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Insular Government vs. Frank 13 Phil 236, G.R.No.2935. March 23, 1909.

FACTS: In 1903 in the state of Illinois, Mr. Frank, a US citizen and a representative of the Insular Government of the Philippines entered into a contract whereby the former shall serve as stenographer in the Philippines for a period of 2 years. The contract contained a provision that in case of violation of its terms, Mr. Frank shall be liable for the amount incurred by the Philippine Government for his travel from Chicago to Manila and onehalf salary paid during such period. After serving for 6 months, defendant left the service and refused to make further compliance with the terms of the contract, therefore the Government sued him to recover the amount of $269.23 plus damages. The lower court ruled in favor of the plaintiff, hence the defendant appealed presenting minority as his special defense. By reason of the fact that under the laws of the Philippines, contracts made by person who did not reach majority age of 23 are unenforceable. Defendant claim that he is an adult when he left Chicago but was a minor when he arrived in Manila and at the time the plaintiff attempted to enforce the contract. ISSUE: Whether or not the contract is valid. RULING: Mr. Frank being fully qualified to enter into a contract at the place and time the contract was made, he cannot therefore plead infancy as a defense at the place where the contract is being enforced. Although Mr. Frank was still a minor under Philippine laws, he was nevertheless considered an adult under the laws of the state of Illinois,the place where the contract was made.No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined by the law of the place where the contract is made. Matters connected to its performance are regulated by the law prevailing at the place of its performance. Matters respecting a remedy, such as bringing of a suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought.

Although generally, capacity of the parties to enter into a contract is governed by national law. This is one case not involving real property which was decided by our Supreme Court, where instead of national law, what should determine capacity to enter into a contract is the lex loci celebrationis. According to Conflict of Laws writer Edgardo Paras, Franks capacity should be judged by his national law and not by the law of the place where the contract was entered into. In the instant case whether it is the place where the contract was made or Franks nationality, the result would be the same. However, as suggested by the mentioned author, for the conflicts rule in capacity in general, national law of the parties is controlling. II. CADALIN vs POEA ADMINISTRATOR 238 SCRA 721

Borrowing Statute Ex: Sec. 48, Rule on Civil Procedure if by the laws of the State or country where the cause of action arose the action is barred, it is also barred in the Philippines. Facts: Cadalin et al. are Filipino workers recruited by Asia Intl Builders Co. (AIBC), a domestic recruitment corporation, for employment in Bahrain to work for Brown & Root Intl Inc. (BRII) which is a foreign corporation with headquarters in Texas. Plaintiff instituted a class suit with the POEA for money claims arising from the unexpired portion of their employment contract which was prematurely terminated. They worked in Bahrain for BRII and they filed the suit after 1 yr. from the termination of their employment contract. As provided by Art. 156 of the Amiri Decree aka as the Labor Law of the Private Sector of Bahrain: a claim arising out of a contract of employment shall not be actionable after the lapse of 1 year from the date of the expiry of the contract, it appears that their suit has prescribed. Plaintiff contends that the prescription period should be 10 years as provided by Art. 1144 of the Civil Code as their claim arise from a violation of a contract.

The POEA Administrator holds that the 10 year period of prescription should be applied but the NLRC provides a different view asserting that Art 291 of the Labor Code of the Phils with a 3 years prescription period should be applied. The Solicitor General expressed his personal point of view that the 1 yr period provided by the Amiri Decree should be applied. Ruling: The Supreme Court held that as a general rule a foreign procedural law will not be applied in our country as we must adopt our own procedural laws. EXCEPTION: Philippines may adopt foreign procedural law under the Borrowing Statute such as Sec. 48 of the Civil Procedure Rule stating if by the laws of the State or country where the cause of action arose the action is barred, it is also barred in the Philippines. Thus, Bahrain law must be applied. However, the court contends that Bahrains law on prescription cannot be applied because the court will not enforce any foreign claim that is obnoxious to the forums public policy and the 1 yr. rule on prescription is against public policy on labor as enshrined in the Phils. Constitution. The court ruled that the prescription period applicable to the case should be Art 291 of the Labor Code of the Phils with a 3 years prescription period since the claim arose from labor employment. III. HSBC vs SHERMAN 176 SCRA 331 (1989)

Held: Philippine courts have jurisdiction over the suit. The stipulation shall be liberally construed. A stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Sec 2 (b), Rule 4 of the Rules of Court, in the absence of qualifying or restrictive words in the agreement which indicate that the place named is the only venue agreed upon by the parties. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, have jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the right of a state to exercise authority over persons and things within its boundaries subject to certain exceptions. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the state. A state is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them. IV. Carnival Cruise Lines, Inc. v. Shute

Brief Fact Summary. Appellees Eulala and Russel Shute, purchased tickets to take a cruise on a vessel owned by Appellant Carnival Cruise Lines, Inc. The tickets contained language stating that the tickets were subject to the conditions of the contract, which contained a forum selection clause. When Eulala Shute was injured on the cruise ship, Appellees sued, and the forum selection clause was challenged. Synopsis of Rule of Law. Forum selection clauses contained in form passage contracts are subject to judicial scrutiny for fundamental fairness. Facts. Appellees purchased tickets for a cruise on one of the petitioners ships from a travel agent in the state of Washington. The agent then forwarded the payment to the petitioners headquarters in Florida. On the face of each ticket was a statement indicating that the plaintiffs were subject to the conditions of the contract, which included a forum selection clause stating that all disputes shall be litigated in Florida. During the cruise, Appellee Eulala Shute fell and hurt herself. Appellees filed suit against Appellant in the Federal court in Washington. Appellants challenged the suit

