conflicts finals reviewer 2009-10a

CONFLICT OF LAWS – PRIL FINALS REVIEWER!Antonio Arcilla | Rachelle Mayuga | Charisse Mendoza

Jaklyn Pineda | Dahlia Salamat | Aida Villanueva (Second Semester, A.Y. 2009-2010)

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Examples of Conflict of Law Rules in the Philippines

1. Art. 15 CC Lex Patriae2. Art. 1251 (par. 3) CC Lex Domicili3. Art. 16 CC Lex Situs / Lex Rei Sitae4. Art. 17 (par. 1) CC Lex Loci Contractus5. Art. 71 CC Lex Loci Celebrationis6. Art. 26 (par. 1) FC Lex Loci Celebrationis7. Art. 1306 CC Lex Loci Intentionis

Civil Code : Arts. 15, 16, 17, 71, 75, 124, 815-817, 818-819, 1039, 1753, 1306

Art. 15Laws relating to family rights and duties, or to status, condition and capacity of persons are binding upon citizens of the Philippines even though living abroad.

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

However, intestate and testamentary succession, both with respect to the order of successions 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 wherein said property may be found.

Art. 17The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their execution.

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.

Art. 71 (Amended by Art. 26, FC)All marriages performed outside the Philippines in accordance with the laws in force in the country where they were performed, and valid there as such, shall also be valid in this country, except bigamous, polygamous, or incestuous marriages as determined by Philippine law. Art. 75 (See Art. 7 and 10, FC)Marriages between Filipino citizens abroad may be solemnized by consuls and vice-consuls of the Republic of the Philippines. The duties of the local civil registrar and of a judge or justice of the peace or mayor with regard to the celebration of marriage shall be performed by such consuls and vice-consuls.

Art. 124 (See Art. 80, FC)If the marriage is between a citizen of the Philippines and a foreigner, whether celebrated in the Philippines or abroad, the following rules shall prevail:

(1) If the husband is a citizen of the Philippines while the wife is a foreigner, the provisions of this Code shall govern their relations; (2) If the husband is a foreigner and the wife is a citizen of the Philippines, the laws of the husband's country shall be

followed, without prejudice to the provisions of this Code with regard to immovable property.

Art. 815When a Filipino is in a foreign country, he is authorized to make a will in any of the forms established by the law of the country in which he may be. Such will may be probated in the Philippines.

Art. 816The will of an alien who is abroad produces effect in the Philippines if made with the formalities prescribed by the law of the place in which he resides, or according to the formalities observed in his country, or in conformity with those which this Code prescribes.

Art. 817A will made in the Philippines by a citizen or subject of another country, which is executed in accordance with the law of the country of which he is a citizen or subject, and which might be proved and allowed by the law of his own country, shall have the same effect as if executed according to the laws of the Philippines.

Art. 818Two or more persons cannot make a will jointly, or in the same instrument, either for their reciprocal benefit or for the benefit of a third person.

Art. 819Wills, prohibited by the preceding article, executed by Filipinos in a foreign country shall not be valid in the Philippines, even though authorized by the laws of the country where they may have been executed.

Art. 1251Payment shall be made in the place designated in the obligation. There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made wherever the thing might be at the moment the obligation was constituted. In any other case, the place of payment shall be the domicile of the debtor. If the debtor changes his domicile in bad faith or after he has incurred in delay, the additional expenses shall be borne by him.

These provisions are without prejudice to venue under the Rules of Court.

Art. 1306The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Art. 1753The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

Family Code: Arts. 10, 7.5, 26, 80, 184, 185, 187

Art. 7Marriage may be solemnized by:

(1) Any incumbent member of the judiciary within the court's jurisdiction; (2) Any priest, rabbi, imam, or minister of any church or religious sect duly authorized by his church or religious sect and registered with the civil registrar general,



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acting within the limits of the written authority granted by his church or religious sect and provided that at least one of the contracting parties belongs to the solemnizing officer's church or religious sect; (3) Any ship captain or airplane chief only in the case mentioned in Article 31;(4) Any military commander of a unit to which a chaplain is assigned, in the absence of the latter, during a military operation, likewise only in the cases mentioned in Article 32; (5) Any consul-general, consul or vice-consul in the case provided in Article 10.

