SECOND DIVISION

G.R. No. 205487, November 12, 2014

ORION SAVINGS BANK, Petitioner, v. SHIGEKANE SUZUKI, Respondent.

DECISION

BRION, J.:

Before us is the Petition for Review on Certiorari1 filed by petitioner Orion

Savings Bank (Orion) under Rule 45 of the Rules of Court, assailing the
decision2 dated August 23, 2012 and the resolution3 dated January 25, 2013
of the Court of Appeals (CA) in CA-G.R. CV No. 94104.cralawred

The Factual Antecedents

In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a

Japanese national, met with Ms. Helen Soneja (Soneja) to inquire about a
condominium unit and a parking slot at Cityland Pioneer, Mandaluyong City,
allegedly owned by Yung Sam Kang (Kang), a Korean national and a Special
Resident Retiree’s Visa (SRRV) holder.

At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by
Condominium Certificate of Title (CCT) No. 18186]4 and Parking Slot No. 42
[covered by CCT No. 9118]5 were for sale for P3,000,000.00. Soneja
likewise assured Suzuki that the titles to the unit and the parking slot were
clean. After a brief negotiation, the parties agreed to reduce the price to
P2,800,000.00.

On August 5, 2003, Suzuki issued Kang a Bank of the Philippine Island (BPI)
Check No. 833496 for One Hundred Thousand Pesos (P100,000.00) as
reservation fee.7 On August 21, 2003, Suzuki issued Kang another check,
BPI Check No. 83350,8 this time for P2,700,000.00 representing the
remaining balance of the purchase price. Suzuki and Kang then executed a
Deed of Absolute Sale dated August 26, 20039covering Unit No. 536 and
Parking Slot No. 42. Soon after, Suzuki took possession of the condominium
unit and parking lot, and commenced the renovation of the interior of the
condominium unit.

Kang thereafter made several representations with Suzuki to deliver the

titles to the properties, which were then allegedly in possession of Alexander
Perez (Perez, Orion’s Loans Officer) for safekeeping. Despite several verbal
demands, Kang failed to deliver the documents. Suzuki later on learned that
Kang had left the country, prompting Suzuki to verify the status of the
properties with the Mandaluyong City Registry of Deeds.

Before long, Suzuki learned that CCT No. 9118 representing the title to the
Parking Slot No. 42 contained no annotations although it remained under the
name of Cityland Pioneer. This notwithstanding, Cityland Pioneer, through
Assistant Vice President Rosario D. Perez, certified that Kang had fully paid
the purchase price of Unit. No. 53610 and Parking Slot No.
42.11chanRoblesvirtualLawlibrary

CCT No. 18186 representing the title to the condominium unit had no
existing encumbrance, except for an annotation under Entry No. 73321/C-
10186 which provided that any conveyance or encumbrance of CCT No.
18186 shall be subject to approval by the Philippine Retirement Authority
(PRA). Although CCT No. 18186 contained Entry No. 66432/C-10186 dated
February 2, 1999 representing a mortgage in favor of Orion for a
P1,000,000.00 loan, that annotation was subsequently cancelled on June 16,
2000 by Entry No. 73232/T. No. 10186. Despite the cancellation of the
mortgage to Orion, the titles to the properties remained in possession of
Perez.

To protect his interests, Suzuki then executed an Affidavit of Adverse

Claim12 dated September 8, 2003, with the Registry of Deeds of
Mandaluyong City, annotated as Entry No. 3292/C-No. 18186 in CCT No.
18186. Suzuki then demanded the delivery of the titles.13 Orion, (through
Perez), however, refused to surrender the titles, and cited the need to
consult Orion’s legal counsel as its reason.

On October 14, 2003, Suzuki received a letter from Orion’s counsel dated
October 9, 2003, stating that Kang obtained another loan in the amount
of P1,800,000.00. When Kang failed to pay, he executed a Dacion en
Pago dated February 2, 2003, in favor of Orion covering Unit No.
536. Orion, however, did not register the Dacion en Pago, until October 15,
2003.

On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over

Parking Slot No. 42 (covered by CCT No. 9118) and this was annotated as
Entry No. 4712/C-No. 9118 in the parking lot’s title.

On January 27, 2004, Suzuki filed a complaint for specific performance and
damages against Kang and Orion. At the pre-trial, the parties made the
following admissions and stipulations:

That as of August 26, 2003, Kang was the registered owner of Unit No. 536
and Parking Slot No. 42;

1. That the mortgage in favor of Orion supposedly executed

by Kang, with Entry No. 66432/C-10186 dated February 2, 1999,
was subsequently cancelled by Entry No. 73232/T No. 10186
dated June 16, 2000;

2. That the alleged Dacion en Pago was never annotated in CCT

Nos. 18186 and 9118;

3. That Orion only paid the appropriate capital gains tax and the
documentary stamp tax for the alleged Dacion en Pago on
October 15, 2003;

4. That Parking Slot No. 42, covered by CCT No. 9118, was never
mortgaged to Orion; and

5. That when Suzuki bought the properties, he went to Orion to

obtain possession of the titles.

The RTC Ruling

In its decision14 dated June 29, 2009, the Regional Trial Court (RTC), Branch
213, Mandaluyong City ruled in favor of Suzuki and ordered Orion to deliver
the CCT Nos. 18186 and 9118 to Suzuki.

The court found that Suzuki was an innocent purchaser for value whose
rights over the properties prevailed over Orion’s. The RTC further noted that
Suzuki exerted efforts to verify the status of the properties but he did not
find any existing encumbrance in the titles. Although Orion claims to have
purchased the property by way of a Dacion en Pago, Suzuki only learned
about it two (2) months after he bought the properties because Orion never
bothered to register or annotate the Dacion en Pago in CCT Nos. 18186 and
9116.

The RTC further ordered Orion and Kang to jointly and severally pay Suzuki
moral damages, exemplary damages, attorney’s fees, appearance fees,
expenses for litigation and cost of suit. Orion timely appealed the RTC
decision with the CA.

The CA Ruling

On August 23, 2012, the CA partially granted Orion’s appeal and sustained
the RTC insofar as it upheld Suzuki’s right over the properties. The CA
further noted that Entry No. 73321/C-10186 pertaining to the withdrawal of
investment of an SRRV only serves as a warning to an SRRV holder about
the implications of a conveyance of a property investment. It deviated from
the RTC ruling, however, by deleting the award for moral damages,
exemplary damages, attorney’s fees, expenses for litigation and cost of suit.

Orion sought a reconsideration of the CA decision but the CA denied the

motion in its January 25, 2013 resolution. Orion then filed a petition for
review on certiorari under Rule 45 with this Court.

The Petition and Comment

Orion’s petition is based on the following

grounds/arguments:15chanRoblesvirtualLawlibrary

1. The Deed of Sale executed by Kang in favor of Suzuki is null and

void. Under Korean law, any conveyance of a conjugal property
should be made with the consent of both spouses;

2. Suzuki is not a buyer in good faith for he failed to check the owner’s
duplicate copies of the CCTs;

3. Knowledge of the PRA restriction under Entry No. 73321/C-10186,

which prohibits any conveyance or encumbrance of the property
investment, defeats the alleged claim of good faith by Suzuki; and

4. Orion should not be faulted for exercising due diligence.

In his Comment,16 Suzuki asserts that the issue on spousal consent was
belatedly raised on appeal. Moreover, proof of acquisition during the marital
coverture is a condition sine qua non for the operation of the presumption of
conjugal ownership.17 Suzuki additionally maintains that he is a purchaser in
good faith, and is thus entitled to the protection of the law.

The Court’s Ruling

We deny the petition for lack of merit.

The Court may inquire into

conclusions of fact when the
inference made is manifestly
mistaken

In a Rule 45 petition, the latitude of judicial review generally excludes a

factual and evidentiary re-evaluation, and the Court ordinarily abides by
the uniform factual conclusions of the trial court and the appellate
court.18 In the present case, while the courts below both arrived at the same
conclusion, there appears to be an incongruence in their factual findings and
the legal principle they applied to the attendant factual circumstances. Thus,
we are compelled to examine certain factual issues in the exercise of our
sound discretion to correct any mistaken inference that may have been
made.19chanRoblesvirtualLawlibrary

Philippine Law governs the

transfer of real property

Orion believes that the CA erred in not ruling on the issue of spousal
consent. We cannot uphold this position, however, because the issue of
spousal consent was only raised on appeal to the CA. It is a well-settled
principle that points of law, theories, issues, and arguments not brought to
the attention of the trial court cannot be raised for the first time on appeal
and considered by a reviewing court.20 To consider these belated arguments
would violate basic principles of fair play, justice, and due process.

Having said these, we shall nonetheless discuss the issues Orion belatedly
raised, if only to put an end to lingering doubts on the correctness of
the denial of the present petition.

It is a universal principle that real or immovable property is exclusively

subject to the laws of the country or state where it is located.21 The reason
is found in the very nature of immovable property — its immobility.
Immovables are part of the country and so closely connected to it that all
rights over them have their natural center of gravity
there.22chanRoblesvirtualLawlibrary

Thus, all matters concerning the title and disposition of real property are
determined by what is known as the lex loci rei sitae, which can alone
prescribe the mode by which a title can pass from one person to another, or
by which an interest therein can be gained or lost.23 This general principle
includes all rules governing the descent, alienation and transfer of
immovable property and the validity, effect and construction of wills and
other conveyances.24chanRoblesvirtualLawlibrary

This principle even governs the capacity of the person making a deed
relating to immovable property, no matter what its nature may be. Thus, an
instrument will be ineffective to transfer title to land if the person making it
is incapacitated by the lex loci rei sitae, even though under the law of his
domicile and by the law of the place where the instrument is actually made,
his capacity is undoubted.25chanRoblesvirtualLawlibrary

On the other hand, property relations between spouses are governed

principally by the national law of the spouses.26 However, the party invoking
the application of a foreign law has the burden of proving the foreign law.
The foreign law is a question of fact to be properly pleaded and proved as
the judge cannot take judicial notice of a foreign law. 27 He is presumed to
know only domestic or the law of the forum.28chanRoblesvirtualLawlibrary

To prove a foreign law, the party invoking it must present a copy thereof
and comply with Sections 24 and 25 of Rule 132 of the Revised Rules of
Court which reads:

SEC. 24. Proof of official record. — The record of public documents referred
to in paragraph (a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the
officer having the legal custody of the 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. If the office in which the record is kept is
in a foreign country, the certificate may be made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authenticated by the seal
of his office. (Emphasis supplied)

SEC. 25. What attestation of copy must state. — Whenever a copy of a

document or record is attested for the purpose of the evidence, the
attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The attestation must
be under the official seal of the attesting officer, if there be any, or if he be
the clerk of a court having a seal, under the seal of such court.

