In the situation, said transaction was negotiated in England, although

executed in Pennsylvania. It is to be noted that in a sale of a tangible

personal property, lex loci celebrationis applies. According to Article 17
of the Civil Code, the forms and solemnities of contracts, wills, and
other public instruments shall be governed by the laws of the country in
which they are executed. Hence, laws in Pennsylvania will prevail, so
the transaction will be considered as a mortgage.
Rules on obligations and contracts.
Lex rei sitae, Lex situs accdg to special contracts
Intrinsic validity of contracts
It should be noted that while the first paragraph of art.17 speaks of forms and
solemnities, no mention is made of the law that should govern the intrinsic validity of
contracts in general. The prevailing rule in private international law today is to consider
the lex loci voluntatis (the law of the place voluntarily selected) or the lex loci intentionis
(the law of the place intended by the parties to the contract).

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Lex rei sitae
a.

Pledge, Chattel mortgage, antichresis lex situs.

b.

Loan granted by a private individual or where subject matter of loan is

personal law where the loan was obtained.

The suit should be brought to the country of origin lex situs of the
products mentioned, thus the Philippines will take hold of the case.
According to the law on sales, the object should be able to conform to
the specifications requested by the buyer, as a form of warranty as to
Merchantable Quality and Fitness of Goods. For the determination on
whether or not there is an agreement as to disputed specifics, the e-

commerce law could be utilized, . For the remedy, the buyer can opt to
a. Philippine e-commerce law
b. Rules on electronic evidence
Remedy based on sales

3.
It is to be considered that the treatment of the two is different. In
a pledge, lex situs applies while for a loan granted by a private
individual, the law where the loan was obtained shall be utilized. Pledge
h

A loan was secured with a pledge of the shares, but the pledge could not
be considered as such, for it must be placed in the possession of the
creditor before it will be valid.
loan is valid, although pledging is not, since the delivery is missing

Julian acted in bad faith

The execution of the act will be valid

accessory obligation of pledge condoned; presumption only,

rebuttable

that the thing pledged be placed in the possession of the creditor,

or of a third person by common agreement. (2093)

c.

Agreement on pledge or mortgage but with instrument on sale

If two parties agree upon the mortgage or pledge of real or
personal property, but the instrument states that the property is
sold absolutely or with a right of repurchase, reformation of the

instrument is proper.

f condition not performed, party whose obligation is subject to

the condition may refuse to proceed withthecontractORmaywaive
performance of the condition. Example of condition on
performance of obligation: obligation of the buyer to pay the
balanceofthepurchasepricemade subjecttotheconditionthatthe
seller first deliver the reconstituted title of the house and lot
(Laforteza v. Machuca, 2000)
If seller has promised that the condition should happen or be
performed, the buyer may treat the nonperformance of the
condition as a breach of warranty. (Art.1545)

Implied warranty as to Merchantable Quality and Fitness of

Goods

Merchantable Quality:1) Where the goods are brought by

description from a seller who deals in goods of that description
(Art.1562(2))