G.R. No.

L-18164 January 23, 1967

WILLIAM F. GEMPERLE, plaintiff-appellant,

vs.
HELEN SCHENKER and PAUL SCHENKER as her husband, defendants-appellees.

Gamboa & Gamboa for plaintiff-appellant.

A. R. Narvasa for defendants-appellees.

CONCEPCION, C. J.:

Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of Rizal
dismissing this case for lack of jurisdiction over the person of defendant Paul Schenker and for want of
cause of action against his wife and co-defendant, Helen Schenker said Paul Schenker "being in no
position to be joined with her as party defendant, because he is beyond the reach of the magistracy of the
Philippine courts."

The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker — acting
through his wife and attorney-in-fact, Helen Schenker — herein-after referred to as Mrs. Schenker — filed
with the Court of First Instance of Rizal, a complaint — which was docketed as Civil Case No. Q-2796
thereof — against herein plaintiff William F. Gemperle, for the enforcement of Schenker's allegedly initial
subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his alleged
pre-emptive rights to the then unissued original capital stock of said corporation and the increase thereof,
as well as for an accounting and damages. Alleging that, in connection with said complaint, Mrs. Schenker
had caused to be published some allegations thereof and other matters, which were impertinent, irrelevant
and immaterial to said case No. Q-2796, aside from being false and derogatory to the reputation, good
name and credit of Gemperle, "with the only purpose of attacking" his" honesty, integrity and reputation"
and of bringing him "into public hatred, discredit, disrepute and contempt as a man and a businessman",
Gemperle commenced the present action against the Schenkers for the recovery of P300,000 as damages,
P30,000 as attorney's fees, and costs, in addition to praying for a judgment ordering Mrs. Schenker "to
retract in writing the said defamatory expressions". In due course, thereafter, the lower court, rendered the
decision above referred to. A reconsiderating thereof having been denied, Gemperle interposed the present
appeal.

The first question for determination therein is whether or not the lower court had acquired jurisdiction over
the person of Schenker. Admittedly, he, a Swiss citizen, residing in Zurich, Switzerland, has not been
actually served with summons in the Philippines, although the summons address to him and Mrs. Schenker
had been served personally upon her in the Philippines. It is urged by plaintiff that jurisdiction over the
person of Schenker has been secured through voluntary appearance on his part, he not having made a
special appearance to assail the jurisdiction over his person, and an answer having been filed in this case,
stating that "the defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is
allegedly a general appearance amounting to a submission to the jurisdiction of the court, confirmed,
according to plaintiff, by a P225,000 counterclaim for damages set up in said answer; but this counterclaim
was set up by Mrs. Schenker alone, not including her husband. Moreover, said answer contained several
affirmative defenses, one of which was lack of jurisdiction over the person of Schenker, thus negating the
alleged waiver of this defense. Nevertheless, We hold that the lower court had acquired jurisdiction over
said defendant, through service of the summons addressed to him upon Mrs. Schenker, it appearing from
said answer that she is the representative and attorney-in-fact of her husband aforementioned civil case
No. Q-2796, which apparently was filed at her behest, in her aforementioned representative capacity. In
other words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so that
she was, also, empowered to represent him in suits filed against him, particularly in a case, like the of the
one at bar, which is consequence of the action brought by her on his behalf.

Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon the alleged
lack of jurisdiction over the person of Schenker, which cannot be sustained, it follows that the conclusion
drawn therefore from is, likewise, untenable.

Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded to the lower
court for proceedings, with the costs of this instance defendants-appellees. It is so ordered.
Pennoyer v. Neff, 95 U.S. 714 (1878

Facts
Mitchell sued Neff for legal fees that Neff allegedly owed to him. The action was brought in Oregon, where Neff owned
real property but was not a resident. After Neff was served by publication notice, he failed to respond, and Mitchell
ultimately received a default judgment. Neff's land was sold at a sheriff's sale to satisfy the judgment, and Pennoyer
bought it. Neff later sued in Oregon court to recover the property, once he found out about the sale, and he argued
that the sale was improper because the court that issued the judgment against him did not have personal jurisdiction
over him. This would have prevented it from adjudicating the personal rights between the two parties.

People or property outside the boundaries of a state may not be subject to its direct jurisdiction, and substituted
service of process in actions against non-residents may be permitted only for in rem actions. There could be no
judgment regarding the personal rights of the parties without personal jurisdiction, so the sale was void. However, the
sale would have been valid if the plaintiff had attached the real property in the state when the action was brought,
which would have conferred in rem jurisdiction.

Syllabus

1. A statute of Oregon, after providing for service of summons upon parties or their representatives, personally or at
their residence, declares that, when service cannot be thus made, and the defendant, after due diligence, cannot be
found within the State, and

"that fact appears, by affidavit, to the satisfaction of the court or judge thereof, and it, in like manner, appears that a
cause of action exists against the defendant, or that he is a proper party to an action relating to real property in the
State, such court or judge may grant an order that the service be made by publication of summons . . . when the
defendant is not a resident of the State, but has property therein, and the court has jurisdiction of the subject of the
action,"

-- the order to designate a newspaper of the county where the action is commenced in which the publication shall be
made -- and that proof of such publication shall be "the affidavit of the printer, or his foreman, or his principal clerk."

Held, that defects in the affidavit for the order can only be taken advantage of on appeal, or by some other direct
proceeding, and cannot be urged to impeach the judgment collaterally, and that the provision as to proof of the
publication is satisfied when the affidavit is made by the editor of the paper.

2. A personal judgment is without any validity if it be rendered by a State court in an action upon a money demand
against a nonresident of the State who was served by a publication of summons, but upon whom no personal service
of process within the State was made, and who did not appear; and no title to property passes by a sale under an
execution issued upon such a judgment.

3. The State, having within her territory property of a nonresident, may hold and appropriate it to satisfy the claims of
her citizens against him, and her tribunals may inquire into his obligations to the extent necessary to control the
disposition of that property. If he has no property in the State, there is nothing upon which her tribunals can adjudicate.

4. Substituted service by publication, or in any other authorized form, is sufficient to inform a nonresident of the object
of proceedings taken where

Page 95 U. S. 715

property is once brought under the control of the court by seizure or some equivalent act, but where the suit is brought
to determine his personal rights and obligations, that is, where it is merely in personam, such service upon him is
ineffectual for any purpose.

5. Process from the tribunals of one State cannot run into another State and summon a party there domiciled to
respond to proceedings against him, and publication of process or of notice within the State in which the tribunal sits
cannot create any greater obligation upon him to appear. Process sent to him out of the State, and process published
within it, are equally unavailing in proceedings to establish his personal liability.

6. Except in cases affecting the personal status of the plaintiff, and in those wherein that mode of service may be
considered to have been assented to in advance, the substituted service of process by publication allowed by the law
of Oregon and by similar laws in other States where actions are brought against nonresidents is effectual only where,
in connection with process against the person for commencing the action, property in the State is brought under the
control of the court and subjected to its disposition by process adapted to that purpose, or where the judgment is
sought as a means of reaching such property or affecting some interest therein; in other words, where the action is in
the nature of a proceeding in rem.

7. Whilst the courts of the United States are not foreign tribunals in their relations to the State courts, they are tribunals
of a different sovereignty, and are bound to give a judgment of a State court only the same faith and credit to which it
is entitled in the courts of another State.

8. The term "due process of law," when applied to judicial proceedings, means a course of legal proceedings
according to those rules and principles which have been established by our jurisprudence for the protection and
enforcement of private rights. To give such proceedings any validity, there must be a competent tribunal to pass upon
their subject matter, and if that involves merely a determination of the personal liability of the defendant, he must be
brought within its jurisdiction by service of process within the State, or by his voluntary appearance.

This action was brought by Neff against Pennoyer for the recovery of a tract of land situated in Multnomah County,
Oregon. Pennoyer, in his answer, denied Neff's title and right to possession, and set up a title in himself.

By consent of parties, and in pursuance of their written stipulation filed in the case, the cause was tried by the court,
and a special verdict given, upon which judgment was rendered in favor of Neff; whereupon Pennoyer sued out this
writ of error.

The parties respectively claimed title as follows: Neff under a patent issued to him by the United States, March 19,

Page 95 U. S. 716

1866; and Pennoyer by virtue of a sale made by the sheriff of said county, under an execution sued out upon a
judgment against Neff, rendered Feb. 19, 1866, by the Circuit Court for said county, in an action wherein he was
defendant and J. H. Mitchell was plaintiff. Neff was then a nonresident of Oregon.

In Mitchell v. Neff, jurisdiction of Neff was obtained by service of summons by publication. Pennoyer offered in
evidence duly certified copies of the complaint, summons, order for publication of summons, affidavit of service by
publication, and the judgment in that case, to the introduction of which papers the plaintiff objected because, 1, said
judgment is in personam, and appears to have been given without the appearance of the defendant in the action or
personal service of the summons upon him, and while he was a nonresident of the State, and is, therefore, void; 2,
said judgment is not in rem, and therefore constitutes no basis of title in the defendant; 3, said copies of complaint,
&c., do not show jurisdiction to give the judgment alleged, either in rem or personam; and, 4, it appears from said
papers that no proof of service by publication was ever made, the affidavit thereof being made by the "editor" of the
"Pacific Christian Advocate," and not by "the printer, or his foreman or principal clerk." The court admitted the
evidence subject to the objections.

The finding of the court in regard to the facts bearing upon the asserted jurisdiction of the State court is as follows: --

That, on Nov. 13, 1865, Mitchell applied to said Circuit Court, upon his own affidavit of that date, for an order allowing
the service of the summons in said action to be made upon Neff by publication thereof, whereupon said court made
said order, in the words following:

"Now, at this day, comes the plaintiff in his proper person, and by his attorneys, Mitchell and Dolph, and files affidavit
of plaintiff, and motion for an order of publication of summons, as follows, to wit:"

"Now comes the plaintiff, by his attorneys, and upon the affidavit of plaintiff, herewith filed, moves the court for an
order of publication of summons against defendant, as required by law, he being a nonresident;"

"and it appearing to the satisfaction of the court that the defendant cannot, after due diligence, be

Page 95 U. S. 717

found in this State, and that he is a nonresident thereof, that his place of residence is unknown to plaintiff, and cannot,
with reasonable diligence, be ascertained by him, and that the plaintiff has a cause of action of action against
defendant, and that defendant has property in this county and State, it is ordered and adjudged by the court that
service of the summons in this action be made by publication for six weeks successively in the 'Pacific Christian
Advocate,' a weekly newspaper published in Multnomah County, Oregon, and this action is continued for such
service."
That the affidavit of plaintiff, referred to in said order, is in the words following:

"I, J. H. Mitchell, being first duly sworn, say that the defendant, Marcus Neff, is a nonresident of this State; that he
resides somewhere in the State of California, at what place affiant knows not, and he cannot be found in this State;
that plaintiff has a just cause of action against defendant for a money demand on account; that this court has
jurisdiction of such action; that the defendant has property in this county and State."

That the complaint in said action was verified and filed on Nov. 3, 1865, and contained facts tending to prove that, at
that date, said Mitchell had a cause of action against said Neff for services as an attorney, performed "between Jan. 1,
1862, and May 15, 1863." That the entry of judgment in said action contained the following averments:

"And it appearing to the court that the defendant was, at the time of the commencement of this action, and ever since
has been, a nonresident of this State; and it further appearing that he has property in this State, and that defendant
had notice of the pendency of this action by publication of the summons for six successive weeks in the 'Pacific
Christian Advocate,' a weekly newspaper of general circulation published in Multnomah County, State of Oregon, the
last issue of which was more than twenty days before the first day of this term."

That the affidavit showing the publication of the summons in the "Advocate" aforesaid was made as stated therein by
the "editor" of that paper. That said complaint, summons, affidavit of Mitchell and of the "editor" of the "Advocate"
aforesaid, and entry of judgment, were in the judgment roll, made up by the clerk in the case, but the order for
publication of the summons aforesaid was not placed in said roll by said clerk, but remains on the files of said court;
and that, when said court made said order for publication, and gave said judgment against Neff, the only evidence it
had before it to prove the facts necessary to give it jurisdiction therefor, and particularly to authorize it to find and state
that Neff's residence was unknown to Mitchell, and could not, with reasonable diligence, be ascertained by him, and
that Neff had notice of the pendency of said action by the publication of the summons as aforesaid, was, so far as
appears by the said roll and the records and files of the said court, the said complaint and affidavits of Mitchell and the
editor of the "Advocate."

The statute of Oregon at the time of the commencement of the suit against Neff was as follows: --

"SECT. 55. When service of the summons cannot be made as prescribed in the last preceding section, and the
defendant, after due diligence, cannot be found within the State, and when that fact appears, by affidavit, to the
satisfaction of the court or judge thereof, or justice in an action in a justice's court, and it also appears that a cause of
action exists against the defendant, or that he is a proper party to an action relating to real property in this State, such
court or judge or justice may grant an order that the service be made by publication of summons in either of the
following cases: . . ."

"3. When the defendant is not a resident of the State, but has property therein, and the court has jurisdiction of the
subject of the action."

"SECT. 56. The order shall direct the publication to be made in a newspaper published in the county where the action
is commenced, and, if no newspaper be published in the county, then in a newspaper to be designated as most likely
to give notice to the person to be served, and for such length of time as may be deemed reasonable, not less than
once a week for six weeks. In case of publication, the court or judge shall also direct a copy of the summons and
complaint to be forthwith deposited in the post office, directed to the defendant, at his place of residence, unless it
shall appear that such residence is neither known to the party making the application, nor can, with reasonable
diligence, be ascertained by him. When publication is ordered, personal service of a copy of the summons and
complaint out of the State shall be equivalent to publication and deposit in the post office. In either case, the defendant
shall appear and answer by the first day of the term following the expiration of the time prescribed in the order for
publication; and, if he does not, judgment may be taken against him for want thereof. In case of personal service out
of the State, the summons shall specify the time prescribed in the order for publication."

"SECT. 57. The defendant against whom publication is ordered, or his personal representatives, on application and
sufficient cause shown, at any time before judgment, shall be allowed to defend the action; and the defendant against
whom publication is ordered, or his representatives, may in like manner, upon good cause shown, and upon such
terms as may be proper, be allowed to defend after judgment, and within one year after the entry of such judgment, on
such terms as may be just; and, if the defence be successful, and the judgment or any part thereof have been
collected or otherwise enforced, such restitution may thereupon be compelled as the court shall direct. But the title to
property sold upon execution issued on such judgment to a purchaser in good faith shall not be thereby affected."

"SECT. 60. Proof of the service of summons shall be, in case of publication, the affidavit of the printer, or his foreman,
or his principal clerk, showing the same."
 International Shoe v. State of Washington, 326 U.S. 310 (1945)

Primary Holding
Personal jurisdiction is constitutionally permissible when a defendant has minimum contacts with the state
where a lawsuit is brought such that notions of fair play and substantial justice would not be offended.
Facts
International Shoe Co. was a business incorporated in Delaware with its principal place of business in
Missouri. It employed about a dozen salesmen in the state of Washington, who were residents of that state
paid by commissions on their sales. International Shoe did not own any property or have a permanent
location in Washington, since the salesmen used hotels and rented spaces to interact with potential clients.
This system was designed to restrict the company's location to Missouri, although the business earned
about $30,000 annually from customers in Washington.