Art. 10Marriages between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of the Republic of the Philippines. The issuance of the marriage license and the duties of the local civil registrar and of the solemnizing officer with regard to the celebration of marriage shall be performed by said consular official.

Art. 26All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law.

Art. 35The following marriages shall be void from the beginning:

(1) Those contracted by any party below eighteen years of age even with the consent of parents or guardians; (2) Those solemnized by any person not legally authorized to perform marriages unless such marriages were contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do so; (3) Those solemnized without license, except those covered the preceding Chapter; (4) Those bigamous or polygamous marriages not failing under Article 41; (5) Those contracted through mistake of one contracting party as to the identity of the other; and (6) Those subsequent marriages that are void under Article 53.

Art. 36A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest only after its solemnization.

Art. 37Marriages between the following are incestuous and void from the beginning, whether relationship between the parties be legitimate or illegitimate:

(1) Between ascendants and descendants of any degree; and (2) Between brothers and sisters, whether of the full or half blood. (81a)

Art. 38The following marriages shall be void from the beginning for reasons of public policy:

(1) Between collateral blood relatives whether legitimate or illegitimate, up to the fourth civil degree;

(2) Between step-parents and step-children; (3) Between parents-in-law and children-in-law; (4) Between the adopting parent and the adopted child; (5) Between the surviving spouse of the adopting parent and the adopted child; (6) Between the surviving spouse of the adopted child and the adopter; (7) Between an adopted child and a legitimate child of the adopter; (8) Between adopted children of the same adopter; and (9) Between parties where one, with the intention to marry the other, killed that other person's spouse, or his or her own spouse. (82)

Art. 80In the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence. This rule shall not apply:

(1) Where both spouses are aliens; (2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in the country where the property is located; and (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity.

Art. 184The following persons may not adopt: (1) The guardian with respect to the ward prior to the approval of the final accounts rendered upon the termination of their guardianship relation;

(2) Any person who has been convicted of a crime involving moral turpitude;

(3) An alien, except:(a) A former Filipino citizen who seeks to adopt a relative by consanguinity; (b) One who seeks to adopt the legitimate child of his or her Filipino spouse; or (c) One who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse a relative by consanguinity of the latter.

Aliens not included in the foregoing exceptions may adopt Filipino children in accordance with the rules on inter-country adoptions as may be provided by law. (28a, E. O. 91 and PD 603)

Art. 185Husband and wife must jointly adopt, except in the following cases: (1) When one spouse seeks to adopt his own illegitimate child; or (2) When one spouse seeks to adopt the legitimate child of the other. (29a, E. O. 91 and PD 603)

Art. 187The following may not be adopted: (1) A person of legal age, unless he or she is a child by nature of the adopter or his or her spouse, or, prior to the adoption, said person has been consistently considered and treated by the adopter as his or her own child during minority.

(2) An alien with whose government the Republic of the Philippines has no diplomatic relations; and



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(3) A person who has already been adopted unless such adoption has been previously revoked or rescinded.



