Commercial Law Reviewer Ateneo

Political Law (Constitutional Law) Article I

Civil Law Conflict of Laws
CONFLICTS OF LAWS; Definition:
1.

That part of the law of each state or nation which determines whether, in
dealing with a legal situation, the law or some other state or nation will be
recognized, given effect, or applied (16 Am Jur, 2d, Conflict of Laws, 1).
2. That part of municipal law of a state which directs its courts and
administrative agencies, when confronted with a legal problem involving a
foreign element, whether or not they should apply a foreign law/s (Paras).
DISTINGUISHED FROM PUBLIC INTERNATIONAL LAW
BASIS

CONFLICT OF LAW

LAW OF NATIONS

Nature

Municipal in
character

International in character

Persons
involved

Dealt with by private

individuals; governs
individuals in their
private transactions
which involve a
foreign element

Sovereign states and other entities

possessing international
personality, e.g., UN; governs
states in their relationships
amongst themselves

Transactions
involved

Private transactions
between private
individuals

Generally affected by public

interest; those in general are of
interest only to sovereign states

Resort to municipal
tribunals

May be peaceful or forcible

Peaceful: includes diplomatic
negotiation, tender & exercise of
good offices, mediation, inquiry &
conciliation, arbitration, judicial
settlement by ICJ, reference to
regional agencies
Forcible: includes severance of
diplomatic relations, retorsions,
reprisals, embargo, boycott, nonintercourse, pacific blockades,
collective measures under the UN
Charter, and war.

Remedies
and
Sanctions

SOURCES:
Direct:
1. Constitutions

2. Codifications
1.
2.
3.
4.

Special Laws
Treaties and Conventions
Judicial Decisions
International Customs

Indirect:
1.

Natural moral law

1. Work of writers
TERMS:
Lex Domicilii law of the domicile; in conflicts, the law of ones domicile applied in
the choice of law questions
Lex Fori law of the forum; that is, the positive law of the state, country or
jurisdiction of whose judicial system of the court where the suit is brought or
remedy is sought is an integral part. Substantive rights are determined by the law
where the action arose (lex loci) while the procedural rights are governed by the
law of the place of the forum (lex fori)
Lex Loci law of the place
Lex Loci Contractus the law of the place where the contract was made or law of
the place where the contract is to be governed (place of performance) which may or
may not be the same as that of the place where it was made
Lex Loci Rei Sitae law of the place where the thing or subject matter is
situated; the title to realty or question of real estate law can be affected only by the
law of the place where it is situated
Lex Situs law of the place where property is situated; the general rule is that
lands and other immovables are governed by the law of the state where they are
situated
Lex Loci Actus law of the place where the act was done
Lex Loci Celebrationis law of the place where the contract is made
Lex Loci Solutionis law of the place of solution; the law of the place where
payment or performance of a contract is to be made
Lex Loci Delicti Commissi law of the place where the crime took place
Lex Mereatoria law merchant; commercial law; that system of laws which is
adopted by all commercial nations and constitute as part of the law of the land;
part of common law
Lex Non Scripta the unwritten common law, which includes general and
particular customs and particular local laws
Lex Patriae national law
Renvoi Doctrine doctrine whereby a jural matter is presented which the conflict
of laws rules of the forum refer to a foreign law which in turn, refers the matter
back to the law of the forum or a third state. When reference is made back to the
law of the forum, this is said to be remission while reference to a third state is
called transmission.

Nationality Theory by virtue of which the status and capacity of an individual

are generally governed by the law of his nationality. This is principally adopted in
the RP
Domiciliary Theory in general, the status, condition, rights, obligations, &
capacity of a person should be governed by the law of his domicile.
Long Arm Statutes Statutes allowing the courts to exercise jurisdiction when
there are minimum contacts between the non-resident defendant and the forum.
WAYS OF DEALING WITH A CONFLICTS PROBLEM:
1. Dismiss the case for lack of jurisdiction, or on the ground of forum nonconveniens
DOCTRINE OF FORUM NON CONVENIENS the forum is inconvenient; the ends
of justice would be best served by trial in another forum; the controversy may be
more suitably tried elsewhere
1. Assume jurisdiction and apply either the law of the forum or of another state
1.
i.
A specific law of the forum decrees that internal law
should apply
1. APPLY INTERNAL LAW forum law should be applied whenever there is
good reason to do so; there is a good reason when any one of the following
factors is present:
Examples:

Article. 16 of the Civil Code real and personal property subject to the law of
the country where they are situated and testamentary succession governed
by lex nationalii

Article 829 of the Civil Code makes revocation done outside Philippines
valid according to law of the place where will was made or lex domicilii

Article 819 of the Civil Code prohibits Filipinos from making joint wills even
if valid in foreign country
1. ii. The proper foreign law was not properly pleaded and proved
NOTICE AND PROOF OF FOREIGN LAW

As a general rule, courts do not take judicial notice of foreign laws; Foreign
laws must be pleaded and proved

Effect of failure to plead and prove foreign law (3 alternatives) of the forum
court:
(a) Dismiss the case for inability to establish cause of action
(b) Assume that the foreign law of the same as the law of the forum
(c) Apply the law of the forum
1.

The case falls under any of the exceptions to the application of

foreign law
Exceptions to application of foreign law:
(a) The foreign law is contrary to the public policy of the forum
(b) The foreign law is procedural in nature

(c) The case involves issues related to property, real or personal (lex situs)
(d) The issue involved in the enforcement of foreign claim is fiscal or administrative
(e) The foreign law or judgment is contrary to good morals (contra bonos mores)
(f)

The foreign law is penal in character

(g) When application of the foreign law may work undeniable injustice to the
citizens of the forum
(h) When application of the foreign law might endanger the vital interest of the
state
2. APPLY FOREIGN LAW when properly pleaded and proved
THEORIES WHY FOREIGN LAW SHOULD BE GIVEN EFFECT
1. Theory of Comity foreign law is applied because of its convenience &
because we want to giveprotection to our citizens, residents, & transients in
our land
2. Theory of Vested Rights we seek to enforce not foreign law itself but the
rights that have been vested under such foreign law; an act done in another
state may give rise to the existence of a right if the laws of that state crated
such right.
3. Theory of Local Law adherents of this school of thought believe that we
apply foreign law not because it is foreign, but because our laws, by applying
similar rules, require us to do so; hence, it is as if the foreign law has become
part & parcel of our local law
4. Theory of Harmony of Laws theorists here insist that in many cases we
have to apply the foreign laws so that wherever a case is decided, that is,
irrespective of the forum, the solution should be approximately the same;
thus, identical or similar solutions anywhere & everywhere. When the goal is
realized, there will be harmony of laws
5. Theory of Justice the purpose of all laws, including Conflict of Laws, is the
dispensing of justice; if this can be attained in may cases applying the proper
foreign law, we must do so
Rules on Status in General
Factual Situation

Point of Contact

Beginning of personality of
natural person

National law of the child (Article 15, CC)

Ways & effects of

emancipation

Same

Age of majority

Same

Use of names and

surnames

Same

Use of titles of nobility

Same

Absence

Same

Presumptive death &

survivorship

Lex fori (Article 43, 390, 391, CC; Rule 131 5

[jj], Rules of Court)

Rules on Marriage as a Contract

FACTUAL SITUATION

Celebrated
Abroad

POINT OF CONTACT

Between Filipinos

Lex loci celebrationis is without

prejudice to the exceptions under
Articles 25, 35 (1, 4, 5 & 6), 36, 37
& 38 of the Family Code (bigamous &
incestuous marriages) & consular
marriages

Between Foreigners

Lex loci celebrationis EXCEPT if the

marriage is:
1. Highly immoral (like
bigamous/ polygamous
marriages)
2. Universally considered
incestuous (between brothersister, and ascendantsdescendants)

Mixed

Apply 1 (b) to uphold validity of

marriage

Between Foreigners

National law (Article 21, FC)

PROVIDED the marriage is not highly
immoral or universally considered
incestuous)

Mixed

National law of Filipino (otherwise

Celebrated
in RP

public policy may be militated

against)
Marriage by proxy (NOTE:
a marriage by proxy is
considered celebrated
where the proxy appears

Lex loci celebrationis (with prejudice

to the foregoing rules)