The state enacted a tax on companies doing business there that functioned as a mandatory contribution to
its Unemployment Compensation Fund. When International Shoe failed to comply with the tax, the state of
Washington served a notice of assessment on one of the resident salesmen and sent a letter by registered
mail to the company's Missouri headquarters. International Shoe tried to forestall the case at the outset by
moving that it be dismissed for a lack of personal jurisdiction. This argument failed at every level of the
state court system.

yllabus

Activities within a State of salesmen in the employ of a foreign corporation, exhibiting samples of
merchandise and soliciting orders from prospective buyers to be accepted or rejected by the corporation at
a point outside the State, were systematic and continuous, and resulted in a large volume of interstate
business. A statute of the State requires employers to pay into the state unemployment compensation fund
a specified percentage of the wages paid for the services of employees within the State.

Held:

1. In view of 26 U.S.C. § 1606(a) , providing that no person shall be relieved from compliance with a state
law requiring payments to an unemployment fund on the ground that he is engaged in interstate commerce,
the fact that the corporation is engaged in interstate commerce does not relieve it from liability for payments
to the state unemployment compensation fund. P. 326 U. S. 315.

2. The activities in behalf of the corporation render it amenable to suit in courts of the State to recover
payments due to the state unemployment compensation fund. P. 326 U. S. 320.

(a) The activities in question established between the State and the corporation sufficient contacts or ties to
make it reasonable and just, and in conformity to the due process requirements of the Fourteenth
Amendment, for the State to enforce against the corporation an obligation arising out of such activities. P.
326 U. S. 320.

(b) In such a suit to recover payments due to the unemployment compensation fund, service of process
upon one of the corporation's salesmen within the State, and notice sent by registered mail to the
corporation at its home office, satisfies the requirements of due process. P. 326 U. S. 320.

Page 326 U. S. 311

3. The tax imposed by the state unemployment compensation statute -- construed by the state court, in its
application to the corporation, as a tax on the privilege of employing salesmen within the State -- does not
violate the due process clause of the Fourteenth Amendment. P. 326 U. S. 321.

22 Wash.2d 146, 154 P.2d 801, affirmed.

APPEAL from a judgment upholding the constitutionality of a state unemployment compensation statute as
applied to the appellant corporation.
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)

Primary Holding
Reasonable steps must be taken to give potentially interested parties notice of an action and an opportunity
to respond, and notice by publication may be insufficient if the names and addresses of non-resident
parties are available.
Facts
To promote the efficient and economical administration of funds in a trust, New York allowed corporate
trustees to pool the assets of multiple small trusts that they administered. While each trust shared in the
common fund, the trustees completely controlled all of the assets but were required to submit periodic
accountings of profits, losses, and assets to the courts for approval. Beneficiaries had the right to object to
irregularities in the administration of the common fund after they were notified of the accounting. They no
longer could object, however, once the court approved the accountings.

Central Hanover Bank consolidated 113 small trusts into a single common fund, and it notified all interested
parties of the fund and the law that gave rise to its actions. It used a local New York newspaper to provide
notice. Mullane, who was the appointed guardian for all parties with an interest in the trust's income,
objected on the grounds that this type of notice was insufficient to meet due process requirements. He
pointed out that out-of-state beneficiaries and other interested parties would not be likely to be informed
through publication of the impact on their rights.

Syllabus

A trust company in New York which had exclusive management and control of a common trust fund
established by it under §100-c of the New York Banking Law petitioned under that section for a judicial
settlement of accounts which would be binding and conclusive as to any matter set forth therein upon
everyone having any interest in the common fund or in any participating trust. In this common fund, the
trust company had invested assets of numerous small trusts of which it was trustee and of which some of
the beneficiaries were residents, and some nonresidents, of the State. The only notice of this petition given
beneficiaries was by publication in a local newspaper pursuant to §100-c(12).

Held:

1. Whether such a proceeding for settlement of accounts be technically in personam, in rem, or quasi in
rem, the interest of each state in providing means to close trusts that exist by the grace of its laws and are
administered under the supervision of its courts is such as to establish beyond doubt the right of its courts
to determine the interests of all claimants, resident or nonresident, provided its procedure accords full
opportunity to appear and be heard. Pp. 339 U. S. 311-313.

2. The statutory notice by publication is sufficient as to any beneficiaries whose interests or addresses are
unknown to the trustee, since there are no other means of giving them notice which are both practicable
and more effective. Pp. 339 U. S. 313-318.

3. Such notice by publication is not sufficient under the Fourteenth Amendment as a basis for adjudication
depriving of substantial property rights known persons whose whereabouts are also known, since it is not
impracticable to make serious efforts to notify them at least by ordinary mail to their addresses on record
with the trust company. Pp. 339 U. S. 318-320.

299 N.Y. 697, 87 N.E.2d 73, reversed.

Overruling objections to the statutory notice to beneficiaries by publication authorized by §100-c of the New York Banking Law, a
New York Surrogate's Court entered a final decree accepting an accounting of the trustee of

Page 339 U. S. 307

a common trust fund established pursuant to that section. 75 N.Y.S.2d 397. This decree was affirmed by the Appellate Division of
the Supreme Court of New York (see 274 App.Div. 772, 80 N.Y.S.2d 127), and the Court of Appeals of New York (229 N.Y. 697, 87
N.E.2d 73). On appeal to this Court, reversed, p. 339 U. S. 320.
Shaffer v. Heitner, 433 U.S. 186 (1977)

Primary Holding
Property is not an appropriate basis for a state to declare personal jurisdiction unless the International Shoe
test of minimum contacts is satisfied.
Facts
Heitner, who was not a resident of Delaware, brought a derivative suit against Greyhound in Delaware after
it was subjected to a large antitrust judgment in Oregon. Heitner owned only one share of Greyhound stock.
He chose Delaware because it was the site of the company's incorporation. Of the 28 corporate officers
whom Heitner also sued, only seven were residents of Delaware. Jurisdiction in Delaware over the
remaining 21 was based on their ownership of Greyhound stock, which was considered to be located within
the state of incorporation. Delaware permitted plaintiffs to seize property within it ex parte to compel
another party to submit to personal jurisdiction there.

When a freeze order was placed on the corporate books, although none of the stock certificates was in
Delaware, the 21 defendants who were non-residents argued that the court did not have personal
jurisdiction and that the Delaware law was unconstitutional under Sniadach v. Family Finance Corp. (1969).
They pointed out that they did not have minimum contacts with Delaware such that personal jurisdiction
was appropriate. However, the lower courts ruled that the statute was valid because it did not seize a
defendant's property but rather was used simply to bring defendants into court. The lower courts generally
did not address the argument about minimum contacts.

Syllabus

Appellee, a nonresident of Delaware, filed a shareholder's derivative suit in a Delaware Chancery Court,
naming as defendants a corporation and its subsidiary, as well as 28 present or former corporate officers or
directors, alleging that the individual defendants had violated their duties to the corporation by causing it
and its subsidiary to engage in actions (which occurred in Oregon) that resulted in corporate liability for
substantial damages in a private antitrust suit and a large fine in a criminal contempt action.
Simultaneously, appellee, pursuant to Del.Code Ann., Tit. 10, § 366 (1975), filed a motion for sequestration
of the Delaware property of the individual defendants, all nonresidents of Delaware, accompanied by an
affidavit identifying the property to be sequestered as stock, options, warrants, and various corporate rights
of the defendants. A sequestration order was issued pursuant to which shares and options belonging to 21
defendants (appellants) were "seized" and "stop transfer" orders were placed on the corporate books.
Appellants entered a special appearance to quash service of process and to vacate the sequestration
order, contending that the ex parte sequestration procedure did not accord them due process; that the
property seized was not capable of attachment in Delaware; and that they did not have sufficient contacts
with Delaware to sustain jurisdiction of that State's courts under the rule of International Shoe Co. v.
Washington, 326 U. S. 310. In that case, the Court (after noting that the historical basis of in personam
jurisdiction was a court's power over the defendant's person, making his presence within the court's
territorial jurisdiction a prerequisite to its rendition of a personally binding judgment against him, Pennoyer
v. Neff, 95 U. S. 714) held that that power was no longer the central concern, and that

"due process requires only that, in order to subject a defendant to a judgment in personam, if he be not
present within the territory of the forum, he have certain minimum contacts with it such that the
maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'"

(and thus the focus shifted to the relationship among the defendant, the forum, and the litigation, rather
than the mutually exclusive sovereignty of the States on which the rules of Pennoyer had rested). The
Court of Chancery, rejecting appellants' arguments, upheld the § 366 procedure of compelling the

Page 433 U. S. 187

personal appearance of a nonresident defendant to answer and defend a suit brought against him in a
court of equity, which is accomplished by the appointment of a sequestrator to seize and hold the property
of the nonresident located in Delaware subject to court order, with release of the property being made upon
the defendant's entry of a general appearance. The court held that the limitation on the purpose and length
of time for which sequestered property is held comported with due process, and that the statutory situs of the stock
(under a provision making Delaware the situs of ownership of the capital stock of all corporations existing under the
laws of that State) provided a sufficient basis for the exercise of quasi in rem jurisdiction by a Delaware court. The
Delaware Supreme Court affirmed, concluding that International Shoe raised no constitutional barrier to the
sequestration procedure because

"jurisdiction under § 366 remains . . . quasi in rem founded on the presence of capital stock [in Delaware], not on prior
contact by defendants with this forum."

Held:

1. Whether or not a State can assert jurisdiction over a nonresident must be evaluated according to the minimum
contacts standard of International Shoe Co. v. Washington, supra. Pp. 433 U. S. 207-212.

(a) In order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising
"jurisdiction over the interests of persons in the thing." The presence of property in a State may bear upon the
existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation, as for
example, when claims to the property itself are the source of the underlying controversy between the plaintiff and
defendant, where it would be unusual for the State where the property is located not to have jurisdiction. Pp. 433 U. S.
207-208.

(b) But where, as in the instant quasi in rem action, the property now serving as the basis for state court jurisdiction is
completely unrelated to the plaintiff's cause of action, the presence of the property alone, i.e., absent other ties among
the defendant, the State, and the litigation, would not support the State's jurisdiction. Pp. 433 U. S. 208-209.

(c) Though the primary rationale for treating the presence of property alone as a basis for jurisdiction is to prevent a
wrongdoer from avoiding payment of his obligations by removal of his assets to a place where he is not subject to an
in personam suit, that is an insufficient justification for recognizing jurisdiction without regard to whether the property is
in the State for that purpose. Moreover, the availability of attachment procedures and the protection of the Full Faith
and Credit Clause also militate against that rationale. Pp. 433 U. S. 209-210.

(d) The fairness standard of International Shoe can be easily applied in the vast majority of cases. P. 433 U. S. 211.

(e) Though jurisdiction based solely on the presence of property in a State has had a long history, "traditional notions
of fair play and substantial justice" can be as readily offended by the perpetuation of ancient forms that are no longer
justified as by the adoption of new procedures that do not comport with the basic values of our constitutional heritage.
Cf. Sniadach v. Family Finance Corp, 395 U. S. 337, 395 U. S. 340; Wolf v. Colorado, 338 U. S. 25, 338 U. S. 27. Pp.
433 U. S. 211-212.

2. Delaware's assertion of jurisdiction over appellants, based solely as it is on the statutory presence of appellants'
property in Delaware, violates the Due Process Clause, which

"does not contemplate that a state may make binding a judgment . . . against an individual or corporate defendant with
which the state has no contacts, ties, or relations."

International Shoe, supra at 433 U. S. 319. Pp. 433 U. S. 213-217.

(a) Appellants' holdings in the corporation, which are not the subject matter of this litigation and are unrelated to the
underlying cause of action, do not provide contacts with Delaware sufficient to support jurisdiction of that State's
courts over appellants. P. 433 U. S. 213.

(b) Nor is Delaware state court jurisdiction supported by that State's interest in supervising the management of a
Delaware corporation and defining the obligations of its officers and directors, since Delaware bases jurisdiction not on
appellants' status as corporate fiduciaries, but on the presence of their property in the State. Moreover, sequestration
has been available in any suit against a nonresident, whether against corporate fiduciaries or not. Pp. 433 U. S. 213-
215.

(c) Though it may be appropriate for Delaware law to govern the obligations of appellants to the corporation and
stockholders, this does not mean that appellants have "purposefully avail[ed themselves] of the privilege of conducting
activities within the forum State," Hanson v. Denckla, 357 U. S. 235, 357 U. S. 253. Appellants, who were not required
to acquire interests in the corporation in order to hold their positions, did not, by acquiring those interests, surrender
their right to be brought to judgment in the States in which they had "minimum contacts." Pp. 433 U. S. 215-216.
G.R. No. 47517 June 27, 1941

IDONAH SLADE PERKINS, petitioner,

vs.
MAMERTO ROXAS, ET AL., respondents.

Alva J. Hill for petitioner.

DeWitt, Perkins & Ponce Enrile for respondent Judge and respondent Perkins.
Ross, Lawrence, Selph & Carrascoso, Jr., for respondent Benguet Consolidated Mining Co.

LAUREL, J.:

On July 5, 1938, the respondent Eugene Arthur Perkins, filed a complaint in the Court of First Instance of
Manila against the Benguet Consolidated Mining Company for the recovery of the sum of P71,379.90,
consisting of dividends which have been declared and made payable on 52,874 shares of stock registered
in his name, payment of which was being withheld by the company, and for the recognition of his right to
the control and disposal of said shares, to the exclusion of all others. To the complaint, the company filed
its answer, alleging, by way of defense, that the withholding of plaintiff's right to the disposal and control of
the shares was due to certain demands made with respect to said shares by the petitioner herein. Idonah
Slade Perkins, and by one George H. Engelhard. The answer prays that the adverse claimants be made
parties to the action and served with notice thereof by publication, and that thereafter all such parties be
required to interplead and settle the rights among themselves.

On September 5, 1938, the trial court ordered the respondent, Eugene Arthur Perkins, to include in his
complaint as parties defendants petitioner, Idonah Slade Perkins, and George H. Engelhard. The complaint
was accordingly amended and in addition to the relief prayed for in the original complaint, respondent
Perkins prayed that petitioner Idonah Slade Perkins and George H. Engelhard be adjudged without interest
in the shares of stock in question and excluded from any claim they assert thereon. Thereafter, summons
by publication were served upon the non-resident defendants, Idonah Slade Perkins and George H.
Engelhard, pursuant to the order of the trial court. On December 9, 1938, Engelhard filed his answer to the
amended complaint, and on January 8, 1940, petitioner's objection to the court's jurisdiction over her
person having been overruled by the trial court and by this court in G. R. No. 46831, petitioner filed her
answer with a cross-complaint in which she sets up a judgment allegedly obtained by her against
respondent, Eugene Arthur Perkins, from the Supreme Court of the State of New York, wherein it is
declared that she is the sole legal owner and entitled to the possession and control of the shares of stock in
question together with all the cash dividends declared thereon by the Benguet Consolidated Mining
Company, and prays for various affirmative reliefs against the respondent. To the answer and cross-
complaint thus filed, the respondent, Eugene Arthur Perkins, filed a reply and an answer in which he sets
up several defenses to the enforcement in this jurisdiction of the judgment of the Supreme Court of the
State of New York above alluded to. Instead of demurring to the reply on either of the two grounds specified
in section 100 of the Code of Civil Procedure, petitioner, Idonah Slade Perkins, on June 5, 1940, filed a
demurrer thereto on the ground that "the court has no jurisdiction of the subject of the action," because the
alleged judgment of the Supreme Court of the State of New York is res judicata.

