 P. 2d 105 (1967); Colodny v. Krause, 141 Ga. App134, 232 S.E. 2d 597 (1977).
500
Belmont v. Cornen, 48 Conn. 338 (1880); Provident Savigs Bank & Trust Co. v. Steinmetz, 270 N.Y. 129, 200 N.E. 669 (1936); Bullington
v. Mize, 25 Utah 2d 173 478 P. 2d 500 (1970).
495 501
111 R.I. 551, 305 A. 2d 112 (1973). 101 App.Div. 383, 91 N.Y.S. 1062 (1905).
496 502
83 f. 2d 168 (2d Cir.1936). 6 Hawaii App. 597, 735 P 2d 499 (1987).
497 503
83 F.2d at 172 Cf. Widmer v. Wood, 243 Ark. 457, 420 S. W. 2d 828 (1967). JOVITO SALONGA, PRIVATE INTERNATIONAL LAW, 383 (1979). (hereinafter SALONGA)
498 504
SCOLES, supra note 5, at 759. 100 Iowa 827, 180 NW 870, 1921

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
71
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
validity was governed by Colorado or Iowa law. The court ruled that the jurisdiction of the courts of the situs, in whose decree his entire right
assumption of the encumbrance and the obligation to pay it were would thereby be merged.514
personal covenants, and as they were made and performable in Iowa, the 3. A third exception cited by Salonga515 is the validity of a contract to transfer which is
contract must be governed by Iowa law. determined by the proper law of the contract, in contrast with the validity of a transfer
• Secondly, although the lex situs rule determines what law governs the validity and effect of land which is determined by lex rei sitae.
of a mortgage upon immovable property, the validity and effect obligation which that o Polson v. Steward516 – There was an action to enforce a covenant made
mortgage secures are governed by principles applicable to contracts generally.505 by the defendant to his wife in North Carolina to surrender all his marital
o Problems arise when there is a deficiency after the foreclosure on the rights in a certain land situated in Massachusetts. The parties were
mortgage has been made, as the cases regarding this matter have not domiciled in North Carolina, and practically every significant act
been uniform.506 If the bond and the mortgage are governed by the same connected with the covenant was done in North Carolina. The wife took
law, and suit has been brought in another state for the deficiency, the steps which under North Carolina law gave her the right to contract as a
existence and extent of the right to recover are governed by the law of femme sole with her husband as well as with others, and afterwards
the situs and contract, and recovery would not be limited by provisions release her dower in the defendant’s hands. In consideration of this
of the law of the forum prohibiting deficiency judgments,507 or restricting release, and to induce his wife to forbear suing for divorce, for which she
recovery to the difference between the debt and the true value of the had just cause and for other adequate considerations, the defendant
land, rather than the amount realized on sale 508 . However, when the executed the covenant. Defendant demurred and contended that North
bond is executed in one state and the land mortgaged lies in another, and Carolina law could not authorize a contract between them as to lands in
the provisions of these states regarding deficiency judgments differ, it is Massachusetts.
not clear which law governs. 509 The case of Stumpf v. Hallahan 510 o Justice Holmes said in the decision that “It is true that the laws of other
sidesteps the problem by stating that the contract was governed by the States cannot render valid conveyances of property within our borders
law intended by the parties, and they must have intended it to be which our laws say are void, for the plain reason that we have exclusive
governed by the law of the situs of the land. If the law governing the power over the res. But for the same reason inverted establishes that the
contract limits the recovery to the amount realized out of the land, there lex rei sitae cannot control personal covenants, not purporting to be
would seem to be no basis for the recovery of a deficiency anywhere, conveyances, between persons outside the jurisdiction, concerning a
irrespective of the law of the situs, unless, as is quite likely, the law of the thing within it. Whatever the covenant is the laws of North Carolina
place of contracting is interpreted as intended to protect only holders of could sucject the defendant’s property to seizure on execution, and his
land situated within that state.511 person to imprisonment, for a failure to perform it. Therefore, on
o A more difficult problem arises where the law of the contract permits principle, the law of North Carolina determines the validity of the
recovery of the deficiency, while the law of the situs restricts or denies contract. If valid by the law of North Carolina there is no reason why to
it.512 One view is that since in some states a mortgagee may recover the contract should not be enforced in Massachusetts.
entire amount of the bond, disregarding the requirement of the law of 4. Finally, the last exception, which has its origin in civil law codes that adopted Mancini’s
the situs that the security first must be exhausted,513 it might seem that nationality principle even with respect to problems of succession, is based upon two
he should likewise be able to disregard a law of the situs which codal provisions517. Article 16, paragraph 2 of the Civil Code of the Philippines, states
completely confines his recovery to the security. Bit the better view that whether succession is testate or intestate, whether the property is moveable or
would seem to be that if he chooses to avail himself of the procedure of immovable, and wherever the property may be located, it is the national law of the
the situs to obtain a foreclosure decree, he should be held to have person whose succession is in question, not the lex situs, that determines the order of
submitted himself and the disposition of his entire claim to the succession, the amount of successional rights, and the intrinsic validity of testamentary
provisions. Under Article 1039 of the Civil Code, the capacity to succeed is also
governed by the national law of the deceased.
505