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PART ONE – INTRODUCTION

I. SCOPE OF CONFLICT OF LAWS: NATURE, DEFINITION AND IMPORTANCE

A.DIVERSITY OF LAWS, CUSTOMS AND PRACTICES-division of world into many independent states with own laws + occurrence of events that contains elements significant to more than 1 legal system = conflict of laws-there had been attempts to have a uniform law:

1928 Sixth International Conference of American States in Havana: on PRIL

Bustamante Code: uniform provisions on civil law, commercial law, penal law and law on procedure

creation of the Inter-American Council of Jurists by OAS in 1948 - but has not achieved anything concrete

1951 Hague Convention on PRIL: on family law, succession and products liability

EAP notesGR: Laws have effect only within their territoriesBasis: every nation is sovereign and independent; another state can’t force our courts to apply their lawsX: When our own law provides that laws of other states are applicable

HILTON V GUYOT (1895)Gustave Guyot (liquidator for French firm CHARLES FORTRICH & CO.) sued co-partners of A.T. STEWART & CO. Henry Hilton and William Libbey (residents of NY) in FRENCH COURT for amount due to the French firm. French court ruled in his favor, so he sued Hilton and Libbey in US Circuit Court for enforcement of the French Judgment. US CC held judgment conclusive, entered decree in favor of Guyot W/O EXAMINING ANEW MERITS OF THE CASE.

WON US court should give force and effect to the French Judgment when French courts give no force and effect to the duly rendered judgments in US Courts against French citizensNO

GR: No law has any effect, of its own force, beyond the limits of the sovereignty from which its authority is derived. X: The extent to which the law of one nation, as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, DEPENDS UPON what our greatest jurists have been content to call THE COMITY OF NATIONS

COMITY-neither a matter of absolute obligation nor mere courtesy and good will-RECOGNITION WHICH ONE NATION ALLOWS WITHIN ITS TERRITORY …OF THE LEGISLATIVE…EXECUTIVE…OR JUDICIAL ACTS OF ANOTHER NATION,HAVING DUE REGARD BOTH TO ...INTERNATIONAL DUTY…AND CONVENIENCEAND TO THE RIGHTS OF ITS OWN CITIZENS OR OF OTHER PERSONS WHO ARE UNDER THE PROTECTION OF ITS LAWS

EAP notesLowers standard of comity: principle of retortion is a task for the legislature to do, not for the courts; the court in applying comity

was doing legislative act. Plus injustice is that private individuals cannot change laws so why make them suffer for the difference in laws in different states?

B. DEFINITIONDistinguished from Public International Law and other Disciplines Part of municipal law which governs cases involving a

foreign element MINOR: those universal principles of right and justice

which govern the courts of one state having before them cases involving ...the operation ...and effect of laws of another state or country

CHESIRE: part of law which comes into play when the issue before the court AFFECTS SOME FACT OR EVENT OR TRANSACTION that is SO CLOSELY CONNECTED W/ FOREIGN SYSTEM OF LAW as to necessitate recourse to that system

2nd ed, American Jurisprudence: part of the law of each state or nation which determines whether, in dealing w/ a legal situation, the law of some other state or nation will be ...recognized, ...given effect ...or applied

HILTON v. GUYOT: law concerning the rights of persons within the territory and dominion of one nation, by reason of acts, private or public, done within the dominion of another nation PIL vs. PRIL

Category PUBLIC IL PRIVATE IL

Applicability of ratione personae and ratione materiae

Relationships of states among themselves

Relationship of individuals in their private transactions which involve a foreign element

Sources of law

A38, ICJ Statute: *custom*treaties*GPIL*juridical decisions *teachings of most highly qualified publicists

GR: from internal law of each state, NOT from any international law extraneous to municipal law

NATIONAL CONFLICT RULES: Internal law of each country X: if conflict governed by treaty e.g. Hague Convention on the Conflict of Laws relating to the form of testamentary dispositions

INTERNATIONAL CONFLICT RULES: *international conventions*foreign case law*commentaries interpreting these conventions

Persons *States *Individuals



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involved *Internationally Recognized organizations

*Corporations

Transactions governed

State to stateGovernment to government

Private transactions

Remedies *Diplomatic protest*peaceful means of settlement of international disputes:>diplomatic negotiations>arbitration>conciliation*adjudication by filing case before int'l tribunals*war