Petitioner's demurrer having been overruled, she now filed in this court a petition entitled "Certiorari,
Prohibition and Mandamus," alleging that "the respondent judge is about to and will render judgment in the
above-mentioned case disregarding the constitutional rights of this petitioner; contrary to and annulling the
final, subsisting, valid judgment rendered and entered in this petitioner's favor by the courts of the State of
New York, ... which decision is res judicata on all the questions constituting the subject matter of civil case
No. 53317, of the Court of First Instance of Manila; and which New York judgment the Court of First
Instance of Manila is without jurisdiction to annul, amend, reverse, or modify in any respect whatsoever";
and praying that the order of the respondent judge overruling the demurrer be annulled, and that he and his
successors be permanently prohibited from taking any action on the case, except to dismiss the same.

The only question here to be determined, therefore, is whether or not, in view of the alleged judgment
entered in favor of the petitioner by the Supreme Court of New York, and which is claimed by her to be res
judicata on all questions raised by the respondent, Eugene Arthur Perkins, in civil case No. 53317 of the
Court of First Instace of Manila, the local court has jurisdiction over the subject matter of the action in the
said case. By jurisdiction over the subject matter is meant the nature of the cause of action and of the relief
sought, and this is conferred by the sovereign authority which organizes the court, and is to be sought for in
general nature of its powers, or in authority specially conferred. In the present case, the amended
complaint filed by the respondent, Eugene Arthur Perkins, in the court below alleged the ownership in
himself of the conjugal partnership between him and his wife, Idonah Slade Perkins; that the petitioner,
Idonah Slade Perkins, and George H. Engelhard assert claims to and interests in the said stock adverse to
Eugene Arthur Perkins; that such claims are invalid, unfounded, and made only for the purpose of vexing,
hindering and delaying Eugene Arthur Perkins in the exercise of the lawful control over and use of said
shares and dividends accorded to him and by law and by previous orders and decrees of this court; and the
said amended complaint prays, inter alia, "that defendant Benguet Consolidated Mining Company be
required and ordered to recognize the right of the plaintiff to the control and disposal of said shares so
standing in his name to the exclusion of all others; that the additional defendants, Idonah Slade Perkins and
George H. Engelhard, be each held to have no interest or claim in the subject matter of the controversy
between plaintiff and defendant Benguet Consolidated Mining Company, or in or under the judgment to be
rendered herein and that by said judgment they, and each of them be excluded therefrom; and that the
plaintiff be awarded the costs of this suit and general relief." The respondent's action, therefore, calls for the
adjudication of title to certain shares of stock of the Benguet Consolidated Mining Company, and the
granting of affirmative reliefs, which fall within the general jurisdiction of the Court of First Instance of
Manila. (Vide: sec. 146, et seq., Adm. Code, as amended by Commonwealth Act No. 145; sec. 56, Act No.
136, as amended by Act No. 400.)

Similarly, the Court of First Instance of Manila is empowered to adjudicate the several demands contained
in petitioner's cross-complaint. The cross-complaint sets up a judgment allegedly recovered by Idonah
Slade Perkins against Eugene Arthur Perkins in the Supreme Court of New York and by way of relief prays:

(1) Judgment against the plaintiff Eugene Arthur Perkins in the sum of one hundred eighty-five thousand
and four hundred dollars ($185,400), representing cash dividends paid to him by defendant Benguet
Consolidated Mining Co. from February, 1930, up to and including the dividend of March 30, 1937.

(2) That plaintiff Eugene Arthur Perkins be required to deliver to this defendant the certificates representing
the 48,000 shares of capital stock of Benguet Consolidated Mining Co. issued as a stock dividend on the
24,000 shares owned by this defendant as described in the judgment Exhibit 1-A.

(3) That this defendant recover under that judgment Exhibit 1-A interest upon the amount of each cash
dividend referred to in that judgment received by plaintiff Eugene Arthur Perkins from February, 1930, to
and including the dividend of March 30, 1937, from the date of payment of each of such dividends at the
rate of 7 per cent per annum until paid.

(4) That this defendant recover of plaintiff her costs and disbursements in that New York action amounting
to the sum of one thousand five hundred eighty-four and 20/00 dollars ($1,584.20), and the further sum of
two thousand dollars ($2,000) granted her in that judgment Exhibit 1-A as an extra allowance, together with
interest.

(5) For an order directing an execution to be issued in favor of this defendant and against the plaintiff for
amounts sufficient to satisfy the New York judgment Exhibit 1-A in its entirety, and against the plaintiff and
the defendant Benguet Consolidated Mining Co. for such other amounts prayed for herein as this court may
find to be due and payable by each of them; and ordering them to comply with all other orders which this
court may issue in favor of the defendant in this case.

(6) For the costs of this action, and

(7) For such other relief as may be appropriate and proper in the premises.

In other words, Idonah Slade Perkins in her cross-complaint brought suit against Eugene Arthur Perkins
and the Benguet Consolidated Mining Company upon the alleged judgment of the Supreme Court of the
State of New York and asked the court below to render judgment enforcing that New York judgment, and to
issue execution thereon. This is a form of action recognized by section 309 of the Code of Civil Procedure
(now section 47, Rule 39, Rules of Court) and which falls within the general jurisdiction of the Court of First
Instance of Manila, to adjudicate, settled and determine.
The petitioner expresses the fear that the respondent judge may render judgment "annulling the final,
subsisting, valid judgment rendered and entered in this petitioner's favor by the courts of the State of New
York, ... which decision is res judicata on all the questions constituting the subject matter of civil case No.
53317," and argues on the assumption that the respondent judge is without jurisdiction to take cognizance
of the cause. Whether or not the respondent judge in the course of the proceedings will give validity and
efficacy to the New York judgment set up by the petitioner in her cross-complaint is a question that goes to
the merits of the controversy and relates to the rights of the parties as between each other, and not to the
jurisdiction or power of the court. The test of jurisdiction is whether or not the tribunal has power to enter
upon the inquiry, not whether its conclusion in the course of it is right or wrong. If its decision is erroneous,
its judgment case be reversed on appeal; but its determination of the question, which the petitioner here
anticipates and seeks to prevent, is the exercise by that court — and the rightful exercise — of its
jurisdiction.

The petition is, therefore, hereby denied, with costs against the petitioner. So ordered.
45 F.2d 426 (1930)
HEINE v. NEW YORK LIFE INS. CO.No. 10465.

District Court, D. Oregon.

December 1, 1930.

C. T. Haas and E. B. Seabrook, both of Portland, Or., for plaintiff.

Huntington, Wilson & Huntington and Clark & Clark, all of Portland, Or., for defendant.

BEAN, District Judge.

This is one of a series of cases pending in this court against the New York Life Insurance Company and the
Guardian Insurance Company, each of which is a New York corporation, to recover on some two hundred
and forty life insurance policies made and issued by the defendants in Germany, in favor of German
citizens and subjects, and payable in German marks. The policies of the New York Life Insurance
Company were issued prior to August 1, 1914, and those of the Guardian prior to May 1, 1918. As a
condition to their right to do business in Germany, the insurance companies were required to and did
submit to the supervision and control of the German insurance officials, to invest the reserves arising from
German policies in German securities, and to establish, and they do now maintain, an office in that country
with a resident representative or agent upon whom service of process can be made.

The actions now pending are brought and prosecuted in the name of, or as assignee of the insured by,
certain parties in the United States and Germany, under an irrevocable power of attorney, by which they
are authorized and empowered to sue for, collect, receive, and receipt for all sums due or owing under the
policies, or compromise the same in consideration of an assignment and transfer to them of the undivided
25 per cent. interest in the policies and all rights accruing thereunder.

None of the parties to the litigation are residents or inhabitants of this district. The plaintiffs reside in, and
are citizens of, the republic of Germany. The defendants are corporations organized and existing under the
laws of New York, with their principal offices in that state, with statutory agents in Oregon, upon whom
service can be made. None of the causes of action arose here, nor do any of the material witnesses reside
in the district, nor are any of the records of the defendant companies pertaining to the policies in suit in the
district, but such records are either at the home office in New York or at their offices in Germany. The
courts of Germany and New York are open and functioning and competent to take jurisdiction of the
controversies, and service can be made upon the defendants in either of such jurisdictions. To require the
defendants to defend the actions in this district would impose upon them great and unnecessary
inconvenience and expense, and probably compel them to produce here (three thousand miles from their
home office) numerous records, books, and papers, all of which are in daily use by it in taking care of
current business.

In addition, it would no doubt consume months of the time of this court to try and dispose of these cases,
thus necessarily disarranging the calendar, resulting in delay, inconvenience, and expense to other litigants
who are entitled to invoke its jurisdiction.

Under these circumstances, the defendants, while conceding that the court has jurisdiction of the person
and subject-matter, urges that it should refuse, in its discretion, to exercise such jurisdiction.

I unhesitatingly concur in this view, for, as said by Mr. Justice Holmes in Cuba Railroad Co. v. Crosby, 222
U.S. 473, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40: "It should be remembered that parties do
not enter into civil relations in foreign jurisdictions in reliance upon our courts. They could not complain if
our courts refused to meddle with their affairs, and remitted them to the place that established and would
enforce their rights. * * * The only just ground for complaint would be if their rights and liabilities, when
enforced by our courts, should be measured by a different rule from that under which the parties dealt."

*427 It is apparent that the plaintiffs are seeking by these actions to impose on the defendants a liability
under a different rule than "that under which the parties dealt."
The courts of Germany have ruled that any person seeking to recover on a civil contract made in Germany
prior to August, 1924, and payable in marks, can only recover on the basis provided in the monetary law of
1924. Manifestly the plaintiffs are not proceeding on any such theory.

It is argued by the plaintiffs that, because the court has jurisdiction of the subject-matter and the parties, it
has no discretion, but should proceed with the case, regardless of where the cause of action arose, or the
law by which it is controlled, or the residence or convenience of the parties and witnesses, or the difficulty
the court would encounter in attempting to interpret and enforce a foreign contract, or the interference with
the other business of the court. But that is a matter resting in its discretion. It may retain jurisdiction, or it
may, in the exercise of a sound discretion, decline to do so, as the circumstances suggest. The courts have
repeatedly refused, in their discretion, to entertain jurisdiction of causes of action arising in a foreign
jurisdiction, where both parties are nonresidents of the forum. Gregonis v. Philadelphia & R. Coal & Iron
Co., 235 N.Y. 152, 139 N.E. 223, 32 A. L. R. 1, and note; Pietraroia v. New Jersey & Hudson River Ry. &
Ferry Co., 197 N.Y. 434, 91 N.E. 120; Gregonis v. P. & R. Coal & Iron Co., 235 N.Y. 152, 139 N.E. 223, 32
A. L. R. 1; Stewart v. Litchenberg, 148 La. 195, 86 So. 734; Smith v. Mutual Life Insurance Co., 14 Allen
(96 Mass.) 336-343; National Telephone Mfg. Co. v. Du Bois, 165 Mass. 117, 42 N.E. 510, 30 L. R. A. 628,
52 Am. St. Rep. 503; Collard v. Beach, 81 App. Div. 582, 81 N.Y.S. 619; Great Western Railway Co. v.
Miller, 19 Mich. 305; Disconto Gesellschat v. Umbreit, 127 Wis. 651, 106 N.W. 821, 15 L. R. A. (N. S.)
1045, 115 Am. St. Rep. 1063.

As said by Mr. Justice Bradley in The Belgenland, 114 U.S. 355, 5 S. Ct. 860, 864, 29 L. Ed. 152:
"Circumstances often exist which render it inexpedient for the court to take jurisdiction of controversies
between foreigners in cases not arising in the country of the forum; as, where they are governed by the
laws of the country to which the parties belong, and there is no difficulty in a resort to its courts; or where
they have agreed to resort to no other tribunals * * * not on the ground that it has not jurisdiction, but that,
from motives of convenience, or international comity, it will use its discretion whether to exercise jurisdiction
or not."

See, also, Charter Shipping Co. v. Bowring, 281 U.S. 515, 50 S. Ct. 400, 74 L. Ed. 1008.

These, in my judgment, are cases of that kind. They are actions brought on causes of action arising in
Germany. The contract of insurance was made and to be paid there and in German currency. It is to be
construed and given effect according to the laws of the place where it was made. 22 Am. & Eng. Ency. of
Law (2d Ed.) 1350. The courts of this country are established and maintained primarily to determine
controversies between its own citizens and those having business there, and manifestly the court may
protect itself against a flood of litigation over contracts made and to be performed in a foreign country,
where the parties and witnesses are nonresidents of the forum, and no reason exists why the liability, if
any, cannot be enforced in the courts of the country where the cause of action arose, or in the state where
the defendant was organized and has its principal offices. True, the courts of New York have declined to
exercise jurisdiction over actions brought on insurance policies similar to those in suit. Higgins v. N. Y. Ins.
Co., 220 App. Div. 760, 222 N.Y.S. 819, and Von Nessen-Stone v. N. Y. Life Ins. Co.[1] But that affords no
reason why this court should do so. It is to me unthinkable that residents and citizens of Germany may
import bodily into this court numerous actions against a nonresident defendant, on contracts made and
payable in Germany, and insist as a matter of right that, because it has obtained jurisdiction of the
defendant by service of its statutory agent, the taxpayers, citizens, and residents of the district having
business in the court should stand aside and wait the conclusion of the case, where, as here, the courts of
Germany and of the home state of the defendant are open and functioning.

Judge Tucker, in the state court of Multnomah county, in an able and well-considered opinion in a case
brought on one of the German policies (Kahn v. New York), reached the same conclusion.

Motion allowed.
G.R. No. L-32636 March 17, 1930

In the matter Estate of Edward Randolph Hix, deceased.

A.W. FLUEMER, petitioner-appellant,
vs.
ANNIE COUSHING HIX, oppositor-appellee.

C.A. Sobral for appellant.

Harvey & O' Brien and Gibbs & McDonough for appellee.

MALCOLM, J.:

The special administrator of the estate of Edward Randolph Hix appeals from a decision of Judge of First Instance
Tuason denying the probate of the document alleged to by the last will and testament of the deceased. Appellee is not
authorized to carry on this appeal. We think, however, that the appellant, who appears to have been the moving party
in these proceedings, was a "person interested in the allowance or disallowance of a will by a Court of First Instance,"
and so should be permitted to appeal to the Supreme Court from the disallowance of the will (Code of Civil Procedure,
sec. 781, as amended; Villanueva vs. De Leon [1925], 42 Phil., 780).

It is theory of the petitioner that the alleged will was executed in Elkins, West Virginia, on November 3, 1925, by Hix
who had his residence in that jurisdiction, and that the laws of West Verginia Code, Annotated, by Hogg, Charles E.,
vol. 2, 1914, p. 1690, and as certified to by the Director of the National Library. But this was far from a compliance with
the law. The laws of a foreign jurisdiction do not prove themselves in our courts. the courts of the Philippine Islands
are not authorized to take American Union. Such laws must be proved as facts. (In re Estate of Johnson [1918], 39
Phil., 156.) Here the requirements of the law were not met. There was no was printed or published under the authority
of the State of West Virginia, as provided in section 300 of the Code of Civil Procedure. Nor was the extract from the
law attested by the certificate of the officer having charge of the original, under the sale of the State of West Virginia,
as provided in section 301 of the Code of Civil Procedure. No evidence was introduced to show that the extract from
the laws of West Virginia was in force at the time the alleged will was executed.

In addition, the due execution of the will was not established. The only evidence on this point is to be found in the
testimony of the petitioner. Aside from this, there was nothing to indicate that the will was acknowledged by the
testator in the presence of two competent witnesses, of that these witnesses subscribed the will in the presence of the
testator and of each other as the law of West Virginia seems to require. On the supposition that the witnesses to the
will reside without the Philippine Islands, it would then the duty of the petitioner to prove execution by some other
means (Code of Civil Procedure, sec. 633.)