Accordingly, matters concerning the title and disposition of real property

shall be governed by Philippine law while issues pertaining to the conjugal
nature of the property shall be governed by South Korean law, provided it is
proven as a fact.

In the present case, Orion, unfortunately failed to prove the South Korean
law on the conjugal ownership of property. It merely attached a
“Certification from the Embassy of the Republic of Korea”29 to prove the
existence of Korean Law. This certification, does not qualify as sufficient
proof of the conjugal nature of the property for there is no showing that it
was properly authenticated by the seal of his office, as required under
Section 24 of Rule 132.30chanRoblesvirtualLawlibrary

Accordingly, the International Law doctrine of presumed-identity approach or

processual presumption comes into play, i.e., where a foreign law is not
pleaded or, even if pleaded, is not proven, the presumption is that foreign
law is the same as Philippine Law.31chanRoblesvirtualLawlibrary

Under Philippine Law, the phrase "Yung Sam Kang ‘married to' Hyun Sook
Jung” is merely descriptive of the civil status of Kang.32 In other words, the
import from the certificates of title is that Kang is the owner of the
properties as they are registered in his name alone, and that he is married
to Hyun Sook Jung.

We are not unmindful that in numerous cases we have held that registration
of the property in the name of only one spouse does not negate the
possibility of it being conjugal or community property.33 In those cases,
however, there was proof that the properties, though registered in the name
of only one spouse, were indeed either conjugal or community
properties.34 Accordingly, we see no reason to declare as invalid Kang’s
conveyance in favor of Suzuki for the supposed lack of spousal consent.

The petitioner failed to adduce sufficient

evidence to prove the due execution of the
Dacion en Pago

Article 1544 of the New Civil Code of the Philippines provides that:

ART. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person

who in good faith was first in the possession; and, in the absence thereof, to
the person who presents the oldest title, provided there is good faith.

The application of Article 1544 of the New Civil Code presupposes the
existence of two or more duly executed contracts of sale. In the
present case, the Deed of Sale dated August 26, 200335 between Suzuki
and Kang was admitted by Orion36 and was properly identified by Suzuki’s
witness Ms. Mary Jane Samin (Samin).37chanRoblesvirtualLawlibrary

It is not disputed, too, that the Deed of Sale dated August 26, 2003 was
consummated. In a contract of sale, the seller obligates himself to transfer
the ownership of the determinate thing sold, and to deliver the same to the
buyer, who obligates himself to pay a price certain to the seller.38 The
execution of the notarized deed of sale and the actual transfer of possession
amounted to delivery that produced the legal effect of transferring
ownership to Suzuki.39chanRoblesvirtualLawlibrary

On the other hand, although Orion claims priority in right under the principle
of prius tempore, potior jure(i.e., first in time, stronger in right), it failed to
prove the existence and due execution of the Dacion en Pago in its favor.

At the outset, Orion offered the Dacion en Pago as Exhibit “5” with
submarkings “5-a” to “5-c” to prove the existence of the February 6, 2003
transaction in its Formal Offer dated July 20, 2008. Orion likewise offered in
evidence the supposed promissory note dated September 4, 2002 as Exhibit
“12” to prove the existence of the additional P800,000.00 loan. The RTC,
however, denied the admission of Exhibits “5” and “12,” among others, in its
order dated August 19, 2008 “since the same [were] not identified in court
by any witness.”40chanRoblesvirtualLawlibrary

Despite the exclusion of its most critical documentary evidence, Orion failed
to make a tender of excluded evidence, as provided under Section 40, Rule
132 of the Rules of Court. For this reason alone, we are prevented from
seriously considering Exhibit “5” and its submarkings and Exhibit “12” in the
present petition.

Moreover, even if we consider Exhibit “5” and its submarkings and Exhibit
“12” in the present petition, the copious inconsistencies and contradictions in
the testimonial and documentary evidence of Orion, militate against the
conclusion that the Dacion en Pago was duly executed.

First, there appears to be no due and demandable obligation

when the Dacion en Pago was executed, contrary to the allegations of
Orion. Orion’s witness Perez tried to impress upon the RTC that Kang was in
default in his P1,800,000.00 loan. During his direct examination, he stated:

ATTY. CRUZAT:
Q: Okay, so this loan of P1.8 million, what happened to this loan, Mr.
Witness?
A: Well it became past due, there has been delayed interest payment
by Mr. Kang and...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the bank through
loans and we have executed a dacion en pago because Mr. Kang said he
has no money. So we just execute[d] the dacion en pago rather
than going through the Foreclosure proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.41
A reading of the supposed promissory note, however, shows that there was
no default to speak of when the supposed Dacion en Pago was
executed.

Based on the promissory note, Kang’s loan obligation would mature only
on August 27, 2003. Neither can Orion claim that Kang had been in
default in his installment payments because the wordings of the promissory
note provide that “[t]he principal of this loan and its interest and
other charges shall be paid by me/us in accordance
hereunder: SINGLE PAYMENT LOANS.42” There was thus no due and
demandable loan obligation when the alleged Dacion en Pago was
executed.

Second, Perez, the supposed person who prepared the Dacion en

Pago, appears to only have a vague idea of the transaction he supposedly
prepared. During his cross-examination, he testified:

ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en pago] Mr. witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the penalties, interest
and surcharge due from Mr. Yung Sam Kang?
A: It’s just the principal, sir.
Q: So you did not state the interest [and] penalties?
A: In the [dacion en pago], we do not include interest, sir. We may actually
include that but....
Q: Can you read the Second Whereas Clause, Mr. Witness?
A: Whereas the first party failed to pay the said loan to the second
party and as of February 10, 2003, the outstanding obligation
which is due and demandable principal and interest and other
charges included amounts to P1,800,000.00 pesos, sir.
xxxx
Q: You are now changing your answer[.] [I]t now includes interest and
other charges, based on this document?
A: Yes, based on that document, sir.43

Third, the Dacion en Pago, mentioned that the P1,800,000.00 loan was
secured by a real estate mortgage. However, no document was ever
presented to prove this real estate mortgage aside from it being mentioned
in the Dacion en Pago itself.

ATTY. DE CASTRO:
Q: Would you know if there is any other document like a supplement to that
Credit Line Agreement referring to this 1.8 million peso loan by Mr. Yung
Sam Kang which says that there was a subsequent collateralization or
security given by Mr. Yung [Sam] Kang for the loan?
xxxx
A: The [dacion en pago], sir.44

Fourth, the Dacion en Pago was first mentioned only two (2)
months after Suzuki and Samin demanded the delivery of the titles
sometime in August 2003, and after Suzuki caused the annotation of his
affidavit of adverse claim. Records show that it was only on October 9,
2003, when Orion, through its counsel, Cristobal Balbin Mapile &
Associates first spoke of the Dacion en Pago.45 Not even Perez
mentioned any Dacion en Pago on October 1, 2003, when he personally
received a letter demanding the delivery of the titles. Instead, Perez refused
to accept the letter and opted to first consult with his
lawyer.46chanRoblesvirtualLawlibrary

Notably, even the October 9, 2003 letter contained material inconsistencies

in its recital of facts surrounding the execution of the Dacion en Pago. In
particular, it mentioned that “on [September 4, 2002], after paying the
original loan, [Kang] applied and was granted a new Credit Line Facility by
[Orion] x x x for ONE MILLION EIGHT HUNDRED THOUSAND PESOS
(P1,800,000.00).” Perez, however, testified that there was “no cash
movement” in the original P1,000,000.00 loan. In his testimony, he said:

COURT:
xxxx
Q: Would you remember what was the subject matter of that real estate
mortgage for that first P1,000,000.00 loan?
A: It’s a condominium Unit in Cityland, sir.
xxxx
Q: Would you recall if there was any payment by Mr. Yung Sam Kang
of this P1,000,000.00 loan?
A: None sir.
Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either by way of
payment to the principal, by way of payment of interest, there
was no payment by Mr. Yung Sam Kang of this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings Bank still extended
an P800,000.00 additional right?
A: Yes, sir.47

Fifth, it is undisputed that notwithstanding the supposed execution of

the Dacion en Pago on February 2, 2003, Kang remained in possession of
the condominium unit. In fact, nothing in the records shows that Orion even
bothered to take possession of the property even six (6) months after the
supposed date of execution of the Dacion en Pago. Kang was even able to
transfer possession of the condominium unit to Suzuki, who then made
immediate improvements thereon. If Orion really purchased the
condominium unit on February 2, 2003 and claimed to be its true owner,
why did it not assert its ownership immediately after the alleged sale took
place? Why did it have to assert its ownership only after Suzuki demanded
the delivery of the titles? These gaps have remained unanswered and
unfilled.

In Suntay v. CA,48 we held that the most prominent index of simulation is

the complete absence of an attempt on the part of the vendee to assert his
rights of ownership over the property in question. After the sale, the vendee
should have entered the land and occupied the premises. The absence of
any attempt on the part of Orion to assert its right of dominion over
the property allegedly sold to it is a clear badge of fraud. That
notwithstanding the execution of the Dacion en Pago, Kang
remained in possession of the disputed condominium unit – from the
time of the execution of the Dacion en Pago until the property’s
subsequent transfer to Suzuki – unmistakably strengthens the
fictitious nature of the Dacion en Pago.