Facts: Eastern Book & Supply Service (Singapore) was granted by HSBC Singapore an overdraft facility. Sherman, et. al. and directors of Eastern Book executed a Joint and Several Guarantee in favor of HSBC. Eastern Book defaulted. Hence, HSBC filed a suit for collection against them before the Regional Trial Court of Quezon City. Sherman filed a Motion to Dismiss on the ground of lack of jurisdiction over the complaint and persons of the defendants. The guarantee provides: This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore.

on the ground that the forum selection clause forbids litigation in any venue except Florida. Issue. Is the forum selection clause valid and enforceable? Held. Yes. A forum selection clause is to be examined for fundamental fairness. Here, Appellant did not arbitrarily set Florida as a forum to discourage suits against it. Appellant has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports. Further, there is no evidence that Appellant procured Appellees accession to the forum selection clause by fraud or overreaching. Appellees were made aware of the clause and accepted the contract. Hence, the forum selection clause is valid. Dissent. Appellees could not have read the forum selection clause before they received the tickets they purchased. However, once they received the tickets, they were nonrefundable. Hence, Appellees had to agree to the forum selection clause or not travel. Further, contract provisions that limit the place or court in which an action may be brought are invalid as against public policy. Discussion. Forum selection clauses must be scrutinized for fundamental fairness but are generally valid. V. BELLIS v. BELLIS (20 SCRA 358)

Naturally, the illegitimate children, Maria Cristina and Merriam Palma, opposed the wills on the ground that they were deprived of their legitime as illegitimate children. Under Philippine law, they are entitled to inherit even if they are illegitimate children. They claim that Philippine law should be applied. ISSUE: What law should be applied, the Philippine law or the Texas law? May the illegitimate daughters inherit? HELD: What applies is the Texas law. Mr. Bellis is a national and domicile of Texas at the time of his death. Hence, both the intrinsic validity of the will (substance or successional rights) and the extrinsic validity (forms of the will) are governed by Texas law. Since under Texas law, the decedent may dispose of his property as he wishes, the Will should be respected. The illegitimate daughters are not entitled to any legitime. Assuming that Texas law is in conflict of law rule providing that the domiciliary system (law of domicile) should govern, the same should not result in a reference back (renvoi) to the Philippine law since Mr. Bellis was both a national and domicile of Texas at the time of his death. Nonetheless, if Texas law has a conflict rule, renvoi would not arise, since the properties covered by the second will are found in the Philippines. The renvoi doctrine applied in the case of Aznar v. Garcia cannot be applied since said doctrine is pertinent where the decedent is a national of one country and domiciliary of another country. Moreover, it has been pointed out that the decedent executed two (2) wills- one to govern his Texas properties and the other his Philippine estate; the latter being the basis of the argument of illegitimate children that he intended Philippine law to govern. Assuming that such was the intention of the decedent in executing a separate Philippine will, it would not alter the law. As rule in Miciano v. Brimo, a provision of foreigners will to the effect that his properties shall be distributed in accordance with Philippine law and not with the national law, is illegal and void, for his national law cannot be ignored.

FACTS: Mr. Bellis was a citizen and resident of Texas at the time of his death. He had five (5) legitimate children with his first wife, Mary Mallen, whom he divorced. He had three (3) legitimate daughters with his second wife, Violet, who survived him, and another three (3) illegitimate children with another woman. Before he died, he executed two (2) wills, disposing of his Texas properties, the other disposing his Philippine properties. In both wills, he recognized his illegitimate children but they were not given anything. Under Texas law, there are no compulsory heirs or legitime reserved to illegitimate children.



Category: Civil Law Jurisprudence Facts: Edward S. Christensen, though born in New York, migrated to California where he resided and consequently was considered a California Citizen for a period of nine years to 1913. He came to the Philippines where he became a domiciliary until the time of his death. However, during the entire period of his residence in this country, he had always considered himself as a citizen of California. In his will, executed on March 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy Christensen as his only heir but left a legacy of some money in favor of Helen Christensen Garcia who, in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Counsel of Helen claims that under Art. 16 (2) of the civil code, California law should be applied, the matter is returned back to the law of domicile, that Philippine law is ultimately applicable, that the share of Helen must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of the deceased must apply, our courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator should dispose any property possessed by him in absolute dominion. Issue: Whether Philippine Law or California Law should apply. Held: The Supreme Court deciding to grant more successional rights to Helen Christensen Garcia said in effect that there be two rules in California on the matter. 1. The conflict rule which should apply to Californians outside the California, and 2. The internal Law which should apply to California domiciles in California.

The California conflict rule, found on Art. 946 of the California Civil code States that if there is no law to the contrary in the place where personal property is situated, it is deemed to follow the decree of its owner and is governed by the law of the domicile. Christensen being domiciled outside California, the law of his domicile, the Philippines is ought to be followed. Wherefore, the decision appealed is reversed and case is remanded to the lower court with instructions that partition be made as that of the Philippine law provides.