It was also necessary for the petitioner to prove that the testator had his domicile in West Virginia and not establish
this fact consisted of the recitals in the CATHY will and the testimony of the petitioner. Also in beginning administration
proceedings orginally in the Philippine Islands, the petitioner violated his own theory by attempting to have the
principal administration in the Philippine Islands.

While the appeal pending submission in this court, the attorney for the appellant presented an unverified petition
asking the court to accept as part of the evidence the documents attached to the petition. One of these documents
discloses that a paper writing purporting to be the was presented for probate on June 8, 1929, to the clerk of Randolph
Country, State of West Virginia, in vacation, and was duly proven by the oaths of Dana Wamsley and Joseph L.
MAdden, the subscribing witnesses thereto , and ordered to be recorded and filed. It was shown by another document
that, in vacation, on June 8, 1929, the clerk of court of Randolph Country, West Virginia, appointed Claude W.
Maxwell as administrator, cum testamento annexo, of the estate of Edward Randolph Hix, deceased. In this
connection, it is to be noted that the application for the probate of the will in the Philippines was filed on February 20,
1929, while the proceedings in West Virginia appear to have been initiated on June 8, 1929. These facts are strongly
indicative of an intention to make the Philippines the principal administration and West Virginia the ancillary
administration. However this may be, no attempt has been made to comply with Civil Procedure, for no hearing on the
question of the allowance of a will said to have been proved and allowed in West Virginia has been requested. There
is no showing that the deceased left any property at any place other than the Philippine Islands and no contention that
he left any in West Virginia.

Reference has been made by the parties to a divorce purported to have been awarded Edward Randolph Hix from
Annie Cousins Hix on October 8, 1925, in the State of West specific pronouncements on the validity or validity of this
alleged divorce.

For all of the foregoing, the judgment appealed from will be affirmed, with the costs of this instance against the
appellant.
G.R. No. L-12105 January 30, 1960

TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-appellee,

vs.
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA BOHANAN, oppositors-
appellants.

Jose D. Cortes for appellants.

Ohnick, Velilla and Balonkita for appellee.

LABRADOR, J.:

Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose, presiding,
dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the
project of partition submitted by the executor and approving the said project.

On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding, admitted to
probate a last will and testament of C. O. Bohanan, executed by him on April 23, 1944 in Manila. In the said
order, the court made the following findings:

According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of
that state, or at least a citizen of California where some of his properties are located. This contention in
untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely
temporary, and he continued and remained to be a citizen of the United States and of the state of his
pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the
United States depended upon his personal intent or desire, and he selected Nevada as his homicide and
therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or
permanent residence for him. That is his exclusive personal right.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the
United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in
accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the
Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and
upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the
prescribed oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).

It does not appear that the order granting probate was ever questions on appeal. The executor filed a
project of partition dated January 24, 1956, making, in accordance with the provisions of the will, the
following adjudications: (1) one-half of the residuary estate, to the Farmers and Merchants National Bank of
Los Angeles, California, U.S.A. in trust only for the benefit of testator's grandson Edward George Bohanan,
which consists of several mining companies; (2) the other half of the residuary estate to the testator's
brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike. This consist in the same
amount of cash and of shares of mining stock similar to those given to testator's grandson; (3) legacies of
P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be
paid in three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine
Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;

It will be seen from the above that out of the total estate (after deducting administration expenses) of
P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of
several mining companies and to his brother and sister the same amount. To his children he gave a legacy
of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions
disposing of the estate in the manner above indicated, claiming that they have been deprived of the
legitimate that the laws of the form concede to them.

The first question refers to the share that the wife of the testator, Magdalena C. Bohanan, should be
entitled to received. The will has not given her any share in the estate left by the testator. It is argued that it
was error for the trial court to have recognized the Reno divorce secured by the testator from his Filipino
wife Magdalena C. Bohanan, and that said divorce should be declared a nullity in this jurisdiction, citing the
case of Querubin vs. Querubin, 87 Phil., 124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55
Phil., 852, Ramirez vs. Gmur, 42 Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused
to recognize the claim of the widow on the ground that the laws of Nevada, of which the deceased was a
citizen, allow him to dispose of all of his properties without requiring him to leave any portion of his estate to
his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:

Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or her
estate, real and personal, the same being chargeable with the payment of the testator's debts.

Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the testator's
estafa had already been passed upon adversely against her in an order dated June 19, 1955, (pp. 155-159,
Vol II Records, Court of First Instance), which had become final, as Magdalena C. Bohanan does not
appear to have appealed therefrom to question its validity. On December 16, 1953, the said former wife
filed a motion to withdraw the sum of P20,000 from the funds of the estate, chargeable against her share in
the conjugal property, (See pp. 294-297, Vol. I, Record, Court of First Instance), and the court in its said
error found that there exists no community property owned by the decedent and his former wife at the time
the decree of divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact
contained therein, i.e. that there was no community property acquired by the testator and Magdalena C.
Bohanan during their converture.

Moreover, the court below had found that the testator and Magdalena C. Bohanan were married on
January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925,
Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the
testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada
and since the court below had already found that there was no conjugal property between the testator and
Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the
testator.

The most important issue is the claim of the testator's children, Edward and Mary Lydia, who had received
legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate
which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator. Is the
failure old the testator to give his children two-thirds of the estate left by him at the time of his death, in
accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides
that successional rights to personal property are to be earned by the national law of the person whose
succession is in question. Says the law on this point:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the
extent of the successional rights and the intrinsic validity of their provisions, shall be regulated by the
national law of the person whose succession is in question, whatever may be the nature of the property and
the country in which it is found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil
Code.)

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a
citizen of the State of Nevada because he had selected this as his domicile and his permanent residence.
(See Decision dated April 24, 1950, supra). So the question at issue is whether the estementary
dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of
the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his
properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). It does not appear that at time of the
hearing of the project of partition, the above-quoted provision was introduced in evidence, as it was the
executor's duly to do. The law of Nevada, being a foreign law can only be proved in our courts in the form
and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any
purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the
legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. . . . (Rule 123).
We have, however, consulted the records of the case in the court below and we have found that during the
hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her
share, the foreign law, especially Section 9905, Compiled Nevada Laws. was introduced in evidence by
appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II, and t.s.n. pp. 24-44, Records, Court of
First Instance). Again said laws presented by the counsel for the executor and admitted by the Court as
Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (se Records,
Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the
laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the
pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken
judicial notice of by us, without proof of such law having been offered at the hearing of the project of
partition.

As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be
governed by the national law of the testator, and as it has been decided and it is not disputed that the
national law of the testator is that of the State of Nevada, already indicated above, which allows a testator
to dispose of all his property according to his will, as in the case at bar, the order of the court approving the
project of partition made in accordance with the testamentary provisions, must be, as it is hereby affirmed,
with costs against appellants.
Gray v. Gray

PEASLEE, C. J.

I. "If there is no ground of action in the sovereignty where the tort is alleged to have occurred, there is none
anywhere. . . . To ascertain the rights resulting from acts done or omitted, attention must be paid to the
circumstances under which the events took place; and one of the governing circumstances is the law of the
place which characterizes the act. . . . In like manner, when a right is claimed upon acts occurring in
another country, courts look to the law of that country, not to extend the binding force of a foreign law
beyond the territorial limits of the sovereignty to which it belongs, but to ascertain whether the right claimed
exists or not. It is not the foreign law, but the rights acquired under it, which are enforced by the courts of
another country; and this is true whether the question be one of contract, tort, or status." MacDonald v.
Railway, 71 N.H. 448, 450, 451.

"If there is a conflict between the lex loci and the lex fori, the former governs in torts the same as in
contracts, in respect to the legal effect and incidents of acts. . . . Therefore, whatever would be a defence to
this action if it had been brought in the state of Maine is a defence here, although it would not be if the
cause of action had arisen in this state." Beacham v. Portsmouth Bridge, 68 N.H. 382.

For more than a hundred years this theory of the law has been followed in this state, whenever there has
been occasion to apply it, or any part of it. Wilson v. Rich, 5 N.H. 455; French v. Hall, 9 N.H. 137; Henry v.
Sargeant, 13 N.H. 321; Laird v. Railroad, 62 N.H. 254; Leazotte v. Railroad, 70 N.H. 5; Kimball v. Kimball,
75 N.H. 291; Young v. Company, 76 N.H. 582; Hill v. Railroad, 77 N.H. 151; Stinson v. Railroad, 81 N.H.
473; Marshall v. Railroad, 81 N.H. 548; Lee v. Chamberlin, 84 N.H. 182; Precourt v. Driscoll, 85 N.H. 280;
Small v. Railroad, 85 N.H. 330; Richards v. Richards, 86 N.H. 273; Blanchette v. Sargent, ante, 15.

It has the final approval of the American Law Institute, Restatement, Conflict of Laws, s. 382 et seq. It is
supported by all our eminent text writers upon the subject. Story, Conflict of Laws, s. 558; Dicey, Conflict of
Laws, 21; Beale, Conflict of Laws, 112; Goodrich, Conflict of Laws, 189; Wharton, Conflict of Laws, s. 478
b; Minor, Conflict of Laws, s. 194. The American decisions are almost uniformly to the same effect. They
are collected in 12 C. J. 452, and cross references. In three recent cases the precise question here
involved has been decided adversely to the plaintiff. Buckeye v. Buckeye, 203 Wis. 248; Dawson v.
Dawson, 224 Ala. 13; Howard v. Howard, 200 N.C. 574.

Against this array of authority it is strenuously argued that the decided cases are distinguishable; that much
which has been said is dicta; that the theory is contrary to the English law, unsound in principle, unworkable
in many situations and criticized by a group of present day writers.

It is true that none of our decisions involve the precise facts here presented, but several of them are
indistinguishable in principle. In Beacham v. Portsmouth Bridge, 68 N.H. 382, the defendant was a
wrongdoer, and by New Hampshire law the plaintiff was free from contributory fault. But since by Maine law
his driving contrary to the Sunday law barred a recovery, he had no remedy here for an accident happening
there.

In Lee v. Chamberlin, 84 N.H. 182, Richards v. Richards, 86 N.H. 273 and Blanchette v. Sargent, ante, 15
the defendants were held not to be accountable for ordinary negligence towards guest passengers,
although they would be by the law of this state. The different law as to the incidents attaching to their status
in Massachusetts and Vermont was held to determine the rights of the parties as to events occurring in
those jurisdictions.

In Precourt v. Driscoll, 85 N.H. 280, the plaintiff was called upon to prove her own freedom from fault, in
accordance with the law of Vermont, although by New Hampshire law she would have made a case by
merely showing the defendant's negligence.

It is sought to distinguish the present case upon the ground that the act complained of was a delict, in the
sense that it was not made innocent by Maine law; and the only reason a recovery could not be had in
Maine is the spousal relation of the parties. As the parties are residents of New Hampshire, where spousal
incapacity to sue has been abolished, it is argued that the wife's complaint for acts done in Maine may be
brought into this state and suit upon it maintained here.
The argument fails to distinguish between status and the incidents which local law attaches to the status.
The parties are husband and wife. That status they took with them into Maine. But the incidents of that
status are those prescribed by the law of the place where transactions take place. As before pointed out,
this rule has frequently been applied in tort actions where other relations were involved.

The guest passenger in an automobile remains such after crossing the state line into Massachusetts. But
his recovery here for injuries caused by his host's ordinary negligence depends upon which side of the
state line the accident occurred. If it happened in Massachusetts, there could be no recovery, even though
the parties are residents here and the suit is in this jurisdiction. Lee v. Chamberlin, supra; Richards v.
Richards, supra; Blanchette v. Sargent, supra.

Every argument urged in favor of this plaintiff is applicable to these decided cases. The defendant's act is a
delict by the lex loci. It would have been actionable if committed here; and, as to persons in general, it is
actionable there. But because of the particular relation of the parties, the law there is that there is no cause
of action in the special instance. The plaintiff fails here, as those plaintiffs failed, because there is no cause
of action at the place where the acts complained of were done.

It should be observed that much of the plaintiff's argument is based upon the assertion that inability to
recover in Maine is merely because suits between husband and wife are forbidden. Hence it is urged that
recovery may be had by resort to a jurisdiction where such suits are allowed. But an examination of the
Maine law shows that the rule is much broader. The theory adopted there is not merely that there is a
prohibition of suit, but that the acts complained of do not give rise to any cause of action. There has been
no breach of legal duty.

A suit for false imprisonment during coverture was brought by a divorced wife against her former husband.
The court said: "The theory upon which the present action is sought to be maintained is, that coverture
merely suspends and does not destroy the remedy of the wife against her husband. But the error in the
proposition is the supposition that a cause of action or a right of action ever exists in such a case. There is
not only no civil remedy but there is no civil right, during coverture, to be redressed at any time. There is,
therefore, nothing to be suspended. Divorce cannot make that a cause of action which was not a cause of
action before divorce. The legal character of an act of violence by husband upon wife and of the
consequences that flow from it, is fixed by the condition of the parties at the time the act is done. If there be
no cause of action at the time, there never can be any." Abbott v. Abbott, 67 Me. 304, 306, cited with
approval in Sacknoff v. Sacknoff, 131 Me. 280. In the latter case a wife was denied recovery from the
employer of her husband for injuries caused by the negligence of that employee.

II. The claim that the American rule is opposed to the practice in England is well founded. But the English
law upon the subject is by no means clearly defined. All that is here claimed for it is that in a suit for a
foreign tort recovery may be had according to English law, unless the lex loci has made the act complained
of innocent. This seems to be a splitting of the rule of accountability. The foreign law is noted and applied,
in so far as treating the act as innocent is concerned; but if that obstacle is passed, the English law is then
used, or may be, to supplement the foreign and give a cause of action. This theory never attained any
recognition in this country. "No case in this country has been found where recovery in tort has been allowed
for what was not the basis of an action by the lex loci delicti." Goodrich, Conflict of Laws, 190.

III. Much objection has been made, both by some recent writers and in argument here, against any theory
of vested right or obligatio. If such theory were based upon the idea that a sovereignty is under legal
compulsion to recognize the foreign cause of action, there might be force in the argument. While the
proposition may sometimes have been stated in that extreme form, the common theory is that such
recognition has resulted from the idea that it was the just and politic course to follow. It has been developed
under the impulses of neighborliness and orderliness. It has become an accepted rule precisely as liability
for negligence, once unknown, became a part of the common law.

Wrong theories for the rule may have been advanced. But the destruction of such men of straw does not
affect the validity of the line of procedure they were supposed to defend. It stands upon its own intrinsic
merits. No one denies that the parties may have vested rights, or obligations, in the jurisdiction where the
transaction occurred. But because another sovereignty adopts the rule that it will enforce the right or deny
recovery as the event would be according to the lex loci, it by no means follows that it is the law of the
forum that such course is obligatory upon such sovereignty.
In reaching the conclusions stated in Beacham v. Portsmouth Bridge, 68 N.H. 382, it was not deemed
essential to enter into a discussion of the territoriality of law, of the concept of it spatially, or of the claims of
parties as vested rights, accrued in a foreign jurisdiction. The situation was a practical one. The problem
was "one of judicial expediency" (Saloshin v. Houle, 85 N.H. 126, 130). Forty odd separate jurisdictions had
given rise to pressing questions as to how rights and wrongs originating in one should be dealt with in
another. A few simple ideas were sufficient to indicate the course to be taken. Local conduct should be
governed by local law. Rules of conduct have no force to regulate acts done outside the jurisdiction which
made the rules, save as their operation is enforced by control over parties found within the jurisdiction. In
the great majority of cases complaints of conduct are adjusted in the jurisdiction where the conduct took
place. It is desirable that the remedy be the same, wherever the action is brought.