506
Id at 467. THE LEX SITUS RULE: MOVEABLES
SCOLES, supra note 5, at 760.
507
GOODRICH, supra note 22, at 468, citing McGirl v. Brewer, 132 Or. 422, 280 P. 508, 285 P. 208, 1929 • In the Middle Ages, the rule of mobilia personam sequuntur, the rule that movables
508
Id., citing Belmont v. Cornen, 48 Conn. 338, 1880; Provident Savings Bank & Trust Co. v. Stelametz, 270 NY 129, 200 NW 669, 1936 follow the person of the owner, was initiated by Italian statutists. This was because
(land in Florida, place of execution of bond not indicated).
509
GOODRICH, supra note 22, at 468-469
510
101 App. Div 383, 91 NYS 1062, 1905, affirmed 185 NY 550, 77 NE 1196, 1906.
511 514
GOODRICH, supra note 22, at 469, citing Cf. Harris v. Metropolitan Casualty Ins. Co. of New York, 156 Misc. 692, 282 NYS 449, 1935; GOODRICH, supra note 22, at 469, citing Cf. Battle v. Battjes, 274 Mich. 267, 264 NW 367, 1936.
515
36 Col. L. Rev. 487, 1936. SCOLES, supra note 5, at 384.
512 516
Id. 167 Mass. 211, 45 NE 737, 36 LRA 771, 57 Am. St. Rep. 452, 1897.
513 517
Hall v. Hoff, 295 Pa. 276, 145 A. 301, 1929. SCOLES, supra note 5, at 385.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
72
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
travel was not very common and the location of the property and the owner was system that can act as an independent arbiter of conflicting claims. Moreover, its right
generally the at the abode of the owner. This rule was embodied in various European of control satisfies the expectations of the reasonable man, for a party to a transfer
civil codes, such as the old Italian Civil Code of 1865 and the Civil Code of Spain of naturally concludes that the transaction will be subject to the law of the country in
1888, which was extended to the Philippines. Later on this was adopted by English and which the subject-matter is at present situated…522
early American law.518
• According to this rule, the personal law of the owner controlled questions regarding CRITICISM ON LEX SITUS
movable property. This personal law was either based on the owner’s domicile or • It has been argued that the rule applying lex situs to movables, as embodied in Article
nationality. The justifications of the rule were threefold. First, that since the very 16 of the Civil Code of the Philippines is too inflexible. This is based on the fallacy that
character of movables was that they could be moved from place to place at will, the “the possible questions arising out of a transfer of movables all fall into the same
location of the movable at any given time was largely a matter of chance. Second, that category and are all of the same juridical nature. This is not so.”523
since movables had no fixed situation, an artificial situation could be ascribed to them. • Another problem with the rule is that it lumps together all kinds of movable property
Finally, the rule of mobilia personam sequuntur was simple and convenient, since one law and subjects all of them to the rule of the place where they are situated, regardless of
would be applied to a particular movable property regardless of where it was located. whether these movables are tangible or intangible, or are ‘choses in possession’ or
• Unfortunately, there was difficulty in applying the rule in practice. It was unfair to ‘choses in action’, in which case their situs cannot technically be said to be at any
expect that all persons dealing with the owner would know his domicile or nationality, particular location. There is also a problem with regard to objects that are in transit, or
particularly because it may change from time to time. It was also unfair to expect that means of transport, in which case there is a question of what is regarded as their
persons dealing with the owner would know the personal law that was applicable to situs.524
him. This difficulty was an obstacle to trade and commerce because of the uncertainty
it caused.519 The classes of movables are:
• In modern times, the rule of the situs has largely replaced the rule of mobilia personam • Choses in possession: tangible physical objects
sequuntur in many countries, including the Philippines. Article 16, paragraph 1 of the • Choses in action: debts, patents, copyright, goodwill, trademarks, trade names, shares of
Civil Code of the Philippines provides: stock
• “Real property as well as personal property is subject to the law of the country where
it is situated.” CHOSES IN POSSESSION
• This replaces the rule found in the Spanish Civil Code that states that real property is • The general rule for choses in possession is that the law of the State where the property
governed by lex situs and personal property is governed by the national law of the is located at the time of the transaction in question determines the creation and
owner. transfer of the interests.525 This is because commerce depends on the protection of
• According to Prof. Wolff, the rationale of applying the lex situs rule to movables is as the purchaser who must buy without investigation of the applicable law, at least not
follows: “Real rights should be as manifest as possible; third parties who intend to beyond where the goods are located, which is usually the place of transaction as
acquire a right in a thing must be protected against the risk that such a thing might be well.526
subject to a foreign law under which the acquisition would be voice. While under the • This is easily seen in cases where the movable is delivered as part of the transaction,
law of contracts, the contracting parties have a choice as to the applicable law because because the situs is the clear focal point of the transaction. However, where the
they alone are affected by the contract, the acquisition of a right in rem is something delivery is to be made at a future date after the transaction, and the location of the
which concerns or may concern a great number of unknown strangers. As the place movable during the transaction bears no significant relationship to the transaction until
where a thing is situated is the natural center of rights over it, everybody concerned delivery is made, it is suggested that the proper law of the transaction is that law most
with the thing may be expected to reckon with the law of such place.”520 significantly related to the issue presented.527
• Another important point is that the place where a movable is located possesses • Cammell v. Sewell (1858)528 – A Russian seller shipped in Russia a cargo of timber on a
coercive power over the thing, and final authority rests with the law of that place, Prussian vessel to an English merchant in England. The vessel was wrecked off the coast
which is something that parties to a voluntary transfer of that movable should be of Norway, and the timber was sold to X at a public auction held at the instance of the
expected to take into account.521 Professor Cheshire states: master of the ship in Norway. According to the law of Norway, the title of the
• Where claimants have different domiciles or where they rely upon transactions in
different countries, the lex situs has the great advantage of being a single and exclusive
522
Cheshire (North), 525.
523
Cheshire, 523.
524
SCOLES, supra note 5, at 388.
518 525
Id. Id, 389
519 526
SCOLES, supra note 5, at 386. Goodrich, Section 153, at 304
520 527
Wolff, 520 SCOLES, supra note 5, at 389.
521 528
SCOLES, supra note 5, at 387. 3 H & N 617; on appeal (1860) 5 H & N 728.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
73
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
purchaser was good and valid, but not according to English law. It was held that the law 2. means of transport
of Norway must govern. “If personal property is disposed of in a manner binding • In the case of goods in transit, the practice of treating the documents of title to the
according to the law of the country where it is, that disposition is binding everywhere.” goods as representative of the goods themselves mitigates the potential difficulties,
• Shanahan v. George B. Landers Cosntruction Co. Inc. 529 – the plaintiff, a construction because in effect the situs is that of the documents of title. But Cheshire maintains that
worker in New Hampshire, agreed to buy a power trench hoe from Shanahan. The no one law can be made the exclusive arbiter of disputes arising out of a transfer of
contract for a conditional sale was finally executed in Massachusetts. Deliver was made goods in transit:
in Vermont, where the hoe was used on a single job. The how was taken, as • The problems must be broken down. A dispute between the parties to a particular
contemplated by the parties, to P’s headquarters in New Hampshire, out of which it transaction, as, for example, a mortgage of the goods granted by the assignee, will be
was thereafter used. P’s contract and notes were assigned by Shanahan to a finance governed by the proper law of the transaction. If the movables come to rest sufficiently
company, one of the defendants. P failed to make his payments when due, and to admit of a dealing with them, as where they are seized by creditors in accordance
defendants repossessed the hoe in New Hampshire, then took it back to Massachusetts with the local law or wrongfully sold by the carries, the question of title must clearly be
where they resold it. The resale was lawful under Massachusetts law, though what the determined by the lex situs. If the transit is by sea in a single ship, there is much to be
defendants did would constitute a conversion under New Hampshire law because the said for applying the law of the flag.532
defendants did not give P a 10-day notice of the resale required by New Hampshire • As to what law should govern rights in movables, the two most important events upon
law. It was held by the Massachusetts law that New Hampshire’s law, not that of which what law should govern rights in movables according to Wolff533 are:
Massachusetts, should govern. Vermont’s law was disregarded, though it was the place o Seizure and arrest: When the owner’s creditors seize good in transit,
of delivery of the hoe, and presumably also the situs when title passed. New Hampshire the transport is discontinued and a temporary resting place is thereby
law was selected due to its substantial connection with the transaction; the buyer created, on which law depends the legality of the seizure, and if a lien,
signed the contract there, its business and corporate headquarters were located there, pledge, privilege, or similar right is acquired.
the hoe was kept there most of the time, and the alleged conversion took place there o Disposition of the goods: The owner of the goods may treat a
contrary to that State’s law. temporary resting place as if it were a real situs and transfer ownership
• The decision in Shanahan can be better explained in terms of the Second American or mortgage of the goods according to the law of that place. However,
Restatement, as New Hampshire law was the law of the most significant relationship. the owner may choose between other legal systems, including the lex loci
• With regards to voluntary transfers of interests in chattels, other than assignment for actus or the country of destination.
the benefit of creditors, the Second Restatement provides: • Means of transport or conveyances such as trains, motor cars, vessels and aircraft
• The validity and effect of a conveyance of an interest in a chattel as between the parties generally have fixed stations or resting places where they are resident even if
to the conveyance are determined by the local low of the state which, with respect to temporarily absent. For example, a seagoing vessel may have the law of the flag replace
the particular issue, has the most significant relationship to the parties, the chattel, and the lex situs, although the owner or his creditors may use the lex situs if the vessel is in a
the conveyance…530 foreign port.
• The Second Restatement holds that in the absence of an effective choice of law by the
parties, the greater weight will usually be given to the lex situs of the chattel at the time CHOSES IN ACTION
of the conveyance than to any other contact in determining the State of the applicable • Choses in action are equivalent to “intangible movables”. They are roughly divided into
law. three classes: debts, negotiable instruments, and corporate stocks or shares.
• With respect to acquisition of title by operation of law, the Second Restatement holds
that they should be governed by the lex situs. This covers title acquired by prescription Debts
or adverse possession, validity and priority of attachments, levies of execution, the • The law on voluntary transfer of debts is still unsettled. Early theories hold that a
creation of statutory liens, all of which are to be governed by the place where the voluntary transfer or assignment of debt should be governed by the law of the domicile
chattel is located. 531 This is because the State where the chattel is located has the of the owner, although modern doctrine has abandoned this theory.
dominant interest in determining the circumstances under which an interest in chattel • A second theory is that the assignment of a debt is governed by the law of the place
may be acquired by operation of law. where the assignment is executed. However, the place of assignment may be the least
important of all points of contact and may be entirely fortuitous. Also, there may be
2 categories of movables where the lex situs rule cannot be easily applied: several leges actus in the case of multiple assignments where several assignees contend
1. goods in transitu and for priority.