These circumstances, aside from the glaring inconsistencies in the

documents and testimony of Orion’s witness, indubitably prove the spurious
nature of the Dacion en Pago.

The fact that the Dacion en

Pago is a notarized
document does not
support the conclusion
that the sale it embodies is
a true conveyance

Public instruments are evidence of the facts that gave rise to their execution
and are to be considered as containing all the terms of the
agreement.49 While a notarized document enjoys this presumption, “the fact
that a deed is notarized is not a guarantee of the validity of its
contents.”50 The presumption of regularity of notarized documents is not
absolute and may be rebutted by clear and convincing evidence to the
contrary.51chanRoblesvirtualLawlibrary

In the present case, the presumption cannot apply because the regularity in
the execution of the Dacion en Pago and the loan documents was challenged
in the proceedings below where their prima facie validity was overthrown by
the highly questionable circumstances surrounding their
execution.52chanRoblesvirtualLawlibrary

Effect of the PRA restriction on

the validity of Suzuki’s title to the
property

Orion argues that the PRA restriction in CCT No. 18186 affects the
conveyance to Suzuki. In particular, Orion assails the status of Suzuki as a
purchaser in good faith in view of the express PRA restriction contained in
CCT No. 18186.53chanRoblesvirtualLawlibrary

We reject this suggested approach outright because, to our mind, the PRA
restriction cannot affect the conveyance in favor of Suzuki. On this particular
point, we concur with the following findings of the CA:

x x x the annotation merely serves as a warning to the owner who holds a

Special Resident Retiree’s Visa (SRRV) that he shall lose his visa if he
disposes his property which serves as his investment in order to qualify for
such status. Section 14 of the Implementing Investment Guidelines under
Rule VIII-A of the Rules and Regulations Implementing Executive Order No.
1037, Creating the Philippine Retirement Park System Providing Funds
Therefor and For Other Purpose ( otherwise known as the Philippine
Retirement Authority)states:ChanRoblesVirtualawlibrary
Section 14. Should the retiree-investor withdraw his investment from the
Philippines, or transfer the same to another domestic enterprise, or sell,
convey or transfer his condominium unit or units to another person, natural
or juridical without the prior approval of the Authority, the Special Resident
Retiree’s Visa issued to him, and/or unmarried minor child or children[,] may
be cancelled or revoked by the Philippine Government, through the
appropriate government department or agency, upon recommendation of
the Authority.54

Moreover, Orion should not be allowed to successfully assail the good faith of
Suzuki on the basis of the PRA restriction. Orion knew of the PRA
restriction when it transacted with Kang. Incidentally, Orion
admitted accommodating Kang’s request to cancel the mortgage
annotation despite the lack of payment to circumvent the PRA
restriction. Orion, thus, is estopped from impugning the validity of the
conveyance in favor of Suzuki on the basis of the PRA restriction that Orion
itself ignored and “attempted” to circumvent.

With the conclusion that Orion failed to prove the authenticity of the Dacion
en Pago, we see no reason for the application of the rules on double sale
under Article 1544 of the New Civil Code. Suzuki, moreover, successfully
adduced sufficient evidence to establish the validity of conveyance in his
favor.chanrobleslaw

WHEREFORE, premises considered, we DENY the petition for lack of

merit. Costs against petitioner Orion Savings Bank.

SO ORDERED.cralawlawlibrary

Carpio, (Chairperson), Del Castillo, Mendoza, and Leonen, JJ., concur.

 EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-
appellants, vs. EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of
the Court of First Instance of Manila dated April 30, 1964, approving the
project of partition filed by the executor in Civil Case No. 37089 therein.

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the
United States." By his first wife, Mary E. Mallen, whom he divorced, he had
five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased
him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman; by
his second wife, Violet Kennedy, who survived him, he had three legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he
had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis.chanroblesvirtualawlibrarychanrobles virtual law library

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in

which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and
(c) after the foregoing two items have been satisfied, the remainder shall go
to his seven surviving children by his first and second wives, namely:
Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman,
Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San

Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First
Instance of Manila on September 15, 1958.

The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares
of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a
total of P120,000.00, which it released from time to time according as the
lower court approved and allowed the various motions or petitions filed by
the latter three requesting partial advances on account of their respective
legacies.

On January 8, 1964, preparatory to closing its administration, the executor

submitted and filed its "Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia, the satisfaction of the
legacy of Mary E. Mallen by the delivery to her of shares of stock amounting
to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis in the amount of P40,000.00 each or a total of
P120,000.00. In the project of partition, the executor - pursuant to the
"Twelfth" clause of the testator's Last Will and Testament - divided the
residuary estate into seven equal portions for the benefit of the testator's
seven legitimate children by his first and second marriages.

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed
their respective oppositions to the project of partition on the ground that
they were deprived of their legitimes as illegitimate children and, therefore,
compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of

service of which is evidenced by the registry receipt submitted on April 27,
1964 by the executor.

After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling the
oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is Texas
law, which did not provide for legitimes.

Their respective motions for reconsideration having been denied by the

lower court on June 11, 1964, oppositors-appellants appealed to this Court
to raise the issue of which law must apply - Texas law or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the
doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L-
16749, January 31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile of another. In the
present case, it is not disputed that the decedent was both a national of
Texas and a domicile thereof at the time of his death.2 So that even
assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a
reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei
sitae) calling for the application of the law of the place where the properties
are situated, renvoi would arise, since the properties here involved are found
in the Philippines. In the absence, however, of proof as to the conflict of law
rule of Texas, it should not be presumed different from ours.3 Appellants'
position is therefore not rested on the doctrine of renvoi. As stated, they
never invoked nor even mentioned it in their arguments. Rather, they argue
that their case falls under the circumstances mentioned in the third
paragraph of Article 17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will; and
(d) the capacity to succeed. They provide that -

ART. 16. Real property as well as personal property is subject to the law of
the country where it is situated.

However, intestate and testamentary successions, both with respect to the

order of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the
national law of the person whose succession is under consideration,
whatever may he the nature of the property and regardless of the country
wherein said property may be found.
 ART. 1039. Capacity to succeed is governed by the law of the nation of the
decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil
Code, stating that -

Prohibitive laws concerning persons, their acts or property, and those which
have for their object public order, public policy and good customs shall not
be rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase, "notwithstanding
the provisions of this and the next preceding article" when they incorporated
Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while
reproducing without substantial change the second paragraph of Art. 10 of
the old Civil Code as Art. 16 in the new. It must have been their purpose to
make the second paragraph of Art. 16 a specific provision in itself which
must be applied in testate and intestate succession. As further indication of
this legislative intent, Congress added a new provision, under Art. 1039,
which decrees that capacity to succeed is to be governed by the national law
of the decedent.

It is therefore evident that whatever public policy or good customs may be

involved in our System of legitimes, Congress has not intended to extend
the same to the succession of foreign nationals. For it has specifically chosen
to leave, inter alia, the amount of successional rights, to the decedent's
national law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills - one to
govern his Texas estate and the other his Philippine estate - arguing from
this that he intended Philippine law to govern his Philippine estate. Assuming
that such was the decedent's intention in executing a separate Philippine
will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50
Phil. 867, 870, a provision in a foreigner's will to the effect that his
properties shall be distributed in accordance with Philippine law and not with
his national law, is illegal and void, for his national law cannot be ignored in
regard to those matters that Article 10 - now Article 16 - of the Civil Code
states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no forced
heirs or legitimes. Accordingly, since the intrinsic validity of the provision of
the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez

and Castro, JJ., concur.
 EN BANC

G.R. No. L-16749 January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E.

CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the
deceased, Executor and Heir-appellees, vs. HELEN CHRISTENSEN
GARCIA,oppositor-appellant.

M. R. Sotelo for executor and heir-appellees.

Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of Davao,

Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said
court, dated September 14, 1949, approving among things the final
accounts of the executor, directing the executor to reimburse Maria Lucy
Christensen the amount of P3,600 paid by her to Helen Christensen Garcia
as her legacy, and declaring Maria Lucy Christensen entitled to the residue
of the property to be enjoyed during her lifetime, and in case of death
without issue, one-half of said residue to be payable to Mrs. Carrie Louise C.
Borton, etc., in accordance with the provisions of the will of the testator
Edward E. Christensen. The will was executed in Manila on March 5, 1951
and contains the following provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCY
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines
about twenty-eight years ago, and who is now residing at No. 665 Rodger
Young Village, Los Angeles, California, U.S.A.

4. I further declare that I now have no living ascendants, and no

descendants except my above named daughter, MARIA LUCY CHRISTENSEN
DANEY.
 xxx xxx xxx

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now

married to Eduardo Garcia, about eighteen years of age and who,
notwithstanding the fact that she was baptized Christensen, is not in any
way related to me, nor has she been at any time adopted by me, and who,
from all information I have now resides in Egpit, Digos, Davao, Philippines,
the sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine
Currency the same to be deposited in trust for the said Maria Helen
Christensen with the Davao Branch of the Philippine National Bank, and paid
to her at the rate of One Hundred Pesos (P100.00), Philippine Currency per
month until the principal thereof as well as any interest which may have
accrued thereon, is exhausted..

xxx xxx xxx

12. I hereby give, devise and bequeath, unto my well-beloved daughter, the
said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing
as aforesaid at No. 665 Rodger Young Village, Los Angeles, California,
U.S.A., all the income from the rest, remainder, and residue of my property
and estate, real, personal and/or mixed, of whatsoever kind or character,
and wheresoever situated, of which I may be possessed at my death and
which may have come to me from any source whatsoever, during her
lifetime: ....

It is in accordance with the above-quoted provisions that the executor in his

final account and project of partition ratified the payment of only P3,600 to
Helen Christensen Garcia and proposed that the residue of the estate be
transferred to his daughter, Maria Lucy Christensen.