IV. It is contended that there is unpardonable inconsistency in enforcing foreign rights, whether of
prosecution or defence, and at the same time declaring that the foreign law is not in force here. The ground
has been gone over many times. The local law is that the foreign rights will be enforced. What those rights
are depends upon the facts, and a part of the facts consists in the law under which the transactions took
place.

But if it is still insisted that a proper designation of the process is that we thus enforce foreign law (Saloshin
v. Houle, 85 N.H. 126), it does not affect the soundness of the procedure. We enforce the foreign law
because it is our law that the foreign law shall govern the transactions in question. "For the purposes of the
case the foreign law becomes the local law." Saloshin v. Houle, supra, 130. It has been concluded that it
shall so govern for the reasons before stated. This is not importing foreign law. It is only giving to it the
legitimate effect upon transactions occurring where it is in force. The logical alternative is not found in the
application of local law to a foreign transaction, but in a refusal to deal with that transaction at all. If it is to
be justiciable here, it should be upon the basis of what it is there.

The other view, that to some indefinite degree our law should govern the foreign transaction, would export
our law into foreign territory. The reasonable conclusion which has been reached is that there should be
neither export nor import, that, generally speaking, the law is territorial, conceived of spatially as governing
within the jurisdiction, and creating there rights and obligations which will be respected and enforced
elsewhere. Judge Cardozo sums the matter up in a sentence. "The plaintiff owns something and we help
him to get it." Louks v. Company, 224 N.Y. 99, 110.

V. The critics of the American rule affect to find much inconsistency in the suggested refusal (Goodrich,
Conflict of Laws, 24; Am. Law Inst., Restat., Conflict of Laws, s. 7) to follow the lex loci as to the
applicability of foreign law to local transactions. The proposition advanced here is that if by the lex loci the
plaintiff could recover there if he would have that right by the law of his domicil, though not if domesticated,
he should recover in other jurisdictions, if they profess to apply the lex loci. This is upon the theory that the
whole or none of the lex loci should be applied.

It being the rule in some jurisdictions that in a suit by a non-resident upon a cause arising locally his
capacity to sue will be determined by looking to the law of his domicil rather than to the local law, it is urged
that this feature (called the doctrine of renvoi) should be treated the same as the rest of the lex loci. If that
law looks beyond local limitations to broader or otherwise different rules of the party's domicil, it is argued
that the same course should be followed by the court in another jurisdiction when called upon to adjudicate
disputes which arose under such circumstances. That is, in determining the applicability of foreign law, the
court should be governed by that foreign law as to the applicability of foreign law. This idea is urged as
calling for the recognition of renvoi under such circumstances. It has not as yet met with judicial approval.

We do not understand it is claimed that the doctrine of renvoi ought to be adopted. One of the authors upon
whose reasoning the plaintiff relies says: "The renvoi doctrine is, therefore, no part of the Conflict of Laws
of the United States. Its introduction into our law would be most unfortunate on account of the uncertainty
and confusion to which it would give rise in the administration of justice and its demoralizing effect upon the
future development of the Conflict of Laws." The Renvoi Theory (Lorenzen), 10 Col. Law Rev. 344. It is
advanced in argument here as a feature of existing law, in some foreign jurisdictions, and its recognition
where existing is urged as a logical part of the vested right theory, and as showing that, thus encumbered,
that theory should be rejected. It is unnecessary to determine the validity of the argument. If its soundness
were assumed, and recognition of renvoi should be treated as a part of our rule applying the lex loci, there
would be two sufficient answers here. The plea demurred to states "that under the laws of the State of
Maine, the plaintiff being the wife of said defendant is barred from maintaining this action." This leaves no
room for speculation upon the matter. Beyond this, it is conceded in the plaintiff's argument that there is no
decision in Maine bearing upon the doctrine of renvoi. Nor is there any claim that it is a part of a generally
prevailing common-law doctrine. If the matter were open for consideration, the plaintiff would fail for lack of
proof that the doctrine prevails in Maine.

But it will be said that these conclusions do not meet the whole issue. The argument that consideration of
renvoi should be a part of any theory of applying the lex loci, and that the theory thus embarrassed is
unworkable, has not been answered. The conclusion sought to be drawn from these propositions is that
they show that the whole theory of applying the lex loci is unsound and should therefore be abandoned,
and actions for foreign torts should be decided according to local law.

One answer to this is that the rule that the lex loci shall apply is so firmly established that it should be
followed, unless very grave defects therein call for reform. We see no such defects. Whether it should
include renvoi or not is a matter to be decided when a case arises which presents that question. In the
instant case there is no occasion to go further than to inquire whether the obstacle proposed is insuperable.
If it does not appear to be so, we need not be apprehensive that adherence to the present line of procedure
will unduly embarrass the court of the future when called upon to decide the propounded problem.

It is undoubtedly true that following the doctrine of renvoi to a logical extreme can, in some situations, result
in an endless reference back and forth. The dilemma thus presented is something of an answer to the
theorists who justify the application of the lex loci upon the idea of a vested right. The writers relied upon by
the plaintiff have used it largely for this limited purpose. They recognize the desirability of a general
application of the lex loci in actions for torts. Their quarrel has been with the theory of those who would
account for such procedure upon the basis of a vested right or obligatio.

Once the doctrine of obligatio is disregarded, and recognition of the lex loci is put upon its true foundation,
there is no difficulty. The lex loci is applied because this is deemed to be the sensible course to pursue.
When a point is reached where further application is futile and ridiculous the process is cut short.

No rule or set of rules has yet been devised which will make the conflict of laws a logical whole. There are
places where logic has to give way to evident facts. In these places horse sense has prevailed over the
deductions of the schoolmen. It should continue to do so.

Whether, upon the issue of applying foreign law we should follow our own views entirely, or adopt those
expressed in the lex loci which are pertinent, is, like most of the questions involved in this case, a matter of
what is sound policy. That problem will no doubt be solved in the future, and some definite rules will be
evolved, as there have been already on the main issue of following the lex loci.

As before stated, there is no occasion here to determine whether we should apply a Maine doctrine of
renvoi, since there is no evidence that such a doctrine exists.

VI. The novel complaint is made that the foregoing conclusions upon the application of the lex loci set up
fixed rules. The proposal is that instead thereof the whole matter be left to the discretion of the court to
apply either the foreign or the domestic law to the individual case as "reason, justice and expediency"
require. That might well be taken as the guide for determining what should be done in the first stages of the
development of the law. But as the law progresses definite rules are evolved in the course of the frequent
application of those tests. That is the situation here. It has become settled that reason, justice and
expediency require that causes of action for foreign torts be dealt with as hereinbefore indicated.

Exception overruled.

All concurred.
Alabama Great Southern R.R. Co. v. Carroll

Supreme Court of Alabama

11 So. 803 (1892)

Facts

W.D. Carroll (plaintiff), an Alabama citizen, was employed as a brakeman under an Alabama contract with
the Alabama Great Southern Railroad Company (Alabama Southern) (defendant). While working on a
freight train running from Alabama to Mississippi, Carroll was injured on account of a defective link between
two cars. The injury occurred in Mississippi, but Carroll alleged that its cause happened in Alabama.
Evidence showed that fellow employees of Carroll were negligent in failing to discover the defect or remedy
it. Carroll sued Alabama Southern in Alabama court. He alleged that the employment contract rendered
Alabama Southern subject to Alabama law even if Carroll were working outside of the state. If Mississippi
law were applicable, Alabama Southern could not be liable because Mississippi subscribed to the common
law rule that a master is not liable for harm to a servant caused by a fellow servant. An Alabama employers’
liability statute, however, modified the common law in that state so as to make a master liable for injury to a
servant. A jury decided in favor of Carroll. Alabama Southern appealed.

MARGARITE AUTEN, Appellant, v. HAROLD AUTEN, Respondent.

Court of Appeals of New York

308 N.Y. 155; 124 N.E.2d 99; 1954 N.Y. LEXIS 930; 50 A.L.R.2d 246

Argued October 22, 1954.

December 31, 1954, decided

PRIOR HISTORY: [***1]

Auten v. Auten, 281 App. Div. 740, reversed.
APPEAL from a judgment, entered December 1, 1953, upon an order of the Appellate Division of the
Supreme Court in the first judicial department, which (1) affirmed an order of the Supreme Court at Special
Term (SCHREIBER, J.), entered in New York County, granting a motion by defendant for summary
judgment dismissing the complaint and (2) granted leave to serve an amended complaint. (See 306 N.Y.
752.)

DISPOSITION: LEWIS, Ch. J., CONWAY, DESMOND, DYE, FROESSEL and VAN VOORHIS, JJ., concur.

Judgments reversed, etc.

HEADNOTES: Conflict of laws - husband and wife - repudiation of separation agreement - (1) wife and
husband entered into separation agreement in New York providing that husband pay stated amount
monthly for support of wife and children, that neither should sue in any action relating to separation, and
that wife should not sue in any jurisdiction by reason of prior Mexican divorce; thereafter wife sued for
separation in England; action herein by wife to recover arrears due her under agreement; husband's motion
for summary judgment based on defense that wife's separation action in England operated as repudiation
of agreement, [***2] denied; law of England applicable and thereunder issue exists as to effect of
commencement of separation action on separation agreement - (2) under "grouping of contacts" theory of
conflict of laws, English law would be applied - (3) parties could not have expected that law other than
English law would be applied - (4) moreover, under rule that matters of performance and breach are
governed by law of place of performance, English law would control - (5) husband's contention that wife's
commencement of English action amounted to breach of her covenant not to sue also governed by English
law.

1. Defendant husband, who had procured a Mexican divorce, and plaintiff wife entered into a separation
agreement in 1933 in New York providing that the husband pay a stated amount monthly to a New York
trustee for the account of his wife, for the support of herself and their children; that neither should sue "in
any action relating to their separation", and that the wife should not "cause any complaint to be lodged
against * * * [the husband], in any jurisdiction, by reason of the said alleged divorce". Immediately after the
signing of the agreement, the wife returned to England, where she [***3] has since lived with the children.
In 1934, the wife filed a petition for separation in an English court, but the action never proceeded to trial. In
1947, the wife brought the present action to recover arrears allegedly due her under the agreement. Since
the law of England must be applied, and since, at the least, an issue exists whether the courts of that
country treat the commencement of a separation action as a repudiation of an earlier-made separation
agreement, the husband's motion for summary judgment, based on his defense of an alleged repudiation
by the wife of the separation agreement, should not have been granted.

2. The "center of gravity" or "grouping of contacts" theory of the conflict of laws emphasizes the law of the
place which has the most significant contacts with the matter in dispute. Examination of the respective
contacts with New York and England indicates that the English law should be applied to determine the
effect to be given the wife's institution of the separation suit in England. The parties were married in
England, had children there and lived there as a family for fourteen years. The husband allegedly had
willfully deserted and abandoned the [***4] wife and children in England, and was in this country on a
temporary visa when the agreement was signed. The sole purpose of the wife's trip to New York was to
arrange for defendant to agree to support his family, and she returned to England immediately after the
agreement was executed. The agreement, effecting a separation between British subjects, was drawn with
an understanding that the wife and children would live in England. The only relation of this state with the
matter is that it is the place where the agreement was made and where the trustee had his office.

3. The parties could not have expected or believed that any law other than that of England would govern
the effect of the wife's institution of a separation action.

4. If the rule that matters of performance and breach are governed by the law of the place of performance
should be applied, the law of England would still control.

5. The husband's contention that plaintiff's commencement of the English action amounted to a material
breach of his wife's covenant not to sue, barring recovery on the agreement, is also governed by English
law.

OPINIONBY: FULD

OPINION: [*158] [**100] FULD, J. In this action to recover installments allegedly due for support and
maintenance under a separation agreement executed in this state in 1933, the wife's complaint has been
dismissed, on motion for summary judgment, upon the ground that her institution of an action for separation
in England constituted a repudiation and a rescission of the agreement under New [***8] York law.
Determination of the appeal, involving as it does a question of conflict of laws, requires examination of the
facts disclosed by the papers before us.

Married in England in 1917, Mr. and Mrs. Auten continued to live there with their two children until 1931. In
that year, according to plaintiff, defendant deserted her, came to this country and, in the following year,
obtained a Mexican divorce and proceeded to "marry" another woman. Unable to come to terms with the
ocean between them, plaintiff made a trip to New York City to see and talk to defendant about adjustment
of their differences. The outcome was the separation agreement of June, 1933, upon which the present
action is predicated. It obligated the husband to pay to a trustee, for the "account of" the wife, who was to
return to England, the sum of 50 a month for the support of herself and the children. In addition, the
agreement provided that the parties were to continue to live separate and apart, that neither should sue "in
any action relating to their separation" and that the wife should not "cause any complaint to be lodged
against * * * [the husband], in any jurisdiction, by reason of the said alleged [***9] divorce or remarriage".

Immediately after the agreement was signed, plaintiff returned to England, where she has since lived with
her children, and it is alleged by her - but disputed by defendant - that the latter is also domiciled in that
country. Be that as it may, defendant failed to live up to his agreement, making but a few payments under
it, with the result that plaintiff was left more or less destitute in England with the children. About a year after
the agreement had been executed, in August of 1934, plaintiff filed a petition for separation in an English
court, charging defendant with adultery. Defendant was served in New York with process in that suit on
December 4, 1936, and, in July, 1938, an order was entered requiring defendant to pay alimony pendente
lite. This English action - which, we are told [*159] never proceeded to trial - was instituted upon advice of
English counsel that it "was the only method" by which she "could collect money" from defendant; it was
done, plaintiff expressly declares, to "enable" her "to enforce" the separation agreement, and not with any
thought or intention of repudiating it.

The years passed, and in 1947, having realized [***10] nothing as a result of the English action and little
by reason of the New York separation agreement, plaintiff brought the present suit to recover the sum of
$26,564, which represents the amount allegedly due her, under the agreement, from January 1, 1935 to
September 1, 1947.

[**101] In his answer, defendant admitted making the agreement, but, by way of a separate defense - one
of several - claimed that plaintiff's institution of the separation suit in England operated as a repudiation of
the agreement and effected a forfeiture of her right to any payments under it. Following a motion by the wife
for summary judgment and a cross motion by the husband for like relief, the court at Special Term granted
the husband's cross motion and dismissed the complaint. The Appellate Division affirmed, with leave to the
wife, however, to serve an amended complaint, asserting any cause of action which accrued prior to the
date of the commencement of the English suit. The ensuing judgment, dismissing all of the wife's claims
which accrued subsequent to that date, is a final judgment of modification, and the wife's appeal therefrom
is properly before us as of right. (306 N.Y. 752; see, also, [***11] Cohen and Karger, Powers of the New
York Court of Appeals, pp. 88-91, 222-223.)

Both of the courts below, concluding that New York law was to be applied, held that under such law
plaintiff's commencement of the English action and the award of temporary alimony constituted a rescission
and repudiation of the separation agreement, requiring dismissal of the complaint. Whether that is the law
of this state, or whether something more must be shown to effect a repudiation of the agreement (cf.
Hettich v. Hettich, 304 N.Y. 8, 13-14; Woods v. Bard, 285 N.Y. 11; Butler v. Butler, 206 App. Div. 214),
need not detain us, since in our view it is the law of England, not that of New York, which is here
controlling.