529
266 F 2nd 400 (1st Cir. 1959).
530 532
Section 244, Second Restatement. Cheshire, 536-537.
531 533
Section 246, Second Restatement. Private International Law, 529.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
74
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• A second theory is that the assignment of a debt is governed by the law of the place determined by the law of the place where the instrument is at the time
where the assignment is executed. 534 However, the place of assignment may be the of the transfer.” Lorenzen has suggested on the other hand that the
least important of all points of contact and may be entirely fortuitous.535 Also, there respective party should be bound if the holder of the negotiable
may be several leges actus in the case of multiple assignments where several assignees instrument has acquired title either in accordance with lex loci contractus
contend for priority. or the law of the place of the transfer. 540
• A third view is that a quasi-situs, that is, the place where the debt is “properly Corporate Stock
recoverable”, should be ascribed and the debt should be governed by the law of the • What laws govern the transfer of shares of stock? Where the transfer or assignment has
place where the performance of the duty would normally be expected.536 the consequence of changing the relations of the parties with the corporation, the law
• Finally, there is the view that if a debt is created by a contract between assignor and of the place of incorporation governs, because “the interest of the stockholder can be
debtor, the proper law of the original transaction out of which the choses in action effected only though the corporation itself, by a transfer of ownership on the books,” as
arises should likewise govern the transfer or assignment of the debt.537 embodied in the Corporation Code.
• Involuntary assignments of choses in action are usually effected by garnishment, and • As between the assignor and assignee, however, the effect of a transfer or assignment of
questions as to their validity and effect are governed by the law of the State where the share certificate will be governed by the law most closely connected to the
jurisdiction is effectively exercisable against to the garnishee.538A third view is that a transaction. 541
quasi-situs, that is, the place where the debt is “properly recoverable”, should be
ascribed and the debt should be governed by the law of the place where the INTELLECTUAL PROPERTY
performance of the duty would normally be expected. Conceptual Basis
Negotiable Instruments The concept of intellectual property, as a chose in action, must first be determined before an
• Goodrich describes a negotiable instrument in the following manner: analysis on its impact on Conflict of Laws rules may be appreciated. The challenge however
• If the subject matter of the transaction is an negotiable instrument, such as a is that it is more than difficult to arrive at a basic concept of what is and is not intellectual
promissory note or a bill of exchange, further considerations enter into the question. property. Legalists, authors, and regulatory bodies, over the years, have endeavored to
The paper on which the promise in the one case ore the order in the other is written, provide as many parameters as possible to what may be classified intellectual property. What
may be only the evidence of the chose in action in which the holder has ‘property’. But can be appreciated from these examples is that though such property itself is necessarily “of-
such paper is treated in the commercial world and by the law as having a significance the-mind,” the effects and usage thereof is capable of pecuniary estimation and regulation.
not given to the ordinary written evidence of a contract of the parties. Bills and notes One author writes:
developed under the law merchant; common law rules about the non-assignability of In the Philippines
choses in action played small part in their history. They pass from hand to hand by The Intellectual Property Code of the Philippines (Republic Act 8293) which was signed into
endorsement and delivery; are subject to larceny; are subject to attachment and may law by then President Fidel Ramos on June 16, 1997 and took effect on January 1, 1998,
be levied upon in execution; in other words, they are treated as tangible property.539 defines intellectual property as consisting of patents, industrial designs, trade marks and
• There are two important questions that must be answered in connection with service marks, copyrights and related rights, geographical indications, layout designs of
negotiable instruments. integrated circuits, and undisclosed information. Moreover, the Code provides protection for
o First, what law decides whether a given instrument is negotiable or not? utility models and new plant varieties under Republic Act 9168, which was signed into law
This is important because laws on bills and notes vary from country to and took effect on July 20, 2002.542
country. The original Restatement under Section 348 held that the law • Patent
of the place of contracting governs negotiability of a note, but Will Patent refers to titles granted to inventions only. In the Philippines, patent had been used in
contends that the law governing the rights embodied in the note decides its generic sense, to include titles to inventions, utility models, and industrial designs.543
whether it is negotiable or not. • Utility Model
o Second, what law determines how negotiable instruments and the rights A utility model is any technical solution of a problem in any field of human activity which is
merged in them are to be transferred, and what are the effects of a new and industrially applicable. A utility model may be, or may relate to, a useful machine, an
transfer? The original Restatement adopted the principle that “the implement or tool, product or composition, or an improvement of any of the foregoing.544
validity and effect of a transfer of a negotiable instrument are • Industrial Design, Trademark, and Trade Name