Opposition to the approval of the project of partition was filed by Helen

Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an
acknowledged natural child, she having been declared by Us in G.R. Nos. L-
11483-84 an acknowledged natural child of the deceased Edward E.
Christensen. The legal grounds of opposition are (a) that the distribution
should be governed by the laws of the Philippines, and (b) that said order of
distribution is contrary thereto insofar as it denies to Helen Christensen, one
of two acknowledged natural children, one-half of the estate in full
ownership. In amplification of the above grounds it was alleged that the law
that should govern the estate of the deceased Christensen should not be the
internal law of California alone, but the entire law thereof because several
foreign elements are involved, that the forum is the Philippines and even if
the case were decided in California, Section 946 of the California Civil Code,
which requires that the domicile of the decedent should apply, should be
applicable. It was also alleged that Maria Helen Christensen having been
declared an acknowledged natural child of the decedent, she is deemed for
all purposes legitimate from the time of her birth.

The court below ruled that as Edward E. Christensen was a citizen of the
United States and of the State of California at the time of his death, the
successional rights and intrinsic validity of the provisions in his will are to be
governed by the law of California, in accordance with which a testator has
the right to dispose of his property in the way he desires, because the right
of absolute dominion over his property is sacred and inviolable (In re
McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman,
117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor
Maria Helen Christensen, through counsel, filed various motions for
reconsideration, but these were denied. Hence, this appeal.

The most important assignments of error are as follows:

THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE

HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED
NATURAL CHILD OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN
DEPRIVING HER OF HER JUST SHARE IN THE INHERITANCE.

II

THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO

RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND
CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.

III

THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER

INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE
INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E.
CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.

IV

THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF

DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE
PHILIPPINE LAWS.
 V

THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE

PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF
(1/2) OF THE ESTATE IN FULL OWNERSHIP.

There is no question that Edward E. Christensen was a citizen of the United

States and of the State of California at the time of his death. But there is
also no question that at the time of his death he was domiciled in the
Philippines, as witness the following facts admitted by the executor himself
in appellee's brief:

In the proceedings for admission of the will to probate, the facts of record
show that the deceased Edward E. Christensen was born on November 29,
1875 in New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an
appointed school teacher, was on July 1, 1901, on board the U.S. Army
Transport "Sheridan" with Port of Embarkation as the City of San Francisco,
in the State of California, U.S.A. He stayed in the Philippines until 1904.

In December, 1904, Mr. Christensen returned to the United States and

stayed there for the following nine years until 1913, during which time he
resided in, and was teaching school in Sacramento, California.

Mr. Christensen's next arrival in the Philippines was in July of the year 1913.
However, in 1928, he again departed the Philippines for the United States
and came back here the following year, 1929. Some nine years later, in
1938, he again returned to his own country, and came back to the
Philippines the following year, 1939.

Wherefore, the parties respectfully pray that the foregoing stipulation of

facts be admitted and approved by this Honorable Court, without prejudice
to the parties adducing other evidence to prove their case not covered by
this stipulation of facts.

Being an American citizen, Mr. Christensen was interned by the Japanese

Military Forces in the Philippines during World War II. Upon liberation, in
April 1945, he left for the United States but returned to the Philippines in
December, 1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc.
622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-
Daney" and p. 473, t.s.n., July 21, 1953.)

In April, 1951, Edward E. Christensen returned once more to California

shortly after the making of his last will and testament (now in question
herein) which he executed at his lawyers' offices in Manila on March 5, 1951.
He died at the St. Luke's Hospital in the City of Manila on April 30, 1953.
(pp. 2-3)

In arriving at the conclusion that the domicile of the deceased is the

Philippines, we are persuaded by the fact that he was born in New York,
migrated to California and resided there for nine years, and since he came to
the Philippines in 1913 he returned to California very rarely and only for
short visits (perhaps to relatives), and considering that he appears never to
have owned or acquired a home or properties in that state, which would
indicate that he would ultimately abandon the Philippines and make home in
the State of California.

Sec. 16. Residence is a term used with many shades of meaning from mere
temporary presence to the most permanent abode. Generally, however, it is
used to denote something more than mere physical presence. (Goodrich on
Conflict of Laws, p. 29)

As to his citizenship, however, We find that the citizenship that he acquired

in California when he resided in Sacramento, California from 1904 to 1913,
was never lost by his stay in the Philippines, for the latter was a territory of
the United States (not a state) until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact that when he
executed his will in 1951 he declared that he was a citizen of that State; so
that he appears never to have intended to abandon his California citizenship
by acquiring another. This conclusion is in accordance with the following
principle expounded by Goodrich in his Conflict of Laws.

The terms "'residence" and "domicile" might well be taken to mean the same
thing, a place of permanent abode. But domicile, as has been shown, has
acquired a technical meaning. Thus one may be domiciled in a place where
he has never been. And he may reside in a place where he has no domicile.
The man with two homes, between which he divides his time, certainly
resides in each one, while living in it. But if he went on business which would
require his presence for several weeks or months, he might properly be said
to have sufficient connection with the place to be called a resident. It is
clear, however, that, if he treated his settlement as continuing only for the
particular business in hand, not giving up his former "home," he could not be
a domiciled New Yorker. Acquisition of a domicile of choice requires the
exercise of intention as well as physical presence. "Residence simply
requires bodily presence of an inhabitant in a given place, while domicile
requires bodily presence in that place and also an intention to make it one's
domicile." Residence, however, is a term used with many shades of
meaning, from the merest temporary presence to the most permanent
abode, and it is not safe to insist that any one use et the only proper one.
(Goodrich, p. 29)

The law that governs the validity of his testamentary dispositions is defined
in Article 16 of the Civil Code of the Philippines, which is as follows:

ART. 16. Real property as well as personal property is subject to the law of
the country where it is situated.

However, intestate and testamentary successions, both with respect to the

order of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the
national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country
where said property may be found.

The application of this article in the case at bar requires the determination of
the meaning of the term "national law" is used therein.

There is no single American law governing the validity of testamentary

provisions in the United States, each state of the Union having its own
private law applicable to its citizens only and in force only within the state.
The "national law" indicated in Article 16 of the Civil Code above quoted can
not, therefore, possibly mean or apply to any general American law. So it
can refer to no other than the private law of the State of California.

The next question is: What is the law in California governing the disposition
of personal property? The decision of the court below, sustains the
contention of the executor-appellee that under the California Probate Code,
a testator may dispose of his property by will in the form and manner he
desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P.
2d 952. But appellant invokes the provisions of Article 946 of the Civil Code
of California, which is as follows:

If there is no law to the contrary, in the place where personal property is

situated, it is deemed to follow the person of its owner, and is governed by
the law of his domicile.

The existence of this provision is alleged in appellant's opposition and is not

denied. We have checked it in the California Civil Code and it is there.
Appellee, on the other hand, relies on the case cited in the decision and
testified to by a witness. (Only the case of Kaufman is correctly cited.) It is
argued on executor's behalf that as the deceased Christensen was a citizen
of the State of California, the internal law thereof, which is that given in the
abovecited case, should govern the determination of the validity of the
testamentary provisions of Christensen's will, such law being in force in the
State of California of which Christensen was a citizen. Appellant, on the
other hand, insists that Article 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the question of the
validity of the testamentary provision in question should be referred back to
the law of the decedent's domicile, which is the Philippines.

The theory of doctrine of renvoi has been defined by various authors, thus:

The problem has been stated in this way: "When the Conflict of Laws rule of
the forum refers a jural matter to a foreign law for decision, is the reference
to the purely internal rules of law of the foreign system; i.e., to the totality
of the foreign law minus its Conflict of Laws rules?"

On logic, the solution is not an easy one. The Michigan court chose to accept
the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred
the matter back to Michigan law. But once having determined the the
Conflict of Laws principle is the rule looked to, it is difficult to see why the
reference back should not have been to Michigan Conflict of Laws. This
would have resulted in the "endless chain of references" which has so often
been criticized be legal writers. The opponents of the renvoi would have
looked merely to the internal law of Illinois, thus rejecting the renvoi or the
reference back. Yet there seems no compelling logical reason why the
original reference should be the internal law rather than to the Conflict of
Laws rule. It is true that such a solution avoids going on a merry-go-round,
but those who have accepted the renvoi theory avoid this inextricabilis
circulas by getting off at the second reference and at that point applying
internal law. Perhaps the opponents of the renvoiare a bit more consistent
for they look always to internal law as the rule of reference.

Strangely enough, both the advocates for and the objectors to

the renvoi plead that greater uniformity will result from adoption of their
respective views. And still more strange is the fact that the only way to
achieve uniformity in this choice-of-law problem is if in the dispute the two
states whose laws form the legal basis of the litigation disagree as to
whether the renvoi should be accepted. If both reject, or both accept the
doctrine, the result of the litigation will vary with the choice of the forum. In
the case stated above, had the Michigan court rejected the renvoi, judgment
would have been against the woman; if the suit had been brought in the
Illinois courts, and they too rejected the renvoi, judgment would be for the
woman. The same result would happen, though the courts would switch with
respect to which would hold liability, if both courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances: where the title
to land is in question, and where the validity of a decree of divorce is
challenged. In these cases the Conflict of Laws rule of the situs of the land,
or the domicile of the parties in the divorce case, is applied by the forum,
but any further reference goes only to the internal law. Thus, a person's title
to land, recognized by the situs, will be recognized by every court; and
every divorce, valid by the domicile of the parties, will be valid everywhere.
(Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)

X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving

movable property in Massachusetts, England, and France. The question
arises as to how this property is to be distributed among X's next of kin.

Assume (1) that this question arises in a Massachusetts court. There the rule
of the conflict of laws as to intestate succession to movables calls for an
application of the law of the deceased's last domicile. Since by hypothesis
X's last domicile was France, the natural thing for the Massachusetts court to
do would be to turn to French statute of distributions, or whatever
corresponds thereto in French law, and decree a distribution accordingly. An
examination of French law, however, would show that if a French court were
called upon to determine how this property should be distributed, it would
refer the distribution to the national law of the deceased, thus applying the
Massachusetts statute of distributions. So on the surface of things the
Massachusetts court has open to it alternative course of action: (a) either to
apply the French law is to intestate succession, or (b) to resolve itself into a
French court and apply the Massachusetts statute of distributions, on the
assumption that this is what a French court would do. If it accepts the so-
called renvoi doctrine, it will follow the latter course, thus applying its own
law.