*courts*admin tribunals

Municipal law vs. Conflict of Law rules in Municipal law

Municipal law Conflict of Law in ML

No foreign element present Involves foreign element

C.OBJECT, FUNCTION AND SCOPEObject and Function-provide rational and valid rules or guidelines in deciding cases where issue involved relates to more than one jurisdiction-protection of rational expectations-stability and uniformity of solutions

Scope-almost all subjects1. Jurisdiction of courts2. Evidence of proof of foreign law3. Personal law of individuals and juridical entities4. Naturalization law5. Laws on domicile and residence 6. Family relations7. Contracts8. Torts 9. Crimes10. Corpo law11. Property law12. International air transport (Warsaw convention)

II. HISTORY AND DEVELOPMENT OF CONFLICT OF LAWS

A.ROMAN LAW ORIGINRoman EmpireIus gentium:-law of nations in PIL-governs relations of States-body of rules developed by the PRAETOR PEREGRINUS to resolve disputes between ForeignersForeigners and Roman Citizens Ius Civile: applied only to Roman Citizens Italy

-Italy was divided into many city-states, each have own law - so they have conflicts of law problemsBARTOLUS (father of conflict of laws): formulated the THEORY OF STATUTES-the theory of statutes was used by the Italian city-states to resolve conflict of law issues STATUTES classification1. REAL STATUTES (STATUTA REALIA): applied to immovable

property w/n the state2. PERSONAL STATUTES (STATUTA PERSONALIA): followed

persons even outside his domicile, governed all questions concerning

…personal status…capacity…movables3. MIXED STATUTES (STATUTA MIXTA): on contracts - depend

on where entered 16th century FranceCHARLES DUMOULIN: method to determine what law would govern CONTRACTS BETWEEN DIFFERENT NATIONALSBERTRAND D'ARGENTE: PRINCIPLE OF UNIVERSAL SUCCESSION NetherlandsBURGUDNOU, RODENBERG, ULRICH HUBER (first used CONFLICT OF LAWS): State was under no obligation to apply foreign law UNLESS imposed by…treaty…COMITAS GENTIUM (Comity of Nations?)…on consideration of courtesy and expediencyJOHN VOET: no statue, real, personal or mixed, can act by itself beyond the territory of the legislator nor can it have any effect elsewhere against the will of the legislator of another state

-Territorial Principle: GR: laws of every state may operate ONLY WITHIN THE TERRITORIAL LIMIT OF SUCH STATEX: may recognize laws of another country PROVIDED that it will not prejudice the subjects of the sovereign whose recognition is sought

*Comitas Gentium (Comity of Nations) approach readily accepted-most trans-jurisdictional disputes to be resolved by the application of IUS GENTIUM or IUS COMMUNEIus Commne: supranational law based on Roman Law, became continental European Common Law -nations began codifying their national laws to include conflict of laws provisions:*Bavarian Code: theory of statutes*Prussian Code: theory of efficacy of contracts*French Civil Code: pattern for Civil Codes of Spain, Belgium, and Romania: nationality principle-adopted by RP: ART15, NCC J. JOSEPTH STORY: Commentaries on the Conflict of Laws - territorial theory/comitas gentium approach-territorial sovereignty, founded conflict of laws on the principle of comity of nations-adopted by JOSEPH BEALE, American Restatement of Conflict of Laws, developed territorial "VESTED RIGHTS" school of thought FREDERICH CARL VON SAVIGNY: System of Modern Law - Situs theory-advocated historical school of jurisprudence



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-applicationof foreign law was not due to comity BUT the resultant benefits for everyone concerned-founder of MODERN PRIL-theory of situs/seat of legal relationship: every element of a transaction be governed by the law of the place with which said element has the most substantive connection PASCUALE MANICINI: Nationality as the Basis of Law of Nations- nationality theory(sortof Mixed statute)-nationality theory on StatusCapacityPrivate interests of the individual-NEW THEORY OF PRIL