534
Second Restatement, 348-350.
535 540
Cheshire, 495-496; Wolff, 552. Lorenzen, Conflict of Laws Relating to Bills and Nots (1919), p. 140.
536 541
Swiss Bank Corp. v. Boehmische Industrial Bank, KB 673, 678 (1923). Beale, Foreign Corporations, s. 376.
537 542
Wolff, 548; Cheshire (North) 541; Foote, 296. THE LAW ON INTELLECTUAL PROPERTY (A PRIMER), Office of the Press Secretary, Bureau of Communication Services, Manila, p. 1.
538 543
SCOLES, supra note 5, at 395. Id.
539 544
Goodrich (Scoles) Sec. 163. Id., at 2.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
75
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
An industrial design is any composition, lines or colors or any three-dimensional form, • WIPO was established in 1967 and charged with promoting the protection of
whether or not associated with lines or colors; provided, that such composition or form, intellectual property throughout the world and ensuring administrative cooperation
gives a special appearance and can serve as a pattern for an industrial, product or among the various agreements dealing with intellectual property (Art. 3). WIPO is part
handicraft.545 of the UN system, and has been the sponsoring entity for many of the important
A trademark is a system providing for protection for mark, collective mark, or trade name.546 conventions in this area. The texts of treaties administered by WIPO can be found at
Trade name means the name or designation identifying or distinguishing an enterprise.547 the WIPO website.
• Copyright and Related Rights • It is important also to recognize that choice of law issues persist despite the overlay of
A copyright is a protection extended to expressions and not to ideas, procedures, methods a well-developed system of international norms imposed by multilateral treaties such as
of operation or mathematical concepts. Such expressions may be in the form of literary, the WTO TRIPs Accord, the Berne Convention, and the Paris Convention. Treaty
scholarly, scientific and artistic works. Related rights refer to the protection extended to obligations include minimum standards of protection in addition to the requirement of
derivative works, to include among others, dramatizations, translations, adaptations, national treatment (non discrimination against foreign rightowners), but do not as a
abridgements, arrangements, and other alterations of literary or artistic works.548 general rule prescribe applicable law.551
• Geographical indications
Geographical indications are indications that identify a good as originating in the territory of a INTELLECTUAL PROPERTY IN THE CONFLICT OF LAWS
country or a region or locality in the territory, where a given quality, reputation or other The Territorial Framework
characteristics is essentially attributable to its geographical origin.549 • Similar to other choses in action, intellectual property is without a definite situs and must
• International Instruments therefore follow the place of its registration or protection. Lex loci protectionis, also
“When we speak of the law of intellectual property, we are generally speaking of the law of a known as the "territorial principle", enables each country to apply its own law to the
particular jurisdiction like the United States, France or China. A practitioner is, in the infringement of an intellectual property right that is in force in its territory. This is
common case, only concerned with the law of his or her jurisdiction. However, intellectual because “intellectual property rights arise, though creation or registration, in each
property is interesting because of the number of multilateral conventions that have been country for which a work seeks protection; infringements are governed by the laws of
concluded in an effort to harmonize national laws. And increasingly these conventions have the countries where the alleged infringing acts take place. In intellectual property,
had direct effects on national law. With the increases in trade, and now, with the Internet, it cross-border acts may best be localized, for purposes of resolving conflicts of laws, by
has become important to understand not only the law of one’s own jurisdiction, but also the considering consequences for judicial remedies. 552 This has tended to mean that the
law of other jurisdictions and the international conventions that regulate intellectual property forum, as the place of registration or of infringement, will apply its own substantive
by means of bilateral and multilateral commitments.”550 intellectual property laws.” 553 Drawing from the fact that this principle has been
adopted by both the Berne Convention for the Protection of Literary and Artistic
The TRIPS Agreement Works of 1886 as well as the Paris Convention for the Protection of Industrial
• At the conclusion of the last round of trade negotiations under General Agreement on Property of 1883, it can be confirmed that the rights held in each country are
Tariffs and Trade ("GATT"), the Agreement on Trade Related Aspects of Intellectual independent. Whereas in copyright cases, the courts apply the law of the country
Property ("TRIPS") was signed by the participating nations. This agreement defines where the violation is committed, the counterfeiting of an industrial property right is
standards of intellectual property rights and enforcement mechanisms for individual governed by the law of the country in which the patent is issued or the trademark or
countries to follow, and incorporates those into the existing Dispute Settlement model is registered.554
mechanism of the WTO. It defines these standards by reference to existing agreements • Świerczyński – The special conflict rule concerning international infringements of
concluded under the auspices of the World Intellectual Property Organization. In some intellectual property rights was put forward in the Proposal for the Regulation of the
cases nations are required to harmonize their intellectual property laws with these European Parliament and the Council on the Law Applicable to Non-Contractual
existing agreements. Obligations ("Rome II Proposal"). The aim of this proposal is to unify Member States'
• The WTO and the World Intellectual Property Organization ("WIPO") are working rules on the conflict of laws regarding non-contractual obligations and thus further the
together. There is an Agreement between the World Intellectual Property harmonization of private international law in relation to civil and commercial
Organization and the World Trade Organization where WIPO agrees to facilitate the obligations. Unfortunately, the wording is ambiguous, which may lead to different
WTO implement TRIPs. interpretations in identical cases. It is essential that the future conflict rule precisely

545 551
Id. Jane C. Ginsburg, Conflicts of Law and Intellectual Property, Columbia University School of Law at
546
Id. http://www.aals.org/profdev/international/ginsburg.html. (last visited Feb, 2006) (hereinafter GINSBURG)
547 552
Id. Paul Edward Geller, International Intellectual Property, Conflicts of Laws, and Internet Remedies, EUROPEAN INTELLECTUAL PROPERTY REVIEW
548
Ibid., at 3. (2000), vol. 22, no. 3, at p. 125. (hereinafter GELLER)
549 553
Ibid. GINSBURG, supra note 75.
550 554
WEIGMANN, supra note 62. ŚWIERCZYŃSKI, supra note 76.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
76
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
determines the law applicable to non-contractual obligations arising from infringements The pronouncement of the Supreme Court in the foregoing cases were in
of intellectual property rights and also Internet-related torts. contravention of its ruling in the Mentholatum case, where it held that a foreign
• Wolff – General Rule: “A state will protect only such patents, designs, trade marks, corporation doing business in the Philippines without the necessary license cannot
trade names, and copyrights as it has itself granted either by particular act or general prosecute an action for infringement of its trademark.
statute. No state applies foreign laws to questions of patents, copyrights, and the like • Philips Export vs. Court of Appeals – which was decided in 1992, Philips Export (Philips), a
or recognizes rights of this class created under foreign law.” 555 Thus, if an inventor foreign corporation not engaged in business here, was the registered owner of the
would like his creation be protected by a patent in States A and B, then he has to have trademark “Philips.” Respondent Standards Philips Corporation (Standard), on the
patents granted by both states. other hand, was the holder of a Certificate of Registration issued by the Securities and
In the Philippines Exchange Commission.
• Under the Intellectual Property Code of the Philippines, a patent has a term of Philips Export then filed a letter of complain with the Securities and Exchange
protection of twenty years from the date of application; for utility models, seven years; Commission praying for cancellation of the word “Philips “ from Standard’s Philips
for industrial design, five years; for trade mark, ten years; for layout designs, ten years; Corporation’s corporate name on the ground of prior registration in the Bureau of
for copyrights, the lifetime of the author and fifty years thereafter; for new plant Patents of such trademark and logo. Standard contended that Philips did not have the
varieties, twenty-five years from the date of granting of certificate of registration for capacity to sue, not having been licensed to do business in the Philippines.
trees and vines, and twenty years for all other types of plants. After the expiration of The Supreme Court ruled in the case that “. . . a corporation’s right to use its
the forgoing terms of protection, the intellectual property becomes a public corporate and trade name is a property right, a right in rem, which if may assert and
property.556 protect against the world in the same manner as it may protect its tangible property,
• Western Equipment vs. Reyes – The Court ruled that the right to use the company’s real or personal, against trespass or conversion. It is regarded , to a certain extent, as a
corporate and trade name is a property right which may be asserted against the whole property right and one which cannot be impaired or defeated by subsequent
world. In that case, defendants filed an Articles of Incorporation with the intention of appropriation by another corporation in the same field.”559
organizing a domestic corporation under the Philippines Corporation law to be known • Emerald Garment Manufacturing Corporation vs. Court of Appeals – the policy of the
as “Western Electric Company, Inc.,” for the purpose of manufacturing and dealing in Court in allowing foreign corporations not licensed to do business in the Philippines to
electrical and telephone apparatus and supplies. To protect its trade name, Western sue in Philippine Courts was upheld. In that case, H.D. Lee Co., inc. a foreign
Electric Company, Inc., a foreign corporation organized under the laws of New York, corporation not engaged to do business in the Philippines, filed with the bureau of
USA, which was not licensed or engaged in business in the Philippines, prayed for a Patents, Trademarks and Technology Transfer a Petition for Cancellation of
temporary injunction to restrain the issuance of Certificate of Incorporation to the Registration for the trademark “ Stylistic Mr. Lee used on different lines of clothing
defendants. The defendants opposed the move, contending that WEC (USA) did not under the name of Emerald Garment Manufacturing Corporation, a domestic
have the capacity to sue for not being licensed to operate nor being engaged in the corporation. As a defense, Emerald questioned the capacity to sue of Lee Co., being a
business in the country. In the case, the Court ruled that the right to use the foreign corporation not licensed to do business in the country.
company’s corporate and trade name is a property right which may be asserted against The Supreme Court ruled in the case that H.D. Lee Co., Inc. had the capacity to sue
the whole world.557 for infringement irrespective of its lack of license to engage in business in the country
• General Garments Corporation vs. Director of Patents – The Puritans Garments but denied the company protection for it failed to prove actual use of the emblem in
Corporation , a corporation duly registered under the laws of Pennsylvania but not the local market, a requirement of Sections 2 and 2-a of the same law560
under Philippines law, was allowed to maintain a suit in the Philippine Patent Office for Finally, in 1998, the Intellectual Property Code of the Philippine (Republic Act 8293)
cancellation of the trade mark “Puritan,” which had been registered under the name of was passed into law. This law allowed foreign corporation not engaged in business in
General Garments Corporation, a Philippine Corporation. According to the Supreme the Philippines to file civil or administrative action for opposition, cancellation,
Court: “A foreign corporation which has never done . . . business in the Philippine infringement, or unfair competition.561
Islands and which is unlicensed and unregistered to do business in the Philippines, but is
widely and favorably known in the Islands through the use therein of its products The Ambiguity of Territoriality
bearing its corporate and trade name has a legal right to maintain action in the islands. • It would seem ideal in many circumstances to apply the law of the territorial location.
“The right to the use of the corporate and trade name is property right, a right in rem, However, given the nature of intellectual property, especially with the advent of the
which it may assert and protect in any courts of the world . . . “558 internet and multiple-situs databases, it has become increasingly difficult to determine
the territorial location of infringement.