This is one type of renvoi. A jural matter is presented which the conflict-of-
laws rule of the forum refers to a foreign law, the conflict-of-laws rule of
which, in turn, refers the matter back again to the law of the forum. This is
renvoi in the narrower sense. The German term for this judicial process is
'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)

After a decision has been arrived at that a foreign law is to be resorted to as

governing a particular case, the further question may arise: Are the rules as
to the conflict of laws contained in such foreign law also to be resorted to?
This is a question which, while it has been considered by the courts in but a
few instances, has been the subject of frequent discussion by textwriters and
essayists; and the doctrine involved has been descriptively designated by
them as the "Renvoyer" to send back, or the "Ruchversweisung", or the
"Weiterverweisung", since an affirmative answer to the question postulated
and the operation of the adoption of the foreign law in toto would in many
cases result in returning the main controversy to be decided according to the
law of the forum. ... (16 C.J.S. 872.)

Another theory, known as the "doctrine of renvoi", has been advanced. The
theory of the doctrine of renvoi is that the court of the forum, in determining
the question before it, must take into account the whole law of the other
jurisdiction, but also its rules as to conflict of laws, and then apply the law to
the actual question which the rules of the other jurisdiction prescribe. This
may be the law of the forum. The doctrine of the renvoi has generally been
repudiated by the American authorities. (2 Am. Jur. 296)

The scope of the theory of renvoi has also been defined and the reasons for
its application in a country explained by Prof. Lorenzen in an article in the
Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of
the article are quoted herein below:

The recognition of the renvoi theory implies that the rules of the conflict of
laws are to be understood as incorporating not only the ordinary or internal
law of the foreign state or country, but its rules of the conflict of laws as
well. According to this theory 'the law of a country' means the whole of its
law.

xxx xxx xxx

Von Bar presented his views at the meeting of the Institute of International
Law, at Neuchatel, in 1900, in the form of the following theses:

(1) Every court shall observe the law of its country as regards the
application of foreign laws.

(2) Provided that no express provision to the contrary exists, the court shall
respect:

(a) The provisions of a foreign law which disclaims the right to bind its
nationals abroad as regards their personal statute, and desires that said
personal statute shall be determined by the law of the domicile, or even by
the law of the place where the act in question occurred.

(b) The decision of two or more foreign systems of law, provided it be

certain that one of them is necessarily competent, which agree in attributing
the determination of a question to the same system of law.

xxx xxx xxx

If, for example, the English law directs its judge to distribute the personal
estate of an Englishman who has died domiciled in Belgium in accordance
with the law of his domicile, he must first inquire whether the law of Belgium
would distribute personal property upon death in accordance with the law of
domicile, and if he finds that the Belgian law would make the distribution in
accordance with the law of nationality - that is the English law - he must
accept this reference back to his own law.

We note that Article 946 of the California Civil Code is its conflict of laws
rule, while the rule applied in In re Kaufman, Supra, its internal law. If the
law on succession and the conflict of laws rules of California are to be
enforced jointly, each in its own intended and appropriate sphere, the
principle cited In re Kaufman should apply to citizens living in the State, but
Article 946 should apply to such of its citizens as are not domiciled in
California but in other jurisdictions. The rule laid down of resorting to the law
of the domicile in the determination of matters with foreign element involved
is in accord with the general principle of American law that the domiciliary
law should govern in most matters or rights which follow the person of the
owner.

When a man dies leaving personal property in one or more states, and
leaves a will directing the manner of distribution of the property, the law of
the state where he was domiciled at the time of his death will be looked to in
deciding legal questions about the will, almost as completely as the law of
situs is consulted in questions about the devise of land. It is logical that,
since the domiciliary rules control devolution of the personal estate in case
of intestate succession, the same rules should determine the validity of an
attempted testamentary dispostion of the property. Here, also, it is not that
the domiciliary has effect beyond the borders of the domiciliary state. The
rules of the domicile are recognized as controlling by the Conflict of Laws
rules at the situs property, and the reason for the recognition as in the case
of intestate succession, is the general convenience of the doctrine. The New
York court has said on the point: 'The general principle that a dispostiton of
a personal property, valid at the domicile of the owner, is valid anywhere, is
one of the universal application. It had its origin in that international comity
which was one of the first fruits of civilization, and it this age, when business
intercourse and the process of accumulating property take but little notice of
boundary lines, the practical wisdom and justice of the rule is more apparent
than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)

Appellees argue that what Article 16 of the Civil Code of the Philippines
pointed out as the national law is the internal law of California. But as above
explained the laws of California have prescribed two sets of laws for its
citizens, one for residents therein and another for those domiciled in other
jurisdictions. Reason demands that We should enforce the California internal
law prescribed for its citizens residing therein, and enforce the conflict of
laws rules for the citizens domiciled abroad. If we must enforce the law of
California as in comity we are bound to go, as so declared in Article 16 of our
Civil Code, then we must enforce the law of California in accordance with the
express mandate thereof and as above explained, i.e., apply the internal law
for residents therein, and its conflict-of-laws rule for those domiciled abroad.

It is argued on appellees' behalf that the clause "if there is no law to the
contrary in the place where the property is situated" in Sec. 946 of the
California Civil Code refers to Article 16 of the Civil Code of the Philippines
and that the law to the contrary in the Philippines is the provision in said
Article 16 that the national law of the deceased should govern. This
contention can not be sustained. As explained in the various authorities cited
above the national law mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article 946, which authorizes
the reference or return of the question to the law of the testator's domicile.
The conflict of laws rule in California, Article 946, Civil Code, precisely refers
back the case, when a decedent is not domiciled in California, to the law of
his domicile, the Philippines in the case at bar. The court of the domicile can
not and should not refer the case back to California; such action would leave
the issue incapable of determination because the case will then be like a
football, tossed back and forth between the two states, between the country
of which the decedent was a citizen and the country of his domicile. The
Philippine court must apply its own law as directed in the conflict of laws rule
of the state of the decedent, if the question has to be decided, especially as
the application of the internal law of California provides no legitime for
children while the Philippine law, Arts. 887(4) and 894, Civil Code of the
Philippines, makes natural children legally acknowledged forced heirs of the
parent recognizing them.

The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs.
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
cited by appellees to support the decision can not possibly apply in the case
at bar, for two important reasons, i.e., the subject in each case does not
appear to be a citizen of a state in the United States but with domicile in the
Philippines, and it does not appear in each case that there exists in the state
of which the subject is a citizen, a law similar to or identical with Art. 946 of
the California Civil Code.

We therefore find that as the domicile of the deceased Christensen, a citizen

of California, is the Philippines, the validity of the provisions of his will
depriving his acknowledged natural child, the appellant, should be governed
by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of
California, not by the internal law of California..

WHEREFORE, the decision appealed from is hereby reversed and the case
returned to the lower court with instructions that the partition be made as
the Philippine law on succession provides. Judgment reversed, with costs
against appellees.

Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala

and Makalintal, JJ., concur.
Bengzon, C.J., took no part.
 THIRD DIVISION

G.R. No. 193707, December 10, 2014

NORMA A. DEL SOCORRO, FOR AND IN BEHALF OF HER MINOR CHILD

RODERIGO NORJO VAN WILSEM, Petitioner, v. ERNST JOHAN
BRINKMAN VAN WILSEM, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to reverse and set aside the Orders1 dated February
19, 2010 and September 1, 2010, respectively, of the Regional Trial Court of
Cebu City (RTC-Cebu), which dismissed the criminal case entitled People of
the Philippines v. Ernst Johan Brinkman Van Wilsem, docketed as Criminal
Case No. CBU-85503, for violation of Republic Act (R.A.) No. 9262,
otherwise known as the Anti-Violence Against Women and Their Children Act
of 2004.

The following facts are culled from the records:

Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van
Wilsem contracted marriage in Holland on September 25, 1990.2 On January
19, 1994, they were blessed with a son named Roderigo Norjo Van Wilsem,
who at the time of the filing of the instant petition was sixteen (16) years of
age.3

Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a

Divorce Decree issued by the appropriate Court of Holland.4 At that time,
their son was only eighteen (18) months old.5 Thereafter, petitioner and her
son came home to the Philippines.6

According to petitioner, respondent made a promise to provide monthly

support to their son in the amount of Two Hundred Fifty (250) Guildene
(which is equivalent to Php17,500.00 more or less).7 However, since the
arrival of petitioner and her son in the Philippines, respondent never gave
support to the son, Roderigo.8

Not long thereafter, respondent came to the Philippines and remarried in

Pinamungahan, Cebu, and since then, have been residing
thereat.9 Respondent and his new wife established a business known as
Paree Catering, located at Barangay Tajao, Municipality of Pinamungahan,
Cebu City.10 To date, all the parties, including their son, Roderigo, are
presently living in Cebu City.11

On August 28, 2009, petitioner, through her counsel, sent a letter

demanding for support from respondent. However, respondent refused to
receive the letter.12

Because of the foregoing circumstances, petitioner filed a complaint-affidavit

with the Provincial Prosecutor of Cebu City against respondent for violation
of Section 5, paragraph E(2) of R.A. No. 9262 for the latter’s unjust refusal
to support his minor child with petitioner.13 Respondent submitted his
counter-affidavit thereto, to which petitioner also submitted her reply-
affidavit.14 Thereafter, the Provincial Prosecutor of Cebu City issued a
Resolution recommending the filing of an information for the crime charged
against herein respondent.