Choosing the law to be applied to a contractual transaction with elements in different jurisdictions is a
matter not free from [*160] difficulty. The New York decisions evidence a number of different approaches
to the question. (See, e.g., Jones v. Metropolitan Life Ins. Co., 158 Misc. 466.)

Most of the cases rely upon the generally accepted rules that "All matters bearing upon the execution, the
interpretation and the validity of contracts [***12] * * * are determined by the law of the place where the
contract is made", while "All matters connected with its performance * * * are regulated by the law of the
place where the contract, by its terms, is to be performed." ( Swift & Co. v. Bankers Trust Co., 280 N.Y.
135, 141; Union Nat. Bank v. Chapman, 169 N.Y. 538, 543; see, also, Zwirn v. Galento, 288 N.Y. 428;
United States Mtge. & Trust Co. v. Ruggles, 258 N.Y. 32, 38; Restatement, Conflict of Laws, §§ 332, 358;
Goodrich on Conflict of Laws [2d ed., 1938], p. 293.) What constitutes a breach of the contract and what
circumstances excuse a breach are considered matters of performance, governable, within this rule, by the
law of the place of performance. (See Richard v. American Union Bank, 241 N.Y. 163, 166-167;
Restatement, Conflict of Laws, § 370; Goodrich, op. cit., p. 293.)

Many cases appear to treat these rules as conclusive. Others consider controlling the intention of the
parties and treat the general rules merely as presumptions or guideposts, to be considered along with all
the other circumstances. (See Wilson v. Lewiston Mill Co., 150 N.Y. 314, 322-323; Stumpf [***13] v.
Hallahan, 101 App. Div. 383, 386, affd. 185 N.Y. 550; Grand v. Livingston, 4 App. Div. 589, affd. 158 N.Y.
688.) And still other decisions, including the most recent one in this court, have resorted to a method - first
employed to rationalize the results achieved by the courts in decided cases (see Barber Co. v. Hughes, 223
Ind. 570, 586) - which has come to be called the "center of gravity" or the "grouping of contacts" theory of
the conflict of laws. Under this theory, the courts, instead of regarding as conclusive [**102] the parties'
intention or the place of making or performance, lay emphasis rather upon the law of the place "which has
the most significant contacts with the matter in dispute". ( Rubin v. Irving Trust Co., 305 N.Y. 288, 305; see,
also, Jones v. Metropolitan Life Ins. Co., supra, 158 Misc. 466, 469-470; Jansson v. Swedish American
Line, 185 F. 2d 212; [*161] Barber Co. v. Hughes, supra, 223 Ind. 570; Boissevain v. Weil, [1949] 1 K.B.
482, 490-492; Cook, "Contracts" and the Conflict of Laws: "Intention" of the Parties, 32 Ill. L. Rev. 899, 918-
919; Harper, Policy Bases of the Conflict of [***14] Laws: Reflections on Rereading Professor Lorenzen's
Essays, 56 Yale L.J. 1155, 1163-1168; Note, Choice of Law Problems in Direct Actions Against
Indemnification Insurers, 3 Utah L. Rev. 490, 498-499.)
Although this "grouping of contacts" theory may, perhaps, afford less certainty and predictability than the
rigid general rules (see Note, op. cit., 3 Utah L. Rev. 490, 498), the merit of its approach is that it gives to
the place "having the most interest in the problem" paramount control over the legal issues arising out of a
particular factual context, thus allowing the forum to apply the policy of the jurisdiction "most intimately
concerned with the outcome of [the] particular litigation" (3 Utah L. Rev., pp. 498-499). Moreover, by
stressing the significant contacts, it enables the court, not only to reflect the relative interests of the several
jurisdictions involved (see Vanston Committee v. Green, 329 U.S. 156, 161-162), but also to give effect to
the probable intention of the parties and consideration to "whether one rule or the other produces the best
practical result". ( Swift & Co. v. Bankers Trust Co., supra, 280 N.Y. 135, 141; see Vanston
Committee [***15] v. Green, supra, 329 U.S. 156, 161-162.)

Turning to the case before us, examination of the respective contacts with New York and England compels
the conclusion that it is English law which must be applied to determine the impact and effect to be given
the wife's institution of the separation suit n1. It hardly needs stating that it is England which has all the truly
significant contacts, while this state's sole nexus with the matter in dispute - entirely fortuitous, at that - is
that it is the place where the agreement was made and where the trustee, to whom the moneys were in the
first [*162] instance to be paid, had his office. The agreement effected a separation between British
subjects, who had been married in England, had children there and lived there as a family for fourteen
years. It involved a husband who, according to the papers before us, had willfully deserted and abandoned
his wife and children in England and was in the United States, when the agreement was signed, merely on
a temporary visa. And it concerned an English wife who came to this country at that time because it was
the only way she could see her husband to discuss their differences. The sole [***16] purpose of her trip to
New York was to get defendant to agree to the support of his family, and she returned to England
immediately after the agreement was executed. While the moneys were to be paid through the medium of a
New York trustee, such payments were "for account of" the wife and children, who, it was thoroughly
understood, were to live in England. The agreement is instinct with that understanding; not only does it
speak in terms of English currency in providing for payments to the wife, not only does it recite that the first
payment be made to her "immediately before sailing for England", but it specifies that the husband may visit
the children "if he should go to England".

n1. Our decision in Rennie v. Rennie (287 N.Y. 86) casts no light on the problem. The court did not there
consider whether it is the law of the place where the separation agreement was made or of the jurisdiction
where the separation suit or other judicial proceeding was brought which determines the effect that such
action may have upon the agreement.

[**103] In short, then, the agreement determined and fixed the marital responsibilities of an English
husband and father and provided [***17] for the support and maintenance of the allegedly abandoned wife
and children who were to remain in England. It merely substituted the arrangements arrived at by voluntary
agreement of the parties for the duties and responsibilities of support that would otherwise attach by
English law. There is no question that England has the greatest concern in prescribing and governing those
obligations, and in securing to the wife and children essential support and maintenance. And the paramount
interest of that country is not affected by the fact that the parties separate and provide for such support by a
voluntary agreement. It is still England, as the jurisdiction of marital domicile and the place where the wife
and children were to be, that has the greatest concern in defining and regulating the rights and duties
existing under that agreement, and, specifically, in determining the circumstances that effect a termination
or repudiation of the agreement.

[*163] Nor could the parties have expected or believed that any law other than England's would govern the
effect of the wife's institution of a separation action. It is most unlikely that the wife could have intended to
subject her [***18] rights under English law to the law of a jurisdiction several thousand miles distant, with
which she had not the slightest familiarity. On the contrary, since it was known that she was returning to
England to live, both parties necessarily realized that any action which she took, whether in accordance
with the agreement or in violation of it, would have to occur in England. If any thought was given to the
matter at all, it was that the law of the place where she and the children would be should determine the
effect of acts performed by her.

It is, perhaps, not inappropriate to note that, even if we were not to place our emphasis on the law of the
place with the most significant contacts, but were instead simply to apply the rule that matters of
performance and breach are governed by the law of the place of performance, the same result would
follow. Whether or not there was a repudiation, essentially a form of breach (see Restatement, Contracts,
§ 318; 4 Corbin on Contracts [1951], § 954, pp. 829-834), is also to be determined by the law of the place
of performance (cf. Wester v. Casein Co. of America, 206 N.Y. 506; Restatement, Conflict of Laws, § 370,
Caveat [***19] ), and that place, so far as the wife's performance is concerned, is England. Whatever she
had to do under the agreement - "live separate and apart from" her husband, "maintain, educate and
support" the children and refrain from bringing "any action relating to [the] separation" - was to be done in
England. True, the husband's payments were to be made to a New York trustee for forwarding to plaintiff in
England, but that is of no consequence in this case. It might be, if the question before us involved the
manner or effect of payment to the trustee, but that is not the problem; we are here concerned only with the
effect of the wife's performance. (Cf. Zwirn v. Galento, supra, 288 N.Y. 428, 433.)

Since, then, the law of England must be applied, and since, at the very least, an issue exists as to whether
the courts of that country treat the commencement of a separation action as a [*164] repudiation of an
earlier-made separation agreement, summary judgment should not have been granted n2.

n2. In point of fact, the English lawyers, whose affidavits have been submitted by plaintiff, unequivocally
opine that the institution of a separation suit and the award of alimony pendente lite did not, under the law
of England, constitute a repudiation of the separation agreement or bar the present action to recover
amounts due under it. [***20]

As to defendant's further contention that, in any event, plaintiff's commencement of the English action
amounted to a [**104] material breach of her covenant not to sue, barring recovery upon the agreement,
we need but say that this question, too, must be governed by English law, and for the same reasons
already set forth.

The judgment of the Appellate Division and that of Special Term insofar as they dismiss the complaint
should be reversed, with costs in all courts, and the matter remitted for further proceedings in accordance
with this opinion.

Haag vs. barnes

This paternity proceeding was instituted pursuant to section 64 of the New York City Criminal Courts Act.
The complaint was dismissed on motion on the ground that a contract previously entered into between the
parties, in Illinois, was a bar to this proceeding. Complainant appeals from such determination.

Complainant, then and since 1947 a resident of New York, met defendant, a resident of Illinois, in 1954. At
that time complainant was employed as a law secretary. Acquaintance ripened into friendship and,
complainant alleges, from and as a result of the association a child was born to her in Illinois, December
11, 1955.

On January 12, 1956, the parties entered into an agreement in Illinois by which defendant undertook to pay
the sum of $275 per month for the support of complainant and the infant. The agreement provided that it
should "in all respects be interpreted, construed and governed by the laws of the State of

[11 A.D.2d 432]

Illinois", and it contained a provision that complainant should reside in Illinois for two years thereafter unless
she obtained the written consent of defendant to live elsewhere. The agreement, which did not
acknowledge paternity, was valid under the then laws of Illinois (Rev. Stat. of Ill., ch. 17, § 18, as amd.).
Both parties were represented by counsel of their own choosing.

It is not disputed that defendant, apparently a person of means, has paid substantially more than the sums
called for by the agreement. It appears also, though the infant was born in Illinois, that complainant for a
period prior to the birth and for two years thereafter lived in California.

Defendant sought dismissal of the complaint pursuant to section 63 of the New York City Criminal Courts
Act and section 121 of the Domestic Relations Law, contending that a binding agreement had been entered
providing for generous support of the child, which defendant had fully performed and even provided
additional support.
On appeal, appellant asserts that the laws of New York do not bar this proceeding but impose obligations
on the defendant, and that the Illinois statute does not bar this proceeding because it expresses a policy
different from and contrary to the laws of New York. She contends also that the most significant contacts
are in New York.

Defendant, a resident of Illinois, contends the agreement is governed by the laws of Illinois, was valid there,
is not contrary to the public policy of New York, and should control.

"As a general rule, the validity of a contract is determined by the law of the jurisdiction where made, and if
legal there is generally enforcible anywhere. There is, however, a well-established exception to the rule to
the effect that a court will not enforce a contract though valid where made if its enforcement is contrary to
the policy of the forum. (People v. Martin, 175 N.Y. 315; Williston on Contracts, vol. 3, § 1792.)" (Straus &
Co. v. Canadian Pacific Ry. Co., 254 N.Y. 407, 414; Restatement, Conflict of Laws, § 332.)

"Public policy is necessarily variable. It changes with changing conditions. It is evidenced by the expression
of the will of the Legislature contained in statutory enactments." (Straus & Co. v. Canadian Pacific Ry. Co.,
supra, p. 413.)

Certainly the policy of the forum (New York) is not offended by the mere fact that the parties entered into an
agreement. Section 63 of the New York City Criminal Courts Act recognizes that the parties may agree or
compromise for support of either the mother or the child. It places a restriction upon the effect of such
agreement by providing that it shall not be binding

[11 A.D.2d 433]

until the court "shall have determined that adequate provision has been made and is fully secured and shall
have approved said agreement or compromise."

Is the fact that at the time the agreement was entered into the Illinois statute provided for release from all
legal liability without judicial approval upon payment of a stated sum sufficient to warrant a holding that
such agreement will not be recognized or enforced as contrary to the public policy of this State? The Illinois
statute at the time of the agreement read as follows: "§ 18 Release of reputed father by mother of child.
The mother of a bastard child, before or after its birth, may release the reputed father of such child from all
legal liability on account of such bastardy, upon such terms as may be consented to in writing by the judge
of the court having jurisdiction herein of the county in which such mother resides: Provided, a release
obtained from such mother in consideration of a payment to her of a sum of money less than eight hundred
dollars in the absence of the written consent of the judge of the court having jurisdiction herein, shall not be
a bar to a suit for bastardy against such father, but if, after such release is obtained, suit be instituted
against such father and the issue be found against him, he shall be entitled to a set-off for the amount so
paid, and it shall be accredited to him as of the first payment or payments: And, provided, further, that such
father may compromise all his legal liability on account of such bastard child, with the mother thereof,
without the written consent of such judge, by paying to her any sum not less than eight hundred dollars." (L.
1871-1872, p. 198; § 18, added by L. 1889, p. 61, § 1, amd. June 28, 1919 by L. 1919, p. 422, § 1.)

The agreement recites that the defendant had advanced in excess of $2,000 to complainant prior to its
execution, agreed to and did pay $800 counsel fees, and the amount of support agreed upon was not
predicated upon the minimal provided by the statute, and such payments are to be continued until the infant
reaches the age of 16 years. The sums paid were in excess of that provided for by the agreement and
cannot be said to be inadequate. Under such conditions it is the agreement and not the statute which
should govern the attitude of our courts so that the rule and not the exception should apply. If no policy of
the forum is offended, comity and good morals should require recognition of the agreement, as well as the
requirement that full faith and credit be accorded the statute, a public act, and agreements executed
thereunder. (U. S. Const., art. IV, § 1.)

Since the defendant was a resident of Illinois, the appellant executed the agreement there and the
payments exceeded the

[11 A.D.2d 434]

minimum requisite to obtain judicial approval in Illinois, the failure to obtain the written consent of a judge
may be considered as a mere formality insufficient to render the law inapplicable or to invalidate the
agreement. (Cf. Rhyne v. Katleman, 206 Misc. 202, affd. 285 App. Div. 1140.)

The object of the Illinois statute and of our public policy, as expressed by statute where a natural child is
involved, is to provide for the support and welfare of such child, and to assure that the child will not become
a public charge. (See New York City Criminal Courts Act, § 62; Domestic Relations Law, § 120.) The
support obligation of a father of a child born out of wedlock is purely by virtue of statute, and when, by
agreement and performance thereunder, adequate support is assured, no public policy of the State is
offended. The mere fact that a father may be wealthy, while a proper item for consideration, is not the sole
criterion. (Cf. Schaschlo v. Taishoff, 2 N.Y.2d 408.) Nor will it alone warrant the application of another and
different law to that generally governing the validity of contracts. While the appellant adverts to the Auten
case (Auten v. Auten, 308 N.Y. 155) that case affords no support for her position and may be distinguished
readily. The parties there, prior to and subsequently, were residents of England. The agreement was
executed in New York for convenience, but at the time of execution the parties realized, recognized and
contemplated that the payments would necessarily be expended in England. The "most significant contacts
with the matter in dispute was England."

In the instant case both parties were represented by counsel and the agreement expressly provides that it
shall "in all respects be interpreted, construed and governed by the laws of the State of Illinois." The
appellant was not so unfamiliar with legal process as is the average layman for she had worked as a law
secretary. Moreover, looking to the facts as recited in her affidavit she resided in California for some
months before the birth of the child on December 11, 1955, and for a period of approximately two years
thereafter. The complaint is sworn to February 28, 1959. It is obvious that the most significant contacts
were not New York. Nor can New York fairly be said to have the "most interest in the problem" to the
exclusion of or paramount to the interests of Illinois.