555
Wollf, 558, as cited in Salonga.
556 559
Id., pp. 11,12. 206 SCRA 457 (1992).
557 560
51 Phil. 115 (1927). 251 SCRA 600 (1995).
558 561
41 SCRA 50 (1971). COQUIA, supra note 84, at 322.

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
77
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• Geller – Unfortunately, the key category here, the place of infringing acts, can be country, often but not always the forum country, which this article will call the "home"
doubly ambiguous. To start, before knowing what place that is, a court must localize country.
the acts in question, but authorities differ about what law or laws provide terms in o Inward-bound transactions commence outside the home country, for
which to characterize infringing acts. In addition, the place of such acts can be extended example, with preparatory acts such as authorizing and organizing
backwards to that of preliminary acts, like organizing the infringement, or forwards to infringement and fabricating infringing copies or products abroad, but end
the place of damages. At the end of the twentieth century, the meaning of this place, up in acts of marketing inside the home country;
once apparently obvious in geographical space, is becoming impossible to pin down in o outward-bound transactions commence in the home country but are
cyberspace. Now transactions cross multiple borders simultaneously in global, consummated in acts of exploitation in foreign markets.
interactive networks. • The case law provides instances of U.S. and European courts that, with jurisdiction
Localizing acts taking place within the Internet dramatizes the policies at stake in over parties abroad who are engaging in inward-bound infringing transactions that
conflicts analysis. In localizing an infringing act in one spot or another, a court might threaten markets at home, localize these transactions as taking place in the home
apply the law of one country or another throughout any global network. That is, country in that they enjoin them under that country's law. By parity of reasoning,
improper localization, especially of Internet transactions, can lead to extraterritorially courts should localize outward-bound transactions, not where they commence in the
spilling the policy effects of one country’s law over into another country. In particular, home country, but in the other countries whose markets they target, and should apply
if the law of one country provides too little protection, or another too much the laws of these foreign countries, respectively, to enjoin acts at home that authorize
protection, applying one or the other law can result in pirate havens or choke points or otherwise generate infringing exploitation abroad. Some cases fall outside this
for data flow in the network. For example, what law should govern transmitting raw distinction, notably where copies that are illicit under the law of the home country
data from a European database via the Internet to the United States or China? transit that country's territory on their way to another country where they may be
Suppose, on the one hand, that a court localizes the relevant acts in the United States marketed, perhaps legitimately. Special provisions may still mandate seizure in the
or China, where data is received but not strongly protected: then, to European eyes, home country.
pirates may find havens in these countries, from which data might be more or less • Playboy Enterprises v. Playmen – Playboy had the Italian magazine Playmen enjoined from
freely retransmitted. Suppose, on the other hand, that a court localizes inside Europe infringing its trademark in the United States. In the 1990s, the Italian publisher set up a
all unauthorized transmissions of raw data from Europe: then a European law granting Playmen website in Italy, after having registered that title as a trademark in Italy. The
property rights in the data might apply to the transmissions, even to the United States Southern District of New York then ordered the publisher either to stop access to the
or China. That choice of law might well choke off data flow to or at points within the website in the United States or to shut down the site entirely. In imposing the latter
Internet that policies in these countries would still leave open. alternative, the court would seem to have lapsed into the questionably extraterritorial
Resolving the Ambiguity application of domestic trademark law. One fact, however, distinguishes the case: as
• “There are two principal areas of tension, one technology neutral [and] the other the court noted, Playboy Enterprises had succeeded in asserting its mark against
technology-prompted. In the technology neutral category come questions regarding the Playmen in European countries besides Italy. Thus the website effectively also infringed
law applicable to ownership of copyright. In the second category are issues concerning foreign marks, making the case one in which infringing transactions were potentially
the law applicable to infringements when these occur pervasively and simultaneously inward-bound relative to many countries at once, although infringement outside the
through new forms of communications such as satellites and the Internet.”562 Geller United States was neither pleaded nor remedied as such. It has been argued that, in
opines that the Courts have a choice of either utilizing a static or dynamic approach – such cases where infringement ostensibly takes place in many jurisdictions at once, the
“either they treat conflicting laws as arising out of communities that are static and courts should apply the most protective of the laws effective in all these possible
unchanging, or they resolve conflicts in the light of the historical dynamics that have protecting countries. This argument has the merit of providing grounds for a
been bringing communities together. Under the static view, it is difficult to transcend preliminary injunction to stop the unauthorized hemorrhaging of protected materials
the incoherence that tends to arise when courts respectively follow their own into a global network, but it risks imposing the policy effects of one country’s law on
established laws in formulating conflicts of laws. Under the dynamic view, it is possible other countries. Optimally, a court would explore more differentiated solutions, for
to look to globalizing law that is emerging to govern many smaller communities as they example, as the facts would have allowed in the Playmen case, basing a wide-ranging
come together into larger communities.”563 injunction on law common to most of the overall marketplace threatened by the
• Geller – The first desideratum, a globally seamless fabric of remedies, should lead infringing act.
courts to stop infringing transactions in their tracks. A distinction may be drawn • The second desideratum, a coherent web of remedies, becomes critical as courts reach
between inward-bound and outward-bound transactions relative to any given final judgment, specifically in granting monetary awards. The international regime of
intellectual property is predicated on national treatment, so that enterprises normally
consult the law of a country before marketing in that country. To be coherent with
562
this principle, the law of a given country should apply to ascertaining monetary awards
GINSBURG, supra at note 75.
563
GELLER, supra at note 77.
to remedy infringement which prejudices or usurps the market for protected materials
in that country. Unfortunately, national courts have not adopted fully consistent
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
78
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
approaches to granting monetary awards in cross-border cases, sometimes applying • Hang Lung Bank vs. Saulog – Although petitioner asserts that it is merely seeking the
their own home laws in ascertaining damages or profits incurred abroad. Consider this recognition of its claims based on the contract sued upon and not the enforcement of
pair of cases with similar holdings but not necessarily consistent results across borders. the Hong Kong judgment, it should be noted that in the prayer of the complaint,
This analysis then localizes the place of infringement in the country of the targeted petitioner simply copied such judgment with respect to private respondent’s liability.
market. Thus the law of this country will generally apply to incoming transactions to The complaint thus appeared to be an enforcement of the Hong Kong judgment
the extent that these threaten or actually prejudice this country's market, but this law because it prayed for the grant of the affirmative relief given by said foreign judgment.
will not normally apply to outgoing transactions aiming at foreign markets. In Internet The enforcement of judgment entails more than recognition, it presupposes its
cases where many markets are targeted at once, the court may find it sufficient to base recognition and it requires an affirmative relief from the court. Therefore, a foreign
a provisional injunction on law common to most of the overall marketplace being judgment may not be enforced if it is not recognized in the jurisdiction where
threatened; however, the court should base final monetary awards on the law of each affirmative relief is being sought
country whose market is prejudiced. In extreme cases, it might be possible to argue • Prof. Ehrenzweig –
for exceptions to this general approach by invoking international public policy, the o All divergent opinions and attitudes obtain, ranging from
ordre public international, that underlies the treaty regime of intellectual property. o A flat denial of recognition by insistence upon a trial de novo; through
Such policy is most authoritatively manifest in the TRIPs Agreement, which provides o A law granting recognition on condition of reciprocity; to
for specific injunctive remedies to stop cross-border piracy, while it generally o A nearly unconditional enforcement of foreign judgments
contemplates "remedies which constitute a deterrent to further infringements.” Thus,
in a case where no other remedy is available to stop proliferating cross-border Rose vs. Himely (1808) Hilton vs. Guyot (1895)
infringement, this policy could be invoked to support applying home law which Chief Justice Marshall French hostility to foreign judgments
specifically contemplates relief against outgoing transactions that target foreign Foreign judgments could be subjected to rendered against its respective citizens was
markets. inquiry into the rendering court’s lawful fully reciprocated by the practice of
jurisdiction over the cause and the parties “reciprocal retaliation”
involved
RECOGNITION & ENFORCEMENT French hostility to foreign judgments Judgments rendered in a foreign country, by
C/O: MIKE MATE, JANG MORENO, TRINA GARCIA, TRINA ILLARDE rendered against its respective citizens was the laws of which another country’s
(Salonga, CHAPTER XXIII, 1995) fully reciprocated by the practice of judgments were reviewable upon the merits,
“reciprocal retaliation” are not entitled to full credit and conclusive
RECOGNITION effect when sued upon in the latter, but are
• A foreign judgment is given the same effect that it has in the State where it was Judgments rendered in a foreign country, by prima facie evidence only of the justice of
rendered with respect to the parties, the subject matter and the issues involved the laws of which another country’s the plaintiff’s claim
• The extension to another State of the res judicata effect of a judgment obtained in one judgments were reviewable upon the merits,
State are not entitled to full credit and conclusive
effect when sued upon in the latter, but are
ENFORCEMENT prima facie evidence only of the justice of
• In addition to the recognition of a foreign judgment, affirmative relief is given to a party the plaintiff’s claim
entitled to the same because of such judgment