The information, which was filed with the RTC-Cebu and raffled to Branch 20
thereof, states that:

That sometime in the year 1995 and up to the present, more or less, in the
Municipality of Minglanilla, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did then and
there wilfully, unlawfully and deliberately deprive, refuse and still continue to
deprive his son RODERIGO NORJO VAN WILSEM, a fourteen (14) year old
minor, of financial support legally due him, resulting in economic abuse to
the victim.

CONTRARY TO LAW.15

Upon motion and after notice and hearing, the RTC-Cebu issued a Hold
Departure Order against respondent.16 Consequently, respondent was
arrested and, subsequently, posted bail.17

Petitioner also filed a Motion/Application of Permanent Protection Order to

which respondent filed his Opposition.18 Pending the resolution thereof,
respondent was arraigned.19
Subsequently, without the RTC-Cebu having resolved the application of the
protection order, respondent filed a Motion to Dismiss on the ground of: (1)
lack of jurisdiction over the offense charged; and (2) prescription of the
crime charged.20

On February 19, 2010, the RTC-Cebu issued the herein assailed

Order,21 dismissing the instant criminal case against respondent on the
ground that the facts charged in the information do not constitute an offense
with respect to the respondent who is an alien, the dispositive part of which
states:

WHEREFORE, the Court finds that the facts charged in the information do not
constitute an offense with respect to the accused, he being an alien, and
accordingly, orders this case DISMISSED.

The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his
provisional liberty is hereby cancelled (sic) and ordered released.

SO ORDERED.

Cebu City, Philippines, February 19, 2010.22

Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating

respondent’s obligation to support their child under Article 19523 of the
Family Code, thus, failure to do so makes him liable under R.A. No. 9262
which “equally applies to all persons in the Philippines who are obliged to
support their minor children regardless of the obligor’s nationality.”24

On September 1, 2010, the lower court issued an Order25 denying

petitioner’s Motion for Reconsideration and reiterating its previous ruling.
Thus:

x x x The arguments therein presented are basically a rehash of those

advanced earlier in the memorandum of the prosecution. Thus, the court
hereby reiterates its ruling that since the accused is a foreign national he is
not subject to our national law (The Family Code) in regard to a parent’s
duty and obligation to give support to his child. Consequently, he cannot be
charged of violating R.A. 9262 for his alleged failure to support his child.
Unless it is conclusively established that R.A. 9262 applies to a foreigner
who fails to give support to his child, notwithstanding that he is not bound
by our domestic law which mandates a parent to give such support, it is the
considered opinion of the court that no prima faciecase exists against the
accused herein, hence, the case should be dismissed.
WHEREFORE, the motion for reconsideration is hereby DENIED for lack of
merit.

SO ORDERED.

Cebu City, Philippines, September 1, 2010.26

Hence, the present Petition for Review on Certiorari raising the following
issues:

1. Whether or not a foreign national has an obligation to support

his minor child under Philippine law; and

2. Whether or not a foreign national can be held criminally liable

under R.A. No. 9262 for his unjustified failure to support his
minor child.27

At the outset, let it be emphasized that We are taking cognizance of the

instant petition despite the fact that the same was directly lodged with the
Supreme Court, consistent with the ruling in Republic v. Sunvar Realty
Development Corporation,28 which lays down the instances when a ruling of
the trial court may be brought on appeal directly to the Supreme Court
without violating the doctrine of hierarchy of courts, to wit:

x x x Nevertheless, the Rules do not prohibit any of the parties from filing a
Rule 45 Petition with this Court, in case only questions of law are raised
or involved. This latter situation was one that petitioners found themselves
in when they filed the instant Petition to raise only questions of law.

In Republic v. Malabanan, the Court clarified the three modes of appeal from
decisions of the RTC, to wit: (1) by ordinary appeal or appeal by writ of error
under Rule 41, whereby judgment was rendered in a civil or criminal action
by the RTC in the exercise of its original jurisdiction; (2) by a petition for
review under Rule 42, whereby judgment was rendered by the RTC in the
exercise of its appellate jurisdiction; and (3) by a petition for review
on certiorari before the Supreme Court under Rule 45. “The first mode of
appeal is taken to the [Court of Appeals] on questions of fact or mixed
questions of fact and law. The second mode of appeal is brought to the CA
on questions of fact, of law, or mixed questions of fact and law. The third
mode of appeal is elevated to the Supreme Court only on questions
of law.” (Emphasis supplied)
There is a question of law when the issue does not call for an examination of
the probative value of the evidence presented or of the truth or falsehood of
the facts being admitted, and the doubt concerns the correct application of
law and jurisprudence on the matter. The resolution of the issue must rest
solely on what the law provides on the given set of circumstances.29

Indeed, the issues submitted to us for resolution involve questions of law –

the response thereto concerns the correct application of law and
jurisprudence on a given set of facts, i.e., whether or not a foreign national
has an obligation to support his minor child under Philippine law; and
whether or not he can be held criminally liable under R.A. No. 9262 for his
unjustified failure to do so.

It cannot be negated, moreover, that the instant petition highlights a novel

question of law concerning the liability of a foreign national who allegedly
commits acts and omissions punishable under special criminal laws,
specifically in relation to family rights and duties. The inimitability of the
factual milieu of the present case, therefore, deserves a definitive ruling by
this Court, which will eventually serve as a guidepost for future cases.
Furthermore, dismissing the instant petition and remanding the same to the
CA would only waste the time, effort and resources of the courts. Thus, in
the present case, considerations of efficiency and economy in the
administration of justice should prevail over the observance of the hierarchy
of courts.

Now, on the matter of the substantive issues, We find the petition

meritorious. Nonetheless, we do not fully agree with petitioner’s contentions.

To determine whether or not a person is criminally liable under R.A. No.

9262, it is imperative that the legal obligation to support exists.

Petitioner invokes Article 19530 of the Family Code, which provides the
parent’s obligation to support his child. Petitioner contends that
notwithstanding the existence of a divorce decree issued in relation to Article
26 of the Family Code,31 respondent is not excused from complying with his
obligation to support his minor child with petitioner.

On the other hand, respondent contends that there is no sufficient and clear
basis presented by petitioner that she, as well as her minor son, are entitled
to financial support.32 Respondent also added that by reason of the Divorce
Decree, he is not obligated to petitioner for any financial support.33

On this point, we agree with respondent that petitioner cannot rely on Article
19534 of the New Civil Code in demanding support from respondent, who is a
foreign citizen, since Article 1535 of the New Civil Code stresses the principle
of nationality. In other words, insofar as Philippine laws are concerned,
specifically the provisions of the Family Code on support, the same only
applies to Filipino citizens. By analogy, the same principle applies to
foreigners such that they are governed by their national law with respect to
family rights and duties.36

The obligation to give support to a child is a matter that falls under family
rights and duties. Since the respondent is a citizen of Holland or the
Netherlands, we agree with the RTC-Cebu that he is subject to the laws of
his country, not to Philippine law, as to whether he is obliged to give support
to his child, as well as the consequences of his failure to do so.37

In the case of Vivo v. Cloribel,38 the Court held that –

Furthermore, being still aliens, they are not in position to invoke the
provisions of the Civil Code of the Philippines, for that Code cleaves
to the principle that family rights and duties are governed by their
personal law, i.e., the laws of the nation to which they belong even when
staying in a foreign country (cf. Civil Code, Article 15).39

It cannot be gainsaid, therefore, that the respondent is not obliged to

support petitioner’s son under Article 195 of the Family Code as a
consequence of the Divorce Covenant obtained in Holland. This does not,
however, mean that respondent is not obliged to support petitioner’s
son altogether.

In international law, the party who wants to have a foreign law applied to a
dispute or case has the burden of proving the foreign law.40 In the present
case, respondent hastily concludes that being a national of the Netherlands,
he is governed by such laws on the matter of provision of and capacity to
support.41 While respondent pleaded the laws of the Netherlands in
advancing his position that he is not obliged to support his son, he never
proved the same.

It is incumbent upon respondent to plead and prove that the national law of
the Netherlands does not impose upon the parents the obligation to support
their child (either before, during or after the issuance of a divorce decree),
because Llorente v. Court of Appeals,42 has already enunciated that:

True, foreign laws do not prove themselves in our jurisdiction and our courts
are not authorized to take judicial notice of them. Like any other fact, they
must be alleged and proved. 43
In view of respondent’s failure to prove the national law of the Netherlands
in his favor, the doctrine of processual presumption shall govern. Under this
doctrine, if the foreign law involved is not properly pleaded and proved, our
courts will presume that the foreign law is the same as our local or domestic
or internal law.44 Thus, since the law of the Netherlands as regards the
obligation to support has not been properly pleaded and proved in the
instant case, it is presumed to be the same with Philippine law, which
enforces the obligation of parents to support their children and penalizing
the non-compliance therewith.

Moreover, while in Pilapil v. Ibay-Somera',45 the Court held that a divorce

obtained in a foreign land as well as its legal effects may be recognized in
the Philippines in view of the nationality principle on the matter of status of
persons, the Divorce Covenant presented by respondent does not completely
show that he is not liable to give support to his son after the divorce decree
was issued. Emphasis is placed on petitioner’s allegation that under the
second page of the aforesaid covenant, respondent’s obligation to support
his child is specifically stated,46 which was not disputed by respondent.

We likewise agree with petitioner that notwithstanding that the national law
of respondent states that parents have no obligation to support their
children or that such obligation is not punishable by law, said law would still
not find applicability, in light of the ruling in Bank of America, NT and SA v.
American Realty Corporation,47 to wit:

In the instant case, assuming arguendo that the English Law on the matter
were properly pleaded and proved in accordance with Section 24, Rule 132
of the Rules of Court and the jurisprudence laid down in Yao Kee, et al. vs.
Sy-Gonzales, said foreign law would still not find applicability.

Thus, when the foreign law, judgment or contract is contrary to a

sound and established public policy of the forum, the said foreign
law, judgment or order shall not be applied.

Additionally, prohibitive laws concerning persons, their acts or property, and

those which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign
country.