B.MODERN DEVELOPMENTS*Neostatutists: when two or more independent laws are applicable to a conflict of laws problem, the method so devised determines what law shall prevail*Internationalists: there should be a single body of rules that can solve problems involving foreign element*Territorialists: law of the State applied to persons and things within the State, no foreign law should be applied-branch: only rights vested or acquired under a foreign law are recognized but not the foreign law itself*2nd Restatement, William Reese: the law to be applied in a conflict of laws case is the law of the most significant relationship*CAVERS, CURRIE AND EHRENZWEIG: policy-centered approaches

Conflicts of Laws in the Philippines-only when RP became sovereign stateIn NCC: Article 15: nationality principleArt. 15. Laws relating to

*family rights and duties, *or to the status, *condition and *legal capacity of persons are

binding upon citizens of the Philippines, even though living abroad. (9a) Article 16(1): lex situs rule

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

Article 16(2): universal succession 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 wherein said property may be found.

Article 17(1): lex loci contractusArt. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed.

III. SOURCES OF CONFLICT OF LAWS

A.CODES AND STATUTESNote: ma’am just glossed over this. -Conflict of Laws from Continental Europe - codified - so Civil Codes are primary sources of Conflict of Laws rules-principle of ius gentium: codified in Roman Codes

In RP

Spanish Civil Code of 1888: enforced in RP Dec7, 1889 until August 30, 1950-Conflict of laws provisions adopted by RP NCCCode of Commerce of Spain: foreign transactions provisions - also enforced in Dec1, 1888

New:1987 Consti: Nationality, Comity

Special Statutes1. Corporation Code2. General Banking Act3. Act Instituting Foreign Currency System in the Philippines4. Philippine Foreign Law Guarantee Corporation5. Act Regulating Retail Business6. Anti-Dummy Law7. Nationalization of the Rice and Corn Industry8. Insurance Code9. Protection of Intellectual Property10. Patent Law11. Tradesmark Law12. COGSA13. Salvage Law14. Public Service Act15. Civil Aeronautics Act16. Philippine Overseas Shipping Act17. Investment Incentives Act18. Export Incentives Act19. RA 7722 liberalizing entry of foreign banks in the

Philippines

B.TREATIES AND INTERNATIONAL CONVENTIONS1. Convention on International Civil Aviation2. Convention for the Unification of Certain Rules relating to

international Carriage by Air - Warsaw Convention3. Convention on Offenses Committed on Board Aircraft4. Convention for Suppression of Unlawful Acts against the

Safety of Civil Aviation 5. UN COGSA6. Convention on the Consent to Marriage, Minimum Age for

Marriage and Registration of Marriages7. Convention on Traffic of Person8. Convention on the Elimination of All Forms of

Discrimination Against Women (CEDAW)9. Convention on Political Rights of Women10. International Convention for the Suppression of the Traffic

in Women and Children11. Convention for the Suppression of the Traffic in Persons

and of the Exploitation of the Prostitution of Others12. Convention Establishing the World Intellectual Property

Organization13. Berne Conventions for the Protection of Literary and Artistic

Works14. Convention for the Protection of Industrial Property 15. Paris Convention for the Protection of Industrial Property16. Hague Conventions on PRIL:

…personal status…patrimonial family status…patrimonial status such as agency and trusts

17. Convention on Recognition of Foreign Judgment on Civil and Commercial matters

18. Convention in Respect of Inter Country Adoption

C.TREATISES ,COMMENTARIES AND STUDIES OF LEARNED SOCIETIESEuropeanUlrich Huber, De Conflicto Legum Diversarum in Diversia ImpecisMareas (di ba Manresa?), Comentarios al Codigo Civil EspanolFK von Savigny, System des Beutigen Romishcen Rights, english translation by Guthrie