In the case before us there is capacity, mutual assent, designation of the State whose law shall govern, a
grouping of the elements which indicate that up to the institution of this proceeding the more significant
contacts had been Illinois, and no

[11 A.D.2d 435]

provision so offensive to our public policy as to warrant our rejection of the agreement. (See, generally,
Beale, Conflict of Laws, §§ 332.2, 332.3, 347.2 et seq.)

The order appealed from should be affirmed on the law, the facts and in the exercise of discretion, without
costs to either party.

BASTOW, J. (dissenting).

The appellant filed a complaint in the Court of Special Sessions alleging that she was a resident of the City
of New York and that respondent is the father of her child born out of wedlock in December, 1955.
Defendant moved to dismiss the complaint upon the ground that there was in existence a binding
agreement between the parties that was a bar to this action. The motion was granted.

It appears that defendant is a man of considerable wealth residing in the State of Illinois but sojourning from
time to time in New York. The parties met in this State in 1954 where complainant had resided since 1947.
During her pregnancy complainant went to Illinois at the invitation of defendant where the child was born.
Thereafter, she returned to this State but acting upon instructions of defendant's attorney returned to
Illinois.

There in January, 1956 the parties entered into an elaborate agreement covering some 12 pages in the
printed record. The agreement recites that both parties were of Chicago but appellant claims that she is
and has been a resident of this State. The agreement was signed by appellant in Illinois but she swears
and defendant does not deny that he executed the contract in this State. It is conceded that the agreement
was never approved by any court of competent jurisdiction.

The motion to dismiss was granted in an opinion of two sentences stating that the agreement was a bar to
the present action. We are unable to agree with this summary disposition of the matter. It may be surmised
that this conclusion was reached by virtue of the provisions of section 63 of the New York City Criminal
Courts Act, section 121 of the Domestic Relations Law and the pertinent Illinois statute. (Rev. Stat. of Ill.,
ch. 17, § 18, in effect prior to July 5, 1957.) The latter statute stated in substance that court approval of
such a compromise was not required if the agreement provided for the payment to the mother of any sum
not less than $800. All of this was repealed in 1957 and the foreign State now operates under a statute
more similar to ours.

If it could be found as a fact that complainant was at all times from December, 1955 to the present a
resident of this

[11 A.D.2d 436]

State we would have presented the issue as to whether the agreement could bar the present proceeding,
since it is contrary to the public policy of this State. Such public policy of this State in this area of the law
has been recently stated (cf. Schaschlo v. Taishoff, 2 N.Y.2d 408, 411). If such residence was established
the fact that the agreement provides that it shall be governed by the laws of Illinois would not necessarily
prevent the courts of this State from exploring its validity inasmuch as the agreement has not been judicially
approved. It has recently been stated that "The validity of a contract is determined by the local law of the
state chosen by the parties for this purpose unless * * * (c) application of the chosen law would be contrary
to a fundamental policy of the state which would be the state of the governing law in the absence of an
effective choice by the parties." (Restatement, 2d, Conflict of Laws, Tentative Draft No. 6, § 332-a.)

Here there was sufficient contact with this State by the contracting parties to at least require further
exploration of the facts. It must be conceded that the present record is inadequate to make a determination.
It is not clear from the affidavits before us as to the exact residence of the complainant during the years
from 1955 to the present. She claims residence in this State from 1947 to the present "except for a
residence in California as will be shown" in the affidavit. The ensuing statements as to residence in
California are vague and indefinite. She was there from some indefinite period before the birth of the child.
After the agreement was executed she received permission from defendant — in conformity with the
agreement — to go to California where she lived for approximately two years.

In our opinion there should not have been a summary dismissal of the proceeding. It should be remitted to
the Court of Special Sessions for a hearing and proper findings as to complainant's residence at the time of
executing the agreement and during the ensuing years to the commencement of this proceeding.
Thereupon, a disposition might be made of the motion to dismiss giving full consideration to the rights of
the parties and the public policy of this State.

Order, entered on March 11, 1960, granting defendant's motion to dismiss the complaint affirmed, without
costs.
Babcock vs. Jackson

FULD, J.

On Friday, September 16, 1960, Miss Georgia Babcock and her friends, Mr. and Mrs. William Jackson, all
residents of Rochester, left that city in Mr. Jackson's automobile, Miss Babcock as guest, for a week-end
trip to Canada. Some hours later, as Mr. Jackson was driving in the Province of Ontario, he apparently lost
control of the car; it went off the highway into an adjacent stone wall, and Miss Babcock was seriously
injured. Upon her return to this State, she brought [*477] the present action against William Jackson,
alleging negligence on his part in operating his automobile. [1]

At the time of the accident, there was in force in Ontario a statute providing that "the owner or driver of a
motor vehicle, other than a vehicle operated in the business of carrying passengers for compensation, is
not liable for any loss or damage resulting from bodily injury to, or the death of any person being carried in *
* * the motor vehicle" (Highway Traffic Act of Province of Ontario [Ontario Rev. Stat. (1960), ch. 172], §105,
subd. [2]). Even though no such bar is recognized under this State's substantive law of torts (see, e.g.,
Higgins v. Mason, 255 N. Y. 104, 108; Nelson v. Nygren, 259 N. Y. 71), the defendant moved to dismiss
the complaint on the ground that the law of the place where the accident occurred governs and that
Ontario's guest statute bars recovery. The court at Special Term, agreeing with the defendant, granted the
motion and the Appellate Division, over a strong dissent by Justice Halpern, affirmed the judgment of
dismissal without opinion.

The question presented is simply drawn. Shall the law of the place of the tort [2] invariably govern the
availability of relief for the tort or shall the applicable choice of law rule also reflect a consideration of other
factors which are relevant to the purposes served by the enforcement or denial of the remedy?

The traditional choice of law rule, embodied in the original Restatement of Conflict of Laws (§ 384), and
until recently unquestioningly followed in this court (see, e.g., Poplar v. Bourjois, Inc., 298 N. Y. 62, 66;
Kaufman v. American Youth Hostels, 5 N Y 2d 1016,modfg. 6 A D 2d 223), has been that the substantive
rights and liabilities arising out of a tortious occurrence are determinable by the law of the place of the tort.
(See Goodrich, Conflict of Laws [3d ed., 1949], p. 260; Leflar, The Law of Conflict of Laws [1959], p. 207;
Stumberg, Principles of Conflict of Laws [2d ed., 1951], p. 182.) It had its conceptual foundation in the
vested rights doctrine, namely, that a right to recover for a foreign tort owes its creation to the law of the
[*478] jurisdiction where the injury occurred and depends for its existence and extent solely on such law.
(See Hancock, Torts in the Conflict of Laws [1942], pp. 30-36; Reese, The Ever Changing Rules of Choice
of Law, Nederlands Tijdschrift Voor Internationaal Recht [1962], 389.) Although espoused by such great
figures as Justice Holmes (see Slater v. Mexican Nat. R. R. Co., 194 U. S. 120) and Professor Beale (2
Conflict of Laws [1935], pp. 1286-1292), the vested rights doctrine has long since been discredited because
it fails to take account of underlying policy considerations in evaluating the significance to be ascribed to
the circumstance that an act had a foreign situs in determining the rights and liabilities which arise out of
that act. [3]"The vice of the vested rights theory", it has been aptly stated, "is that it affects to decide
concrete cases upon generalities which do not state the practical considerations involved". (Yntema, The
Hornbook Method and the Conflict of Laws, 37 Yale L. J. 468, 482-483.) More particularly, as applied to
torts, the theory ignores the interest which jurisdictions other than that where the tort occurred may have in
the resolution of particular issues. It is for this very reason that, despite the advantages of certainty, ease of
application and predictability which it affords (see Cheatham and Reese, Choice of the Applicable Law, 52
Col. L. Rev. 959, 976), there has in recent years been increasing criticism of the traditional rule by
commentators [4]and a judicial trend towards its abandonment or modification. [5][*479]

Significantly, it was dissatisfaction with "the mechanical formulae of the conflicts of law" (Vanston
Committee v. Green, 329 U. S. 156, 162) which led to judicial departure from similarly inflexible choice of
law rules in the field of contracts, grounded, like the torts rule, on the vested rights doctrine. According to
those traditional rules, matters bearing upon the execution, interpretation and validity of a contract were
determinable by the internal law of the place where the contract was made, while matters connected with
their performance were regulated by the internal law of the place where the contract was to be performed.
(See Swift & Co. v. Bankers Trust Co., 280 N. Y. 135, 141; see, also, Restatement, Conflict of Laws, §§
332, 358; Goodrich, Conflict of Laws [3d ed., 1949], pp. 342-343.)
In Auten v. Auten (308 N. Y. 155), however, this court abandoned such rules and applied what has been
termed the "center of gravity" or "grouping of contacts" theory of the conflict of laws. "Under this theory," we
declared in the Auten case, "the courts, instead of regarding as conclusive the parties' intention or the place
of making or performance, lay emphasis rather upon the law of the place 'which has the most significant
contacts with the matter in dispute' " (308 N. Y., at p. 160). The "center of gravity" rule of Auten has not only
been applied in other cases in this State, [6]as well as in other jurisdictions, [7]but has supplanted the prior
rigid and set contract rules in the most current draft of the Restatement of Conflict of Laws. (See
Restatement, Second, Conflict of Laws, § 332b [Tentative Draft No. 6, 1960].)

Realization of the unjust and anomalous results which may ensue from application of the traditional rule in
tort cases has also prompted judicial search for a more satisfactory alternative in that area. In the much
discussed case of Kilberg v. Northeast Airlines (9 N Y 2d 34), this court declined to apply the law of the
place of the tort as respects the issue of the quantum of the recovery in a death action arising out of an
airplane crash, [*480] where the decedent had been a New York resident and his relationship with the
defendant airline had originated in this State. In his opinion for the court, Chief Judge Desmond described,
with force and logic, the shortcomings of the traditional rule (9 N Y 2d, at p. 39):

"Modern conditions make it unjust and anomalous to subject the traveling citizen of this State to the varying
laws of other States through and over which they move. * * * An air traveler from New York may in a flight of
a few hours' duration pass through * * * commonwealths [limiting death damage awards]. His plane may
meet with disaster in a State he never intended to cross but into which the plane has flown because of bad
weather or other unexpected developments, or an airplane's catastrophic descent may begin in one State
and end in another. The place of injury becomes entirely fortuitous. Our courts should if possible provide
protection for our own State's people against unfair and anachronistic treatment of the lawsuits which result
from these disasters."

The emphasis in Kilberg was plainly that the merely fortuitous circumstance that the wrong and injury
occurred in Massachusetts did not give that State a controlling concern or interest in the amount of the tort
recovery as against the competing interest of New York in providing its residents or users of transportation
facilities there originating with full compensation for wrongful death. Although the Kilberg case did not
expressly adopt the "center of gravity" theory, its weighing of the contacts or interests of the respective
jurisdictions to determine their bearing on the issue of the extent of the recovery is consistent with that
approach. (See Leflar, Conflict of Laws, 1961 Ann. Sur. Amer. Law, 29, 45.)

The same judicial disposition is also reflected in a variety of other decisions, some of recent date, others of
earlier origin, relating to workmen's compensation, [8]tortious occurrences aristing [*481] out of a contract,
[9]
issues affecting the survival of a tort right of action [10]and intrafamilial immunity from tort [11]and situations
involving a form of statutory liability. [12]These numerous cases differ in many ways but they are all similar in
two important respects. First, by one rationale or another, they rejected the inexorable application of the law
of the place of the tort where that place has no reasonable or relevant interest in the particular issue
involved. And, second, in each of these cases the courts, after examining the particular circumstances
presented, applied the law of some jurisdiction other than the place of the tort because it had a more
compelling interest in the application of its law to the legal issue involved.

The "center of gravity" or "grouping of contacts" doctrine adopted by this court in conflicts cases involving
contracts impresses us as likewise affording the appropriate approach for accommodating the competing
interests in tort cases with multi-State contacts. Justice, fairness and "the best practical result" (Swift & Co.
v. Bankers Trust Co., 280 N. Y. 135, 141, supra) may best be achieved by giving controlling effect to the
law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has
the greatest concern with the specific issue raised in the litigation. The merit of such a rule is that "it gives
to the place 'having the most interest in the problem' paramount control over the legal issues arising out of
a particular factual context" and thereby allows the forum to apply "the policy of the jurisdiction 'most [*482]
intimately concerned with the outcome of [the] particular litigation.' " (Auten v. Auten, 308 N. Y. 155, 161,
supra.)

Such, indeed, is the approach adopted in the most recent revision of the Conflict of Laws Restatement in
the field of torts. According to the principles there set out, "The local law of the state which has the most
significant relationship with the occurrence and with the parties determines their rights and liabilities in tort"
(Restatement, Second, Conflict of Laws, § 379[1]; also Introductory Note to Topic 1 of Chapter 9, p. 3
[Tentative Draft No. 8, 1963]), and the relative importance of the relationships or contacts of the respective
jurisdictions is to be evaluated in the light of "the issues, the character of the tort and the relevant purposes
of the tort rules involved" (§ 379[2], [3]).

Comparison of the relative "contacts" and "interests" of New York and Ontario in this litigation, vis-a-vis the
issue here presented, makes it clear that the concern of New York is unquestionably the greater and more
direct and that the interest of Ontario is at best minimal. The present action involves injuries sustained by a
New York guest as the result of the negligence of a New York host in the operation of an automobile,
garaged, licensed and undoubtedly insured in New York, in the course of a week-end journey which began
and was to end there. In sharp contrast, Ontario's sole relationship with the occurrence is the purely
adventitious circumstance that the accident occurred there.

New York's policy of requiring a tort-feasor to compensate his guest for injuries caused by his negligence
cannot be doubted — as attested by the fact that the Legislature of this State has repeatedly refused to
enact a statute denying or limiting recovery in such cases (see, e.g., 1930 Sen. Int. No. 339, Pr. No. 349;
1935 Sen. Int. No. 168, Pr. No. 170; 1960 Sen. Int. No. 3662, Pr. No. 3967) — and our courts have neither
reason nor warrant for departing from that policy simply because the accident, solely affecting New York
residents and arising out of the operation of a New York based automobile, happened beyond its borders.
Per contra, Ontario has no conceivable interest in denying a remedy to a New York guest against his New
York host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law. The
object of Ontario's guest statute, it has been said, is "to prevent the fraudulent assertion [*483] of claims by
passengers, in collusion with the drivers, against insurance companies" (Survey of Canadian Legislation, 1
U. Toronto L. J. 358, 366) and, quite obviously, the fraudulent claims intended to be prevented by the
statute are those asserted against Ontario defendants and their insurance carriers, not New York
defendants and their insurance carriers. Whether New York defendants are imposed upon or their insurers
defrauded by a New York plaintiff is scarcely a valid legislative concern of Ontario simply because the
accident occurred there, any more so than if the accident had happened in some other jurisdiction.

It is hardly necessary to say that Ontario's interest is quite different from what it would have been had the
issue related to the manner in which the defendant had been driving his car at the time of the accident.
Where the defendant's exercise of due care in the operation of his automobile is in issue, the jurisdiction in
which the allegedly wrongful conduct occurred will usually have a predominant, if not exclusive, concern. In
such a case, it is appropriate to look to the law of the place of the tort so as to give effect to that
jurisdiction's interest in regulating conduct within its borders, and it would be almost unthinkable to seek the
applicable rule in the law of some other place.