The public policy sought to be protected in the instant case is the principle
imbedded in our jurisdiction proscribing the splitting up of a single cause of
action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent —
If two or more suits are instituted on the basis of the same cause of action,
the filing of one or a judgment upon the merits in any one is available as a
ground for the dismissal of the others.
Moreover, foreign law should not be applied when its application
would work undeniable injustice to the citizens or residents of the
forum. To give justice is the most important function of law; hence, a law,
or judgment or contract that is obviously unjust negates the fundamental
principles of Conflict of Laws.48

Applying the foregoing, even if the laws of the Netherlands neither enforce a
parent’s obligation to support his child nor penalize the non-compliance
therewith, such obligation is still duly enforceable in the Philippines because
it would be of great injustice to the child to be denied of financial support
when the latter is entitled thereto.

We emphasize, however, that as to petitioner herself, respondent is no

longer liable to support his former wife, in consonance with the ruling in San
Luis v. San Luis,49 to wit:

As to the effect of the divorce on the Filipino wife, the Court ruled that she
should no longer be considered married to the alien spouse. Further, she
should not be required to perform her marital duties and obligations. It held:

To maintain, as private respondent does, that, under our laws,

petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just . Petitioner should not be
obliged to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to be one of
her heirs with possible rights to conjugal property. She should not be
discriminated against in her own country if the ends of justice are to
be served. (Emphasis added)50

Based on the foregoing legal precepts, we find that respondent may be

made liable under Section 5(e) and (i) of R.A. No. 9262 for unjustly refusing
or failing to give support to petitioner’s son, to wit:

SECTION 5. Acts of Violence Against Women and Their Children.- The crime
of violence against women and their children is committed through any of
the following acts:chanroblesvirtuallawlibrary
xxxx
(e) Attempting to compel or compelling the woman or her child to engage in
conduct which the woman or her child has the right to desist from or desist
from conduct which the woman or her child has the right to engage in, or
attempting to restrict or restricting the woman's or her child's freedom of
movement or conduct by force or threat of force, physical or other harm or
threat of physical or other harm, or intimidation directed against the woman
or child. This shall include, but not limited to, the following acts committed
with the purpose or effect of controlling or restricting the woman's or her
child's movement or conduct:

xxxx
(2) Depriving or threatening to deprive the woman or her children of
financial support legally due her or her family , or deliberately
providing the woman's children insufficient financial support;

xxxx

(i) Causing mental or emotional anguish, public ridicule or humiliation to the

woman or her child, including, but not limited to, repeated verbal and
emotional abuse, and denial of financial support or custody of minor
children of access to the woman's child/children.51

Under the aforesaid special law, the deprivation or denial of financial support
to the child is considered an act of violence against women and children.

In addition, considering that respondent is currently living in the Philippines,

we find strength in petitioner’s claim that the Territoriality Principle in
criminal law, in relation to Article 14 of the New Civil Code, applies to the
instant case, which provides that:“[p]enal laws and those of public security
and safety shall be obligatory upon all who live and sojourn in Philippine
territory, subject to the principle of public international law and to treaty
stipulations.” On this score, it is indisputable that the alleged continuing
acts of respondent in refusing to support his child with petitioner is
committed here in the Philippines as all of the parties herein are residents of
the Province of Cebu City. As such, our courts have territorial jurisdiction
over the offense charged against respondent. It is likewise irrefutable that
jurisdiction over the respondent was acquired upon his arrest.

Finally, we do not agree with respondent’s argument that granting, but not
admitting, that there is a legal basis for charging violation of R.A. No. 9262
in the instant case, the criminal liability has been extinguished on the ground
of prescription of crime52 under Section 24 of R.A. No. 9262, which provides
that:
SECTION 24. Prescriptive Period. – Acts falling under Sections 5(a) to 5(f)
shall prescribe in twenty (20) years. Acts falling under Sections 5(g) to 5(I)
shall prescribe in ten (10) years.

The act of denying support to a child under Section 5(e)(2) and (i) of R.A.
No. 9262 is a continuing offense,53 which started in 1995 but is still ongoing
at present. Accordingly, the crime charged in the instant case has clearly not
prescribed.

Given, however, that the issue on whether respondent has provided support
to petitioner’s child calls for an examination of the probative value of the
evidence presented, and the truth and falsehood of facts being admitted, we
hereby remand the determination of this issue to the RTC-Cebu which has
jurisdiction over the case.

WHEREFORE, the petition is GRANTED. The Orders dated February 19,

2010 and September 1, 2010, respectively, of the Regional Trial Court of the
City of Cebu are hereby REVERSED and SET ASIDE. The case
is REMANDED to the same court to conduct further proceedings based on
the merits of the case.

SO ORDERED.

Velasco, Jr., (Chairperson), Villarama, Jr., Mendoza,*and Reyes, JJ., concur.

 THIRD DIVISION

G.R. No. 195549, September 03, 2014

WILLAWARE PRODUCTS CORPORATION, Petitioner, v. JESICHRIS

MANUFACTURING CORPORATION, Respondent.

DECISION

PERALTA, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking to set aside the Decision1 dated November 24, 2010
and Resolution2 dated February 10, 2011 of the Court of Appeals (CA) in CA-
G.R. CV No. 86744.

The facts, as found by the Regional Trial Court (RTC), are as follows:

[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed

this present complaint for damages for unfair competition with prayer for
permanent injunction to enjoin [petitioner] Willaware Products Corporation
([petitioner] for short) from manufacturing and distributing plastic-made
automotive parts similar to those of [respondent].

[Respondent] alleged that it is a duly registered partnership engaged in the

manufacture and distribution of plastic and metal products, with principal
office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since its
registration in 1992, [respondent] has been manufacturing in its Caloocan
plant and distributing throughout the Philippines plastic-made automotive
parts. [Petitioner], on the other hand, which is engaged in the manufacture
and distribution of kitchenware items made of plastic and metal has its office
near that of [respondent].

[Respondent] further alleged that in view of the physical proximity of

[petitioner’s] office to [respondent’s] office, and in view of the fact that
some of the [respondent’s] employees had transferred to [petitioner],
[petitioner] had developed familiarity with [respondent’s] products,
especially its plastic-made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner]

had been manufacturing and distributing the same automotive parts with
exactly similar design, same material and colors but was selling these
products at a lower price as [respondent’s] plastic-made automotive parts
and to the same customers.

[Respondent] alleged that it had originated the use of plastic in place of

rubber in the manufacture of automotive underchassis parts such as spring
eye bushing, stabilizer bushing, shock absorber bushing, center bearing
cushions, among others. [Petitioner’s] manufacture of the same automotive
parts with plastic material was taken from [respondent’s] idea of using
plastic for automotive parts. Also, [petitioner] deliberately copied
[respondent’s] products all of which acts constitute unfair competition, is
and are contrary to law, morals, good customs and public policy and have
caused [respondent] damages in terms of lost and unrealized profits in the
amount of TWO MILLION PESOS as of the date of [respondent’s] complaint.

Furthermore, [petitioner’s] tortuous conduct compelled [respondent] to

institute this action and thereby to incur expenses in the way of attorney’s
fees and other litigation expenses in the amount of FIVE HUNDRED
THOUSAND PESOS (P500,000.00).

In its Answer, [petitioner] denies all the allegations of the [respondent]

except for the following facts: that it is engaged in the manufacture and
distribution of kitchenware items made of plastic and metal and that there’s
physical proximity of [petitioner’s] office to [respondent]’s office, and that
some of [respondent’s] employees had transferred to [petitioner] and that
over the years [petitioner] had developed familiarity with [respondent’s]
products, especially its plastic made automotive parts.

As its Affirmative Defenses, [petitioner] claims that there can be no unfair

competition as the plastic-made automotive parts are mere reproductions of
original parts and their construction and composition merely conforms to the
specifications of the original parts of motor vehicles they intend to replace.
Thus, [respondent] cannot claim that it “originated” the use of plastic for
these automotive parts. Even assuming for the sake of argument that
[respondent] indeed originated the use of these plastic automotive parts, it
still has no exclusive right to use, manufacture and sell these as it has no
patent over these products. Furthermore, [respondent] is not the only
exclusive manufacturer of these plastic-made automotive parts as there are
other establishments which were already openly selling them to the
public.3cralawred

After trial on the merits, the RTC ruled in favor of respondent. It ruled that
petitioner clearly invaded the rights or interest of respondent by deliberately
copying and performing acts amounting to unfair competition. The RTC
further opined that under the circumstances, in order for respondent’s
property rights to be preserved, petitioner’s acts of manufacturing similar
plastic-made automotive parts such as those of respondent’s and the selling
of the same products to respondent’s customers, which it cultivated over the
years, will have to be enjoined. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the court finds the defendant liable to
plaintiff Two Million (P2,000,000.00) Pesos, as actual damages, One
Hundred Thousand (P100,000.00) Pesos as attorney’s fees and One Hundred
Thousand (P100,000.00) Pesos for exemplary damages. The court hereby
permanently [enjoins] defendant from manufacturing the plastic-made
automotive parts as those manufactured by plaintiffs.

SO ORDERED.4cralawred

Thus, petitioner appealed to the CA.

On appeal, petitioner asserts that if there is no intellectual property

protecting a good belonging to another, the copying thereof for production
and selling does not add up to unfair competition as competition is promoted
by law to benefit consumers. Petitioner further contends that it did not lure
away respondent’s employees to get trade secrets. It points out that the
plastic spare parts sold by respondent are traded in the market and the
copying of these can be done by simply buying a sample for a mold to be
made.

Conversely, respondent averred that copyright and patent registrations are

immaterial for an unfair competition case to prosper under Article 28 of the
Civil Code. It stresses that the characteristics of unfair competition are
present in the instant case as the parties are trade rivals and petitioner’s
acts are contrary to good conscience for deliberately copying its products
and employing its former employees.