Rules on Marriage as a Status

FACTUAL SITUATION

POINT OF CONTACT

Personal rights & obligations

between husband & wife

National of husband(Note: Effect of

subsequent change of nationality:
1. If both will have a new
nationality the new one
2. If only one will change the
last common nationality
3. If no common nationality
nationality of husband at the
time of wedding)

Property relations bet husband &

wife

National law of husband without

prejudice to what the CC provides
concerning REAL property located in
the RP (Article 80) (NOTE: Change
of nationality has NO EFFECT. This is
the DOCTRINE OF IMMUTABILITY
IN THE MATRIMONIAL PROPERTY
REGIME)

Rules on Property
FACTUAL SITUATION

POINT OF CONTACT

Real property

Lex rei sitae (Article 16, CC)

Exception
s

Successional rights

National law of decedent (Article 16

par. 2, CC)

Capacity to succeed

National law of decedent (Article.

1039)

Contracts involving real

property which do not
deal with the title thereto

The law intended will be the proper

law of the contract (lex loci
voluntantis orlex loci intentionis)

Contracts where the real

property is given as

The principal contract (usually loan)

is governed by the proper law oft

security

the contract (lex loci

voluntatis or lex loci
intentionis)NOTE: the mortgage
itself is governed by lex rei sitae.
There is a possibility that the
principal contract is valid but the
mortgage is void; or it may be the
other way around. If the principal
contract is void, the mortgage will
also be void (for lack of proper
cause or consideration), although by
itself, the mortgage could have been
valid.

Tangible personal property (choses in possession)

1

In General

Lex rei sitae (Article. 16, CC)

Exceptions: same as
those for real property

EXCEPTION: same as those for real

property EXCEPT that in the
example concerning mortgage, the
same must be changed to pledge of
personal property)

Means of Transportation

Vessels

Law of the flag (or in some cases,

place of registry)

Other means

Law of the depot (storage place for

supplies or resting place)

Things in transitu (these

things have a changing
status because they
move)
Loss, destruction,
deterioration

Law of the destination (Article.

1753, CC)

Validity & effect of the

seizure of the goods

Locus regit actum (where seized)

because said place is their
temporarysitus

Disposition or alienage of
the goods

Lex loci volutantis or lex loci

intentionis because here there is a

contract

FACTUAL SITUATION

POINT OF CONTACT

INTangIBLE PERSONAL
PROPERTY (CHOSES IN
ACTION)
1

Recovery of debts or
involuntary assignment of
debts (garnishment)

Where debtor may be effectively served with

summons (usually the domicile)

Voluntary assignment of
debts

Lex loci voluntatis or lex loci

intentionis(proper law of the contract)

Other
1.
2.
3.
4.
3

Theories:
National law of the debtor or creditor
Domicile of the debtor or creditor
Lex loci celebrationis
Lex loci solutionis

Taxation of debts

Domicile of creditor

Administration of debts

Lex situs of assets of the debtor (for these

assets can be held liable for the debts)

Negotiability or nonnegotiability of an
instrument

The right embodied in the instrument (for

example, in the case of a Swedish bill of
exchange, Swedish law determines its
negotiability)

Validity of transfer,
delivery or negotiation of
the instrument

In general, situs of the instrument at the

time of transfer, delivery or negotiation

Effect on a corporation of
the sale of corporate
shares

Law of the place incorporation

Effect between the parties

of the sale of corporate

Lex loci voluntatis or lex loci intentionis

(proper law of the contract) for this is

shares

really a contract; usually this is the place

where the certificate is delivered)

Taxation on the dividends

of corporate shares

Law of the place of incorporation

1
0

Taxation on the income

from the sale of corporate
shares

Law of the place where the sale was

consummated

Franchises

Law of the place that granted them

Goodwill of the business &

taxation thereto

Law of the place where the business is

carried on

Patents, copyrights,
trademarks, trade names

In the absence of a treaty, they are protected

only by the state that granted themNOTE:
foreigners may sue for infringement of
trademarks and trade names in the RP ONLY
IF Filipinos are granted reciprocal
concessions in the state of the foreigners

1
1

1
2

1
3

Wills, Succession & Administration of Conflict Rules

FACTUAL SITUATION

POINT OF CONTACT

Extrinsic Validity of Wills

1

Made by an alien abroad

Lex nationalii OR lex domicilii OR RP law

(Article 816, CC), OR lex loci
celebrationis(Article 17(1))