The issue here, however, is not whether the defendant offended against a rule of the road prescribed by
Ontario for motorists generally or whether he violated some standard of conduct imposed by that
jurisdiction, but rather whether the plaintiff, because she was a guest in the defendant's automobile, is
barred from recovering damages for a wrong concededly committed. As to that issue, it is New York, the
place where the parties resided, where their guest- host relationship arose and where the trip began and
was to end, rather than Ontario, the place of the fortuitous occurrence of the accident, which has the
dominant contacts and the superior claim for application of its law. Although the rightness or wrongness of
defendant's conduct may depend upon the law of the particular jurisdiction through which the automobile
passes, the rights and liabilities of the parties which stem from their guest-host relationship should remain
constant and not vary and shift as the automobile proceeds from place to place. Indeed, such a result, we
note, [*484] accords with "the interests of the host in procuring liability insurance adequate under the
applicable law, and the interests of his insurer in reasonable calculability of the premium." (Ehrenzweig,
Guest Statutes in the Conflict of Laws, 69 Yale L. J. 595, 603.)

Although the traditional rule has in the past been applied by this court in giving controlling effect to the
guest statute of the foreign jurisdiction in which the accident occurred (see, e.g., Smith v. Clute, 277 N. Y.
407; Kerfoot v. Kelley, 294 N. Y. 288; Naphtali v. Lafazan, 8 N Y 2d 1097, affg. 8 A D 2d 22), it is not amiss
to point out that the question here posed was neither raised nor considered in those cases and that the
question has never been presented in so stark a manner as in the case before us with a statute so unique
as Ontario's. [13]Be that as it may, however, reconsideration of the inflexible traditional rule persuades us, as
already indicated, that, in failing to take into account essential policy considerations and objectives, its
application may lead to unjust and anomalous results. This being so, the rule, formulated as it was by the
courts, should be discarded. (Cf. Bing v. Thunig, 2 N Y 2d 656, 667; Woods v. Lancet, 303 N. Y. 349, 355.)
[14]

In conclusion, then, there is no reason why all issues arising out of a tort claim must be resolved by
reference to the law of the same jurisdiction. Where the issue involves standards of conduct, it is more than
likely that it is the law of the place of the tort which will be controlling but the disposition of other issues
must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the
strongest interest in the resolution of the particular issue presented. [*485]

The judgment appealed from should be reversed, with costs, and the motion to dismiss the complaint
denied.
G.R. No. L-35694 December 23, 1933

ALLISON G. GIBBS, petitioner-appelle,

vs.
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, oppositor-appellant.
THE REGISTER OF DEEDS OF THE CITY OF MANILA, respondent-appellant.

Office of the Solicitor-General Hilado for appellants.

Allison D. Gibbs in his own behalf.

BUTTE, J.:

This is an appeal from a final order of the Court of First Instance of Manila, requiring the register of deeds
of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331, covering lands located in
the City of Manila, Philippine Islands, and issue in lieu thereof new certificates of transfer of title in favor of
Allison D. Gibbs without requiring him to present any document showing that the succession tax due under
Article XI of Chapter 40 of the Administrative Code has been paid.

The said order of the court of March 10, 1931, recites that the parcels of land covered by said certificates of
title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva Johnson Gibbs; that the
latter died intestate in Palo Alto, California, on November 28, 1929; that at the time of her death she and
her husband were citizens of the State of California and domiciled therein.

It appears further from said order that Allison D. Gibbs was appointed administrator of the state of his said
deceased wife in case No. 36795 in the same court, entitled "In the Matter of the Intestate Estate of Eva
Johnson Gibbs, Deceased"; that in said intestate proceedings, the said Allison D. Gibbs, on September
22,1930, filed an ex parte petition in which he alleged "that the parcels of land hereunder described belong
to the conjugal partnership of your petitioner and his wife, Eva Johnson Gibbs", describing in detail the
three facts here involved; and further alleging that his said wife, a citizen and resident of California, died on
November 28,1929; that in accordance with the law of California, the community property of spouses who
are citizens of California, upon the death of the wife previous to that of the husband, belongs absolutely to
the surviving husband without administration; that the conjugal partnership of Allison D. Gibbs and Eva
Johnson Gibbs, deceased, has no obligations or debts and no one will be prejudiced by adjucating said
parcels of land (and seventeen others not here involved) to be the absolute property of the said Allison D.
Gibbs as sole owner. The court granted said petition and on September 22, 1930, entered a decree
adjucating the said Allison D. Gibbs to be the sole and absolute owner of said lands, applying section 1401
of the Civil Code of California. Gibbs presented this decree to the register of deeds of Manila and
demanded that the latter issue to him a "transfer certificate of title".

Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that:

Registers of deeds shall not register in the registry of property any document transferring real property or
real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or inheritance, unless the
payment of the tax fixed in this article and actually due thereon shall be shown. And they shall immediately
notify the Collector of Internal Revenue or the corresponding provincial treasurer of the non payment of the
tax discovered by them. . . .

Acting upon the authority of said section, the register of deeds of the City of Manila, declined to accept as
binding said decree of court of September 22,1930, and refused to register the transfer of title of the said
conjugal property to Allison D. Gibbs, on the ground that the corresponding inheritance tax had not been
paid. Thereupon, under date of December 26, 1930, Allison D. Gibbs filed in the said court a petition for an
order requiring the said register of deeds "to issue the corresponding titles" to the petitioner without
requiring previous payment of any inheritance tax. After due hearing of the parties, the court reaffirmed said
order of September 22, 1930, and entered the order of March 10, 1931, which is under review on this
appeal.
On January 3, 1933, this court remanded the case to the court of origin for new trial upon additional
evidence in regard to the pertinent law of California in force at the time of the death of Mrs. Gibbs, also
authorizing the introduction of evidence with reference to the dates of the acquisition of the property
involved in this suit and with reference to the California law in force at the time of such acquisition. The
case is now before us with the supplementary evidence.

For the purposes of this case, we shall consider the following facts as established by the evidence or the
admissions of the parties: Allison D. Gibbs has been continuously, since the year 1902, a citizen of the
State of California and domiciled therein; that he and Eva Johnson Gibbs were married at Columbus, Ohio,
in July 1906; that there was no antenuptial marriage contract between the parties; that during the existence
of said marriage the spouses acquired the following lands, among others, in the Philippine Islands, as
conjugal property:lawphil.net

1. A parcel of land in the City of Manila represented by transfer certificate of title No. 20880, dated March
16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson Gibbs".

2. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28336, dated May 14,
1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee
simple" of the land therein described.

3. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28331, dated April 6,
1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the owner of the land
described therein; that said Eva Johnson Gibbs died intestate on November 28, 1929, living surviving her
her husband, the appellee, and two sons, Allison J. Gibbs , now age 25 and Finley J. Gibbs, now aged 22,
as her sole heirs of law.

Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and other
acquisitions mortis causa" provides in section 1536 that "Every transmission by virtue of inheritance ... of
real property ... shall be subject to the following tax." It results that the question for determination in this
case is as follows: Was Eva Johnson Gibbs at the time of her death the owner of a descendible interest in
the Philippine lands above-mentioned?

The appellee contends that the law of California should determine the nature and extent of the title, if any,
that vested in Eva Johnson Gibbs under the three certificates of title Nos. 20880, 28336 and 28331 above
referred to, citing article 9 of the Civil Code. But that, even if the nature and extent of her title under said
certificates be governed by the law of the Philippine Islands, the laws of California govern the succession to
such title, citing the second paragraph of article 10 of the Civil Code.

Article 9 of the Civil Code is as follows:

The laws relating to family rights and duties, or to the status, condition, and legal capacity of persons, are
binding upon Spaniards even though they reside in a foreign country." It is argued that the conjugal right of
the California wife in community real estate in the Philippine Islands is a personal right and must, therefore,
be settled by the law governing her personal status, that is, the law of California. But our attention has not
been called to any law of California that incapacitates a married woman from acquiring or holding land in a
foreign jurisdiction in accordance with the lex rei sitae. There is not the slightest doubt that a California
married woman can acquire title to land in a common law jurisdiction like the State of Illinois or the District
of Columbia, subject to the common-law estate by the courtesy which would vest in her husband. Nor is
there any doubt that if a California husband acquired land in such a jurisdiction his wife would be vested
with the common law right of dower, the prerequisite conditions obtaining. Article 9 of the Civil Code treats
of purely personal relations and status and capacity for juristic acts, the rules relating to property, both
personal and real, being governed by article 10 of the Civil Code. Furthermore, article 9, by its very terms,
is applicable only to "Spaniards" (now, by construction, to citizens of the Philippine Islands).

The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as the "Jones Law") as
regards the determination of private rights, grants practical autonomy to the Government of the Philippine
Islands. This Government, therefore, may apply the principles and rules of private international law
(conflicts of laws) on the same footing as an organized territory or state of the United States. We should,
therefore, resort to the law of California, the nationality and domicile of Mrs. Gibbs, to ascertain the norm
which would be applied here as law were there any question as to her status.

But the appellant's chief argument and the sole basis of the lower court's decision rests upon the second
paragraph of article 10 of the Civil Code which is as follows:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the
amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the
national law of the person whose succession is in question, whatever may be the nature of the property or
the country in which it may be situated.

In construing the above language we are met at the outset with some difficulty by the expression "the
national law of the person whose succession is in question", by reason of the rather anomalous political
status of the Philippine Islands. (Cf. Manresa, vol. 1, Codigo Civil, pp. 103, 104.) We encountered no
difficulty in applying article 10 in the case of a citizen of Turkey. (Miciano vs. Brimo, 50 Phil., 867.) Having
regard to the practical autonomy of the Philippine Islands, as above stated, we have concluded that if
article 10 is applicable and the estate in question is that of a deceased American citizen, the succession
shall be regulated in accordance with the norms of the State of his domicile in the United States. (Cf.
Babcock Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.)

The trial court found that under the law of California, upon the death of the wife, the entire community
property without administration belongs to the surviving husband; that he is the absolute owner of all the
community property from the moment of the death of his wife, not by virtue of succession or by virtue of her
death, but by virtue of the fact that when the death of the wife precedes that of the husband he acquires the
community property, not as an heir or as the beneficiary of his deceased wife, but because she never had
more than an inchoate interest or expentancy which is extinguished upon her death. Quoting the case of
Estate of Klumpke (167 Cal., 415, 419), the court said: "The decisions under this section (1401 Civil Code
of California) are uniform to the effect that the husband does not take the community property upon the
death of the wife by succession, but that he holds it all from the moment of her death as though required by
himself. ... It never belonged to the estate of the deceased wife."

The argument of the appellee apparently leads to this dilemma: If he takes nothing by succession from his
deceased wife, how can the second paragraph of article 10 be invoked? Can the appellee be heard to say
that there is a legal succession under the law of the Philippine Islands and no legal succession under the
law of California? It seems clear that the second paragraph of article 10 applies only when a legal or
testamentary succession has taken place in the Philippines and in accordance with the law of the Philippine
Islands; and the foreign law is consulted only in regard to the order of succession or the extent of the
successional rights; in other words, the second paragraph of article 10 can be invoked only when the
deceased was vested with a descendible interest in property within the jurisdiction of the Philippine Islands.

In the case of Clarke vs. Clarke (178 U. S., 186, 191; 44 Law ed., 1028, 1031), the court said:

It is principle firmly established that to the law of the state in which the land is situated we must look for the
rules which govern its descent, alienation, and transfer, and for the effect and construction of wills and
other conveyances. (United States vs. Crosby, 7 Cranch, 115; 3 L. ed., 287; Clark vs. Graham, 6 Wheat.,
577; 5 L. ed., 334; McGoon vs. Scales, 9 Wall., 23; 19 L. ed., 545; Brine vs. Hartford F. Ins. Co., 96 U. S.,
627; 24 L. ed., 858.)" (See also Estate of Lloyd, 175 Cal., 704, 705.) This fundamental principle is stated in
the first paragraph of article 10 of our Civil Code as follows: "Personal property is subject to the laws of the
nation of the owner thereof; real property to the laws of the country in which it is situated.

It is stated in 5 Cal. Jur., 478:

In accord with the rule that real property is subject to the lex rei sitae, the respective rights of husband and
wife in such property, in the absence of an antenuptial contract, are determined by the law of the place
where the property is situated, irrespective of the domicile of the parties or to the place where the marriage
was celebrated. (See also Saul vs. His Creditors, 5 Martin [N. S.], 569; 16 Am. Dec., 212 [La.];
Heidenheimer vs. Loring, 26 S. W., 99 [Texas].)
Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the time of the
acquisition of the community lands here in question must be determined in accordance with the lex rei
sitae.

It is admitted that the Philippine lands here in question were acquired as community property of the
conjugal partnership of the appellee and his wife. Under the law of the Philippine Islands, she was vested of
a title equal to that of her husband. Article 1407 of the Civil Code provides:

All the property of the spouses shall be deemed partnership property in the absence of proof that it belongs
exclusively to the husband or to the wife. Article 1395 provides:

"The conjugal partnership shall be governed by the rules of law applicable to the contract of partnership in
all matters in which such rules do not conflict with the express provisions of this chapter." Article 1414
provides that "the husband may dispose by will of his half only of the property of the conjugal partnership."
Article 1426 provides that upon dissolution of the conjugal partnership and after inventory and liquidation,
"the net remainder of the partnership property shall be divided share and share alike between the husband
and wife, or their respective heirs." Under the provisions of the Civil Code and the jurisprudence prevailing
here, the wife, upon the acquisition of any conjugal property, becomes immediately vested with an interest
and title therein equal to that of her husband, subject to the power of management and disposition which
the law vests in the husband. Immediately upon her death, if there are no obligations of the decedent, as is
true in the present case, her share in the conjugal property is transmitted to her heirs by succession.
(Articles 657, 659, 661, Civil Code; cf. also Coronel vs. Ona, 33 Phil., 456, 469.)

It results that the wife of the appellee was, by the law of the Philippine Islands, vested of a descendible
interest, equal to that of her husband, in the Philippine lands covered by certificates of title Nos. 20880,
28336 and 28331, from the date of their acquisition to the date of her death. That appellee himself believed
that his wife was vested of such a title and interest in manifest from the second of said certificates, No.
28336, dated May 14, 1927, introduced by him in evidence, in which it is certified that "the spouses Allison
D. Gibbs and Eva Johnson Gibbs are the owners in fee simple of the conjugal lands therein described."

The descendible interest of Eva Johnson Gibbs in the lands aforesaid was transmitted to her heirs by virtue
of inheritance and this transmission plainly falls within the language of section 1536 of Article XI of Chapter
40 of the Administrative Code which levies a tax on inheritances. (Cf. Re Estate of Majot, 199 N. Y., 29; 92
N. E., 402; 29 L. R. A. [N. S.], 780.) It is unnecessary in this proceeding to determine the "order of
succession" or the "extent of the successional rights" (article 10, Civil Code, supra) which would be
regulated by section 1386 of the Civil Code of California which was in effect at the time of the death of Mrs.
Gibbs.

The record does not show what the proper amount of the inheritance tax in this case would be nor that the
appellee (petitioner below) in any way challenged the power of the Government to levy an inheritance tax
or the validity of the statute under which the register of deeds refused to issue a certificate of transfer
reciting that the appellee is the exclusive owner of the Philippine lands included in the three certificates of
title here involved.

The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the petition,
without special pronouncement as to the costs.