DISTINCTION The present Philippine Rules on Foreign Judgments


1. RECOGNITION System of Qualified Recognition
Foreign judgment is given the same effect in another State
The extension of the foreign judgment’s res judicata effect Story –
Enforcement of the foreign judgment is not necessarily implied • Judgments in rem are conclusive upon the title to the thing
• Judgments in personam are subject to examination into the merits if sued upon by the
2. ENFORCEMENT successful plaintiff
Recognition of the foreign judgment • In either case, such judgments may be repelled by evidence of want of jurisdiction, want
Giving affirmative relief to a party entitled to it because of such foreign judgment of notice to the party, collusion, fraud, or clear mistake of law or fact (Section 48, Rule
Recognition of the foreign judgment is necessarily implied 39, Rules of Court)

INTERNATIONAL SETTING
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
79
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
COMITY AND RECIPROCITY the contest, and that the matters once tried shall be considered forever settled as
 According to Salonga, earlier cases held that recognition of foreign judgments is based on between the parties”
comity
 Comity necessarily involves the issue of reciprocity and reciprocity could lead to  Policy of Preclusion: One trial of an issue is enough!
retaliation (eg. In case of 2 states, where one of them refuses to recognize judgments Judgments should be enforced unless there are reasons for denying the enforcement such as
rendered in the other state) lack of jurisdiction, irregularity in the proceedings, fraud, etc.

 English Rule (creation of obligation): recognition and enforcement is not based merely THE PHILIPPINE SETTING
on comity. Foreign judgments create “obligations” between the parties.
BUT..foreign judgments may still be reviewed in exceptional cases (fraud, etc.)
 American Rule (regularity of proceedings): There is no reason to deny enforcement of The lex fori always governs recognition
foreign judgment when the proceedings had in the foreign country was fair and regular. and enforcement.
(note: the same is true in Italy)
 French Rule: foreign judgments obtained by Frenchmen are automatically enforced; but
if obtained against Frenchmen, they have to be subject to a new suit. Theoretical Basis
• Object of recognition/enforcement = protection of the reasonable expectations of the
• Hilton vs. Guyot – In this case, the US Court went beyond regularity of the proceedings parties  equivalent to policy of preclusion, which is equivalent to res judicata  thus,
had in the French Court. The Court deemed it immaterial to discuss whether or not res judicata may be the current theoretical basis (but only according to authors)
irregularities in the proceedings were actually present. Due to lack of reciprocity on • Salonga believes is only the basis for the earliest cases
the part of France, the foreign judgment cannot be enforced without a re-examination • But today, the SC believes that comity is the theoretical basis for recognition
of the merits of the case. • Exception  the basis is an obligation which is given rise to by a foreign judgment  it
is assumed that the parties willingly submit themselves to be bound by the judgment 
ARGUMENTS AGAINST RECIPROCITY thus, the obligation is created by the will parties, not by the State (Perkins v. Benguet
 Reciprocity should not be a bar to enforcing the foreign judgment which appears not to Consolidated)
have been tainted with any of the exceptions since the presence or absence of reciprocity is
a political than a legal question. Requirements
• Stumberg – Judicial policy should be determined by reference to the desirability of S.48, R.39, Rules of Court
giving effect to foreign judgments and not by reference to a supposed foreign policy Sec. 48 – “The effect of a judgment or final order of a tribunal of a foreign country, having
against enforcing judgments obtained in other countries. jurisdiction to render the judgment or final order is as follows…
In either case the judgment or final order may be repelled by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact.”
PRIMA FACIE CHARACTER OF FOREIGN JUDGMENTS - These are the basic requirements and defenses

• Asiavest Merchant Bankers v. CA – “In this jurisdiction, a valid judgment rendered by a