Made by a Filipino abroad

Lex nationalii OR lex loci celebrationis(Article

815)

Made by an alien in the RP

Lex nationalii OR lex loci celebrationis(Article

817)

FACTUAL SITUATION

POINT OF CONTACT

Extrinsic Validity of Joint Wills

(made in the same instrument)
1

Made by Filipinos abroad

Lex nationalii (void, even if valid where made)

(Article 819)

Made by aliens abroad

Valid if valid according to lex domicilii orlex

loci celebrationis (Article 819)

Made by aliens in the RP

Lex loci celebrationis therefore void even if

apparently allowed by Article 817 because the
prohibition on joint wills is a clear expression
of public policy

Intrinsic Validity of Wills

Lex nationalii of the deceased regardless of

the LOCATION & NATURE of the property
(Article 16 (2))

Capacity to Succeed

Lex nationalii of the deceased not of the heir

(Article 1039)

Revocation of Wills
1

If done in the RP

Lex loci actus (of the revocation) (Article.

829)

If done OUTSIDE the RP

1.

By a NONDOMICILIARY

Lex loci celebrationis (of the making of the

will, NOT revocation), OR lex domicilii(Article
829)

1.

By a DOMICILIARY
of the RP

Lex domicilii (RP law) OR lex loci actus (of the

revocation) (Article 17)

Probate of Wills Made Abroad

1

If not yet probated abroad

If already probated abroad

Lex fori of the RP applies as to the procedural

aspects, i.e., the will must be fully probated
here & due execution must be shown
Lex fori of the RP again applies as to the
procedural aspects; must also be probated
here, but instead of proving due execution,

generally it is enough to ask for the

enforcement here of the foreign judgment on
the probate abroad
Executors and Administrators
1

Where appointed

Place where domiciled at death or incase of

non-domiciliary, where assets are found

Powers

Co-extensive with the qualifying of the

appointing court powers may only be
exercised within the territorial jurisdiction of
the court concernedNOTE: these rules also
apply to principal, domiciliary, or ancillary
administrators & receivers even in nonsuccessive cases

Rules on Obligation and Contracts

FACTUAL SITUATION
Formal or Extrinsic Validity

POINT OF CONTACT
Lex loci celebrationis (Article 17 {1})

Exceptions
1.

1.

Alienation &
encumbrance of
property
Consular contracts

Capacity of Contracting
Parties

Lex situs (Article 16 [1])

Law of the RP (if made in RP consulates)
National law (Article 15) without prejudice to
the case of Insular Government v Frank 13 P
236, where the SC adhered to the theory of lex
loci celebrationis

Exception
Alienation & encumbrance
of property
Intrinsic validity (including
interpretation of the
instruments, and amt. of
damages for breach)
Other Theories are:

Lex situs (Article 16 {1})

Proper law of the contract lex contractus(in
the broad sense), meaning the lex
voluntatis or lex loci intentionis

1.
2.
3.
4.
5.
6.
7.

Lex loci celebrationis (defect: this makes possible the evasion of the
national law)
Lex nationalii (defect: this may impede commercial transactions)
Lex loci solutionis (law of the place of performance) (defect: there may be
several places of performance
Prof Minors solution:
Perfection lex loci celebrationis
Cause or consideration lex loci considerations
Performance lex loci solutionis (defect: this theory combines the defect
of the others)

Rules on Torts
FACTUAL SITUATION

POINT OF CONTACT

Liability & damages for torts

in generalNOTE: The locus
delicti (place of commission
of torts) is faced by the
problem of
characterization. In civil
law countries, the locus
delicti is generally where
the act began; in common
law countries, it is where
the act first became
effective

Lex loci delicti (law of the place where the delict

was committed)NOTE: liability for foreign torts
may be enforced in the RP if:
1. The tort is not penal in character
2. If the enforcement of the tortious liability
wont contravene our public policy
3. If our judicial machinery is adequate for
such enforcement

Rules on Crimes
FACTUAL SITUATION
Essential elements of a crime
and penalties

POINT OF CONTACT
Generally where committed (locus regit
actum)

Theories as to what court has jurisdiction:

1. Territoriality theory where the crime was committed
2. Nationality theory country which the criminal is citizen or a subject
3. Real theory any state whose penal code has been violated has
jurisdiction, where the crime was committed inside or outside its territory
4. Protective theory any state whose national interests may be jeopardized
has jurisdiction so that it may protect itself
5. Cosmopolitan or universality theory state where the criminal is found or
which has his custody has jurisdiction
6. Passive personality theory the state of which the victim is a citizen or
subject has jurisdiction
NOTE: In the RP, we follow the territoriality theory in general; exception: Article
2, RPC, stresses the protective theory

The locus delicti of certain

crimes

Frustrated an
consummated, homicide,
murder, infanticide &
parricide

Where the victim was injured (not where the

aggressor wielded his weapon)

Attempted homicide, etc.

Where the intended victim was (not where

the aggressor was situated) so long as the
weapon or the bullet either touched him or
fell inside the territory where he was

Bigamy

Where the illegal marriage was performed

Theft & robbery

Where the property was unlawfully taken

from the victim (not the place to which the
criminal went after the commission of the
crime)

Estafa or swindling thru

false representation

Where the object of the crime was received

(not where the false representations were
made)

Conspiracy to commit
treason, rebellion, or
seditionNOTE: Other
conspiracies are NOT
penalized by our laws

Where the conspiracy was formed (not where

the overt act of treason, rebellion or sedition
was committed)

Libel

Where published or circulated

Continuing crime

Any place where the offense begins, exists or

continues

Complex crime

Any place where any of the essential

elements of the crime took place

Rules on Juridical Persons

FACTUAL SITUATION
Corporations

POINT OF CONTACT

Powers and liabilities

General rule: the law of the place of

incorporationEXCEPTIONS:
1. For constitutional purposes even of
the corporation was incorporated in the
RP, it is nor deemed a Filipino corporation
& therefore cant acquire land, exploit
our natural resources, 7 operate public
utilities unless 60% of capital if Filipino
owned
2. For wartime purposes we pierce the
corporation veil & go to the nationality of
the controlling stockholders to determine
if the corporation is an enemy (CONTROL
TEST)

Formation of the
corporation (requisites);
kind of stocks, transfer of
stocks to bind the
corporation, issuance,
amount & legality &
dividends, powers &
duties of members,
stockholders and officers

Law of the place of incorporation

Validity of corporate acts

& contracts
(including ultra vires acts)

Law of the place of incorporation & law of the

place of performance (the act or contract must
be authorized by BOTH laws)

Right to sue & amenability

to court processes & suits
against it

Lex fori

Manner & effect of

dissolution

Law of the place of incorporation provided that

the public policy of the forum is not militated
against

Domicile

If not fixed by the law creating or recognizing

the corporation or by any other provision the
domicile is where it is legal representation is
established or where it exercises its principal
functions (Article. 15)

Receivers (appointment &

powers)

Principal receiver is appointed by the courts of

the state of incorporation; ancillary receivers,
by the courts of any state where the
corporation has assets (authority is CO-

EXTENSIVE) w/ the authority of the appointing

court
NOTE: Theories on the personal and/or governing law of corporations:
1. Law of the place of incorporation (this is generally the RP rule)
2. Law of the place or center of management (center for administration or
siege social) (center office principle)
3. Law of the place of exploitation (exploitation centre or siege d
exploitation)
Partnerships
The existence or nonexistence of legal
personality of the firm;
the capacity to contract;
liability of the firm & the
partners to 3rd persons

The personal law of the partnership, i.e., the

law of the place where it was created (Article
15 of the Code of Commerce) (Subject to the
exceptions given above as in the case of
corps.)

Creation of branches in
the RP; validity & effect of
the branches commercial
transaction; & the
jurisdiction of the court

RP law (law of the place where branches were

created) (Article 15, Code of Commerce)

Dissolution, winding up, &

termination of branches in
the RP

RP law (Article 15, Code of Commerce)

Domicile

If not fixed by the law creating or recognizing

the partnership or by any other provision the
domicile is where it is legal representation is
established or where it exercises its principal
functions (Article. 15)

Receivers

RP law insofar as the assets in the RP are

concerned can be exercised as such only in
the RP

Foundations (combination of
capital independent of
individuals, usually not for
profit)

Personal law of the foundation (place of

principal center of administration)