In a Decision dated November 24, 2010, the CA affirmed with modification

the ruling of the RTC. Relevant portions of said decision
read:ChanRoblesVirtualawlibrary

Despite the evidence showing that Willaware took dishonest steps in

advancing its business interest against Jesichris, however, the Court finds no
basis for the award by the RTC of actual damages. One is entitled to actual
damages as one has duly proven. The testimony of Quejada, who was
engaged by Jesichris in 2001 to audit its business, only revealed that there
was a discrepancy between the sales of Jesichris from 2001 to 2002. No
amount was mentioned. As for Exhibit “Q,” which is a copy of the
comparative income statement of Jesichris for 1999-2002, it shows the
decline of the sales in 2002 in comparison with those made in 2001 but it
does not disclose if this pertains to the subject automotive parts or to the
other products of Jesichris like plates.

In any event, it was clearly shown that there was unfair competition on the
part of Willaware that prejudiced Jesichris. It is only proper that nominal
damages be awarded in the amount of Two Hundred Thousand Pesos
(P200,000.00) in order to recognize and vindicate Jesichris’ rights. The RTC’s
award of attorney’s fees and exemplary damages is also maintained.

xxxx

WHEREFORE, premises considered, the Decision dated April 15, 2003 of the
Regional Trial Court of Caloocan City, Branch 131, in Civil Case No. C-19771
is hereby MODIFIED. The award of Two Million Pesos (P2,000,000.00)
actual damages is deleted and in its place, Two Hundred Thousand Pesos
nominal damages is awarded.

SO ORDERED.5

Dissatisfied, petitioner moved for reconsideration. However, the same was

denied for lack of merit by the CA in a Resolution dated February 10, 2011.

Hence, the present Petition for Review wherein petitioner raises the following
issues for our resolution:ChanRoblesVirtualawlibrary

(1) Whether or not there is unfair competition under human relations when
the parties are not competitors and there is actually no damage on the
part of Jesichris?
(2) Consequently, if there is no unfair competition, should there be moral
damages and attorney’s fees?
(3) Whether or not the addition of nominal damages is proper although no
rights have been established?
(4) If ever the right of Jesichris refers to its copyright on automotive parts,
should it be considered in the light of the said copyrights were
considered to be void by no less than this Honorable Court in SC GR No.
161295?
(5) If the right involved is “goodwill” then the issue is: whether or not
Jesichris has established “goodwill?”6
In essence, the issue for our resolution is: whether or not petitioner
committed acts amounting to unfair competition under Article 28 of the Civil
Code.

Prefatorily, we would like to stress that the instant case falls under Article 28
of the Civil Code on human relations, and not unfair competition under
Republic Act No. 8293,7 as the present suit is a damage suit and the
products are not covered by patent registration. A fortiori, the existence of
patent registration is immaterial in the present case.

The concept of “unfair competition” under Article 28 is very much broader

than that covered by intellectual property laws. Under the present article,
which follows the extended concept of “unfair competition” in American
jurisdictions, the term covers even cases of discovery of trade secrets of a
competitor, bribery of his employees, misrepresentation of all kinds,
interference with the fulfillment of a competitor’s contracts, or any malicious
interference with the latter’s business.8cralawred

With that settled, we now come to the issue of whether or not petitioner
committed acts amounting to unfair competition under Article 28 of the Civil
Code.

We find the petition bereft of merit.

Article 28 of the Civil Code provides that “unfair competition in agricultural,

commercial or industrial enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust, oppressive or high-
handed method shall give rise to a right of action by the person who thereby
suffers damage.”

From the foregoing, it is clear that what is being sought to be prevented is

not competition per se but the use of unjust, oppressive or high- handed
methods which may deprive others of a fair chance to engage in business or
to earn a living. Plainly, what the law prohibits is unfair competition and not
competition where the means used are fair and legitimate.

In order to qualify the competition as “unfair,” it must have two

characteristics: (1) it must involve an injury to a competitor or trade rival,
and (2) it must involve acts which are characterized as “contrary to good
conscience,” or “shocking to judicial sensibilities,” or otherwise unlawful; in
the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The
public injury or interest is a minor factor; the essence of the matter appears
to be a private wrong perpetrated by unconscionable means.9cralawred

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the
manufacture of plastic-made automotive parts. Second, the acts of the
petitioner were clearly “contrary to good conscience” as petitioner admitted
having employed respondent’s former employees, deliberately copied
respondent’s products and even went to the extent of selling these products
to respondent’s customers.10cralawred

To bolster this point, the CA correctly pointed out that petitioner’s hiring of
the former employees of respondent and petitioner’s act of copying the
subject plastic parts of respondent were tantamount to unfair
competition, viz.:ChanRoblesVirtualawlibrary

The testimonies of the witnesses indicate that [petitioner] was in bad faith in
competing with the business of [respondent]. [Petitioner’s] acts can be
characterized as executed with mischievous subtle calculation. To illustrate,
in addition to the findings of the RTC, the Court observes that [petitioner] is
engaged in the production of plastic kitchenware previous to its
manufacturing of plastic automotive spare parts, it engaged the services of
the then mold setter and maintenance operator of [respondent], De
Guzman, while he was employed by the latter. De Guzman was hired by
[petitioner] in order to adjust its machinery since quality plastic automotive
spare parts were not being made. It baffles the Court why [petitioner]
cannot rely on its own mold setter and maintenance operator to remedy its
problem. [Petitioner’s] engagement of De Guzman indicates that it is
banking on his experience gained from working for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and

delivery man of [respondent], was fired because he was blamed of spying in
favor of [petitioner]. Despite this accusation, he did not get angry. Later on,
he applied for and was hired by [petitioner] for the same position he
occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De
Guzman.11

Thus, it is evident that petitioner is engaged in unfair competition as shown

by his act of suddenly shifting his business from manufacturing kitchenware
to plastic-made automotive parts; his luring the employees of the
respondent to transfer to his employ and trying to discover the trade secrets
of the respondent.12cralawred
Moreover, when a person starts an opposing place of business, not for the
sake of profit to himself, but regardless of loss and for the sole purpose of
driving his competitor out of business so that later on he can take advantage
of the effects of his malevolent purpose, he is guilty of wanton wrong.13 As
aptly observed by the court a quo, the testimony of petitioner’s witnesses
indicate that it acted in bad faith in competing with the business of
respondent, to wit:ChanRoblesVirtualawlibrary

[Petitioner], thru its General Manager, William Salinas, Jr., admitted that it
was never engaged in the business of plastic-made automotive parts until
recently, year 2000:
Atty. Bautista: The business name of Willaware Product Corporation is
kitchenware, it is (sic) not? Manufacturer of kitchenware and distributor of
kitchenware, is it not?
Mr. Salinas: Yes, sir.

Atty. Bautista: And you said you have known the [respondent] Jesichris
Manufacturing Co., you have known it to be manufacturing plastic
automotive products, is it not?
Mr. Salinas: Yes, sir.

Atty. Bautista: In fact, you have been (sic) physically become familiar with
these products, plastic automotive products of Jesichris?
Mr. Salinas: Yes, sir.
How [petitioner] was able to manufacture the same products, in terms of
color, size, shape and composition as those sold by Jesichris was due largely
to the sudden transfer of Jesichris’ employees to Willaware.
Atty. Bautista: Since when have you been familiar with Jesichris
Manufacturing Company?
Mr. Salinas: Since they transferred there (sic) our place.

Atty. Bautista: And that was in what year?

Mr. Salinas: Maybe four (4) years. I don’t know the exact date.

Atty. Bautista: And some of the employees of Jesichris Manufacturing Co.

have transferred to your company, is it not?
Mr. Salinas: Yes, sir.

Atty. Bautista: How many, more or less?

Mr. Salinas: More or less, three (3).

Atty. Bautista: And when, in what year or month did they transfer to you?
Mr. Salinas: First, November 1.
Atty. Bautista: Year 2000?
Mr. Salinas: Yes sir. And then the other maybe February, this year. And the
other one, just one month ago.
That [petitioner] was clearly out to take [respondent] out of business was
buttressed by the testimony of [petitioner’s] witness, Joel Torres:
Q: Are you familiar with the [petitioner], Willaware Product Corporation?
A: Yes, sir.

Q: Will you kindly inform this court where is the office of this Willaware
Product Corporation (sic)?
A: At Mithi Street, Caloocan City, sir.

Q: And Mr. Witness, sometime second Saturday of January 2001, will you
kindly inform this court what unusual even (sic) transpired between you and
Mr. Salinas on said date?
A: There was, sir.

Q: What is that?
A: Sir, I was walking at that time together with my wife going to the market
and then I passed by the place where they were having a drinking spree, sir.

Q: You mentioned they, who were they who were drinking at that time?
A: I know one Jun Molina, sir.

Q: And who else was there?

A: William Salinas, sir.

Q: And will you kindly inform us what happened when you spotted upon
them drinking?
A: Jun Molina called me, sir.

Q: And what happened after that?

A: At that time, he offered me a glass of wine and before I was able to drink
the wine, Mr. Salinas uttered something, sir.

Q: And what were those words uttered by Mr. Salinas to you?

A: “O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?”

Q: And what did you do after that, after hearing those words?
A: And he added these words, sir. “sabihin mo sa amo mo, dalawang taon
na lang pababagsakin ko na siya.”

Q: Alright, hearing those words, will you kindly tell this court whom did you
gather to be referred to as your “amo”?
A: Mr. Jessie Ching, sir.14

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil

Code.

However, since the award of Two Million Pesos (P2,000,000.00) in actual

damages had been deleted and in its place Two Hundred Thousand Pesos
(P200,000.00) in nominal damages was awarded, the attorney’s fees should
concomitantly be modified and lowered to Fifty Thousand Pesos
(P50,000.00).

WHEREFORE, the instant petition is DENIED. The Decision dated

November 24, 2010 and Resolution dated February 10, 2011 of the Court of
Appeals in CA-G.R. CV No. 86744 are
hereby AFFIRMED with MODIFICATION that the award of attorney’s fees
be lowered to Fifty Thousand Pesos (P50,000.00).

SO ORDERED. library

Velasco, Jr., (Chairperson), Bersamin,* Villarama, Jr., and Reyes, JJ., concur.