• McElmoyle v. Cohen – the adjudications of the English courts have now established the foreign tribunal may be recognized insofar as the immediate parties and the underlying
rule to be that foreign judgments are prima facie evidence of the right and matter they cause of action are concerned so long as it is convincingly shown that there has been
purport to decide. an opportunity for a full and fair hearing before a court of competent jurisdiction; that
 Being prima facie, a foreign judgment may be impeached by showing lack of jurisdiction, the trial upon regular proceedings has been conducted, following due citation or
fraud, mistake or irregularity in the proceedings. voluntary appearance of the defendant and under a system of jurisprudence likely to
 Another ground for impeachment: The Disconto Gesellschaft vs. Umbreit secure an impartial administration of justice; and that there is nothing to indicate either
A foreign judgment may not be enforced if the same would be detrimental to the citizens of a prejudice in court and in the system of laws under which it is sitting or fraud in
the country where the enforcing court sits. procuring the judgment.”
But the detriment or injury contemplated must be so grave in character in order that • Salonga’s requirements – [A] foreign judgment may be recognized and enforced if it
enforcement may be validly denied. constitutes a final adjudication on a civil or commercial subject matter, including
questions of status, issued by an impartial court or agency of competent jurisdiction
RES JUDICATA AND THE POLICY OF PRECLUSION and is neither inconsistent with our fundamental principles of public policy nor tainted
• Baldwin v. Iowa State Travelling Men’s Association – “Public policy dictates that there be an with collusion or fraud
end of litigation; that those who have contested an issue shall be bound by the result of Basically, these are needed:
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
80
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• the foreign tribunal must have had jurisdiction to render the judgment o In later cases involving almost exactly the same facts, the SC held that
• there must have been an observance of the fundamental principles of due process and regardless of whether or not the domicile rule still prevailed, the foreign
fairness judgment should still be denied effect. However, the new basis was not
• the proceedings must not have been tainted with fraud, prejudice or unfairness the invalidity of assumption of jurisdiction vis-à-vis foreign law, but rather
the foreign judgment was denied because the spouses violated the
Defenses nationality principle.
Sources: jurisprudence + Rules of Court (S.48, R.39 and S.29, R.132 (how to impeach a o In other words, the foreign court’s jurisdiction was not tested, but rather
judicial record)) it became a question of violation of our substantive law.
- basically, all the means by which the foreign judgment may be repelled under S.48, R.39 o This shows the trend to not consider jurisdiction via RP law
- system of qualified recognition = the foreign judgment will only be recognized if it is not 2nd view
repelled (through the means provided for by law and jurisprudence) • Supported by the Rules of Court  S.48, R.39 + the disputable presumptions relating
to lawful exercise of JD and regularity of official acts
Jurisdiction over the Subject Matter
• Jurisdiction over the subject matter = the nature of the cause of action and of the relief • Asiavest v. CA – The Court found for the validity of the foreign judgment on proof that
sought, and this is conferred by the sovereign authority which organizes the court, and it complies with foreign law (eg: appearance of counsel in compromise, that facts and
is to be sought for in general nature of its powers, or in authority specially conferred. law must be shown in decision)
• Has to be affirmatively shown (by competent proof), and a mere recital of jurisdictional o However, these were, according to the SC, only procedural matters 
facts is not enough so, the lex fori governed
• So, a false return showing service of summons which was never made, or an o But, one issue raised was that the facts and law on which the decision
unauthorized appearance by an attorney does not confer the foreign court with were based were not given in the decision. The SC held that under
jurisdiction over the subject matter Malaysian law, this was ok. As we all know, this is a constitutional
• The main question is: by whose laws is jurisdiction measured? mandate.
• View 1: need JD in the international sense  ie: has to be valid according to the forum o Basically, the SC held that even if our Constitution is violated, as long as
state it’s ok in the foreign country, it’s ok here.  ie: judge jurisdiction via the
foreign law only
• View 2: if valid in foreign state, then valid elsewhere  but this doesn’t preclude an
inquiry into jurisdiction, etc.  US and UK rule (vs. Italy rule [no inquiries] and French • Goodrich and Scoles –
rule [need new trial on the merits]) o An oversight in the procedural law of one country, allowing the foreign
court to exercise jurisdiction, may be treated by the forum court as a
limitation on the competence of foreign court  ie: foreign substantive
law is the basis
Ma’am agrees that View 2 should be followed.
But, even if the foreign court did have
Jurisdiction over the Person
jurisdiction, the judgment may not be given
recognition/effect here if the assumption of the • Involves giving both parties reasonable notice and an opportunity to be heard  ie: due
jurisdiction was unfair. This is because process
Conflicts of Laws Rules are based on fairness. • Party attacking it has to overcome presumption of validity of foreign court’s jurisdiction
So, if it was unfair, then don’t follow it. and the presumption that the judgment is presumptive of a right b/w the parties
• Remember that the lex fori governs procedural law  and this includes service of
summons
1st view • Generally, however, the SC will only refuse recognition and enforcement if there is a
• Gorayeb v. Hashim – The failure to get jurisdiction over the person in accordance with complete lack of due process  eg: if a foreign judgment is rendered against a party, for
RP jurisprudence makes the foreign judgment invalid  here, the foreign court could an act committed there, when it is later shown that that party was never in the foreign
not pronounce a divorce decree without at least one spouse having domicile in the country and he is not given notice and has no knowledge of the proceedings, then that
foreign country judgment is void for utter lack of due process
o The basis of the SC’s ruling was Phil. jurisprudence  ie: RP law was • Otherwise, the presumption in favor of validity of the foreign judgment places the
used to test the assumption of jurisdiction of the foreign court burden upon the party attacking the lack of jurisdiction over his person to plead and
o But, this was subsequently undercut by other pronouncements of the prove the foreign law and to show that the process used was contrary to that law 
court. failure to do so means that it is presumed that the foreign court validly acquired
jurisdiction
03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
81
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• This is an exception to processual presumption  since here, the foreign law is • But, the answer to this is that it this ground, as a defense, is clearly found in our laws, so
presumed valid in the first instance and the burden shifts to another to show that it we have to follow it
wasn’t  and this burden is relieved by pleading and proving the foreign law • Another example is when the foreign court denied the right of a party to rescind the
contract based on delay
3. The action must be a judicial or quasi-judicial action • Another example is divorce obtained abroad  this is a violation of the nationality
• The body pronouncing the judgment must have been judicial or quasi-judicial  eg: principle, and thus granting the divorce is a mistake of law on the part of the foreign
SEC court
• So, a declaration by a minister of a de facto government is not conclusive on the issue
• Includes arbitration awards because: a) voluntarily submitted to by the parties; b) 8. Contrary to Public Policy
enforceable under the concept of res judicata (since they end litigations) • Some authors think that this may be a ground, but should only be used under
exceptional circumstances  since it potentially comes up in every conflicts case
4. Judgment on the Merits • Another view holds that it’s not a valid ground
• Under S.48, R.39, the foreign judgment is evidence of a right or title  so, if no right or • But there is difference between public policy as regards the nature of the proceedings
title adjudged, no occasion for recognition or enforcement to come into play and public policy as regards the nature of the claim
• So, a dismissal due to prescription or due to a demurrer doesn’t allow recognition or • “Nature of the proceedins” deals more with questions of lack of justice (ie: DP, full and
enforcement, or bar a new trial based on the original cause of action fair trial, etc.)  so, it falls under jurisdiction
• But, if the judgment is barred by the procedural law of the forum, then no recognition • “Nature of the claim“ is the ground explained here
 since lex fori governs  eg: if statute of limitations shorter in the forum, the claim is • RP courts tend to accept it as a ground for non-recognition  but, it’s mostly
barred in the forum intertwined with some law that is believed to be based on public policy  very rarely is
it used as a ground by itself  in other words, we subscribe to the view that it’s only
5. Final Judgment used under exceptional circumstance
• Final judgment = whether or not the judgment conclusively establishes the fact upon • Examples: a) obtaining a divorce abroad is contrary to our public policy regarding the
which the plaintiff rests his claim and sets the issue between the parties at rest forever sanctity of marriage  divorce obtained on grounds not found in RP divorce law; b)
• Eg: if no appeal taken, the foreign judgment is conclusive upon the parties forum shopping, and abandoning a foreign judgment when adverse = against public policy
• Provisional or interlocutory decrees will not be recognized or enforced (manifested by orderly administration of justice)
• The only time when the foreign decree was not recognized on the ground of its solely
6. Fraud being contrary to public policy (ie: not attached to a violation of the law) is when it was
• Why is it a defense? a) shows that defendant doesn’t have to comply with the obligation against the best interests of the child (to be placed in the custody of an adulterous
imposed by the judgment; b) shows that the foreign court did not have jurisdiction mom)
• Has to be extrinsic  extrinsic fraud = fraud based on facts not controverted or
resolved in the case where judgment is rendered, or that which would go to the 9. No Court available in the forum
jurisdiction of the court or would deprive the party against whom judgment is rendered • Generally, it shouldn’t be considered as precluding recognition and enforcement
a chance to defend the action to which he has a meritorious defense because no state is allowed to devise methods to deny JD to courts otherwise
• Intrinsic fraud = goes to the very existence of the cause of action is deemed already competent to hear the proceedings on recognition/enforcement
adjudged, and it, therefore, cannot militate against the recognition or enforcement of • The same applies to forum law that makes too time-consuming, expensive and complex
the foreign judgment to bring suit for recognition/enforcement  has the same effect as a statute depriving
• So, the latter precludes retrial since it’s considered to have been considered in the the forum court of JD  eg: when the law only allows recognition of a foreign judgment
foreign judgment  but the former doesn’t because it precludes a fair trial ab initio for or against a corporation when all the stockholders of a large multinational are
impleaded
7. Clear Mistake of Law • According to Stumberg, whether or not the forum should be allowed to deny
• Some authors think that this shouldn’t even be considered a ground  since there’s recognition through this method depends on the situation  so, if it’s a judgment for
nothing to show that the forum court will apply the law better than the foreign court wrongful death, it has to be enforced (since denial would amount to no enforcement
• Example of mistake = foreign court concluded that a sale made of a business only anywhere); but if it’s a judgment between corporations, then enforcement is only
affected the business’ property within the Philippines (Ingenohl v. Olsen)  but this was partially affected
reversed by the US SC  reversal is supported by Salonga, who claims that authors and
judges alike subscribe to this view, and also that it is fair and equitable  they hold that 10. Penal Judgments and Penalties
the remedy is to appeal According to Salonga, the judgment has to be on civil or commercial matters

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
82
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
• Test for penalties  whether it appears, to the tribunal which is called upon to enforce Effects of Foreign Judgment = Rule 39, Section 48, 1997 Rules of Court
it, to be, in its essential character and effect, a punishment of an offense against the The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction
public, or a grant of a civil right to a private person  in the US, this is construed as to render the judgment or final order is as follows:
referring only to fines in favor of state or judgments in favor of informers  so in a suit a. In case of a judgment or final order upon a specific thing, the judgment or final order is
by creditors against a director for a judgment, the judgment granting damages should be conclusive upon the title to the thing; and
recognized b. In case of a judgment or final order against a person, the judgment or final order is
• In other words, if a judgment is not for a penalty in favor of a state, it must be given presumptive evidence of a right as between the parties and their successors in interest by a
effect in another state subsequent title
• The rule also applies to strictly administrative proceedings
Paragraph (a) are judgments in rem =
11. Other Defenses • When the action affects personal status
• Must be for a sum certain  since the 2nd state should only be involved in enforcing or • When the action relates to, or the subject of which is property within the Philippines
recognizing the right/title, not fixing the amount thereof • When the relief demanded consists in excluding a party from any interest in property
• Appeal or writ of error on the original judgment  depends on the law of the foreign located in the Philippines
state  if the foreign judgment is stayed by the appeal or writ, then a subsequent • When the non-resident’s property has been attached in the Philippines. Rule 14, Section
action may be maintained in a 2nd state 15
• Taxes  generally not considered a defense because of: a) inherent difficulty in
enforcing; b) embarrassing to pass upon the fiscal laws of another state Effects of Judgments in rem
• The court has to be an impartial tribunal  eg: king rendering judgment over thing • Once a foreign judgment in rem is proved to be valid, the title adjudicated under such
which he has an interest  could be subsumed under the defenses of jurisdiction or foreign judgment is as good as if it had been adjudicated originally under a Philippine
fraud court
• Conclusive upon the title to the thing
Remember that the discussion on the defenses not • Thus, party can only present defenses concerning the judgment
explicitly stated in our law (S.48, R.39, Rules of Court) are
based on foreign jurisprudence. So, they should be used Paragraph (b) are judgments in personam =
here with a measure of caution.
• Where the complaint does not involve the personal status of the plaintiff or any
property in the Philippines in which defendants have or claim an interest. Rule 14,
Ma’am (and Jang) did point out that the forum court may Section 15
also refuse to recognize the a foreign judgment on the • Effect of Judgments in personam
grounds of forum non conveniens. • Presumptive evidence of a right as between the parties and their successors in interest
This is generally applied when, under the foreign law, the
by a subsequent title
judgments of the Phils. are never granted recognition and
enforcement  ie: the foreign courts will always review RP • A party can question the right granted or the judgment itself
judgments on the merits • Judgment is not conclusive
This is based on the principle of reciprocal retaliation,
adopted by the US SC in Hilton v. Guyot  that doctrine WHEN FOREIGN JUDGMENT CANNOT BE GIVEN EFFECT
was never explicitly adopted here, but Ma’am said that 1. Section 48, Rule 39 (last paragraph) = In either case, the judgment or final order may be
forum non conveniens is basically another form of refusing repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or
recognition to a foreign judgment because the foreign
court does the same automatically.
clear mistake of law or fact
- thus, both types of judgments are open to an inquiry as to the invalidity of the judgment, for
the existence of one of the many grounds specified

2. When other defenses not included in the rules of court are available. defenses under the
rules of court are not exclusive. Sources of other defenses = jurisprudence
Foreign Judgments may be Enforced or may be Presented as a Defense
Enforcement
Where the judgment is in favor of the plaintiff, he may sue upon the judgment

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
83
3C 2006 CONFLICT OF LAWS REVIEWER for ATTY. JO SABIO
Defense • Gorayeb v. Hashim - Philippine courts should have an opportunity to pass upon the
• A foreign judgment in favor of the defendant operates as a bar to a suit on the original judgment. That purpose was perfectly accomplished when the judgment was relied upon
claim in an Answer as when an original action is brought by the holder of the judgment
• Defense involves the recognition of a foreign judgment
• Perkins vs. Benguet Consolidated Mining Co. – One should not confuse the execution of a
foreign judgment with the exception of res judicata. There exists a difference between
asking for the enforcement of a foreign judgment and presenting the defense of res
judicata. Ordering the enforcement of a foreign judgment implies a direct act of
sovereignty, recognizing res judicata merely requires the intervention of a sentiment of
justice
• Res judicata is the same as recognition as to its effects
• Enforcement of Foreign Judgment = The Plaintiff must File a Separate Action or
Proceeding
• Perkins vs. Benguet Consolidated Mining Co –
o The judgment of a foreign tribunal cannot be enforced by execution in
the Philippines
o Such judgment only creates a right of action and its non-satisfaction, a
cause of action, and it is necessary that a suit be brought upon said
foreign judgment in our local courts
o Thus, in conformity with our rules, a separate action or proceeding must
be instituted in the Philippine court based on the foreign judgment
o Foreign Judgment presented as a Defense = No Action or Special
Proceeding is needed
o If the foreign judgment is presented as a defense to the claim of the
plaintiff, what is involved is the recognition of a foreign judgment. Perkins
vs. Benguet Consolidated Mining Co.
• Salonga – The party raising the foreign judgment as a defense must plead and prove the
foreign judgment in his favor.
• The foreign judgment may be raised by the defendant as a defense by including it in his
answer. No action or special proceeding need be instituted. That purpose was perfectly
accomplished when the judgment was relied upon in an Answer as when an original
action is brought by the holder of the judgment. Gorayeb vs. Hashim

Condition for Recognition or Enforcement


• Philsec Investment Corp. vs. Court of Appeals - For recognition and enforcement to
properly operate, there has to be a showing first that the grounds for its exclusion do
not exist
o Therefore, the adverse party must be given an opportunity to refute the
judgment by the grounds provided for in law or jurisprudence whether
such foreign judgment is recognized or enforced

Duty of the Court


• Philsec Investment Corp. vs. Court of Appeals - The remedy granted by the Supreme Court
was a remand of the case for the opportunity for a full dress hearing on the matter
• Hang Lung Bank v. Saulog - The Court found it necessary to remand the case in order to
determine the issue of possibility of recognition and enforcement

03-23-2006 | THROUGH THE JOINT EFFORTS OF STUDENTS OF ATENEO LAW III- C 2006 | Edited by J.C. de Veyra
84