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Andrei Weiss, Traite Theorique et Pratique de Droit International Prive American and EnglishJH Beale, Conflict of LawsDF Cavers, The Choice of Law ProcessE. Cheatham, Cases and Materials on Conflict of LawsB. Currie, Selected Essays on the Conflict of LawsA. Ehrenzweig, A Treatise on the Conflict of LawsHF Goodrich, Conflict of LawsAK Kuhn, Commentarieson PRILA Gussbaum, Principles of PRILE Rabel, The Conflict of LawsJ Story, Commentaries on the Conflict of LawsF Wharton, Treatiese on the Conflict of LawsGC Chesire, Private International LawRH Graveson, Conflict of laws American InstituteRestatement of the Conflicts of LawsSecond Restatement

D.JUDICIAL DECISIONSGraveson: this branch of law is more completely judge-made than almost any other

PART TWO – JURISDICTION AND CHOICE OF LAW

IV. JURISDICTION

Judicial Jurisdiction: power or authority of a court to ...try a case…render judgment…and execute it in accordance with law

Legislative jurisdiction: ability of the state to …promulgate laws…enforce themOn all persons and property within its territory

A. BASIS OF EXERCISE OF JUDICIAL JURISDICTION

1. Jurisdiction Over the PersonGenerally

a. Voluntary appearanceb. Submission to authority

OVER THE PERSON OF THE PLAINTIFF-when plaintiff invokes the aid of the court by filling a suit OVER THE PERSON OF THE DEFENDANT1. Enters appearanceGR: appearance of defendant or lawyer - gives consent for the

forum's exercise of jurisdiction over himX: Special appearance for the purpose of protesting the

jurisdiction of the court 2. If non-resident who is initially the plaintiff: if counterclaim

filed against him, he is already deemed to be under the court's exercise of jurisdiction

3. Served with the legal process within the state: SERVICE

OF SUMMONS (RULE 14, ROC)Section 6: PERSONAL SERVICE-handing him a copy-tendering him a copy if he refuses

Section 7: Substituted Service-for justifiable causes, defendant cannot be served w/n

reasonable time personallya. Residence: with some person of SUITABLE AGE and DISCRETION THEN RESIDING THEREINb. OFFICE/ REGULAR PLACE OF BUSINESS: competent person in charge thereof Section 12: Service upon Foreign Private Juridical Entity

(FPJE)Defendant: foreign Private Juridical Entity-transacted business in RP How Service made:a. on RESIDENT AGENT designated in accordance with law for

that purposeb. if NO AGENT:

i. on government official designated by law to that effectIi. On any of its officers or agents within the Philippines

Section 15. Extraterritorial ServiceDefendant:a. Does not reside + not found in RPb. Action affects the personal status of plaintiff c. Relates to, or the subject of which is, property within the

Philippines in which the defendant has or claims a lien or interest, actual or contingent

d. Or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein

e. Or the property of the defendant has been attached within the Philippines

How served:-with leave of courta. Personal serviceb. By publication in a newspaper of general circulation in such

places and for such time as the court may order + copy of summons and order sent thru registered mail to last known address

c. In any other manner the court may deem sufficient

WILLIAN GEMPERLE V HELEN SCHENKER (1967)In the first case, the wife Helen Schenker, sued Gemperle in behalf of her husband Paul. Gemperle now sues Paul for malicious publication of allegations and summons was served on Helen. Court ruled in favor of Gemperle so Paul contests the jurisdiction of the court, with the defense that no jurisdiction was acquired over him as the defendant.

WON jurisdiction may be acquired by service of summons to the wife of the defendant?YES, under exceptional circumstances.

GR: service of summons on wife is not service of summons on the defendant husbandX: in this case, the wife is the attorney in fact of her husband, who had authority to sue and be sued

2. Jurisdiction over the Propertya. Seizure of property under a legal processb. Institution of legal proceedings wherein the court's power over the property is recognized and made effective

-situs could bind the world, not just the interest of specific persons-basis of exercise of jurisdiction: presence of the property within the territorial jurisdiction of the forume.g. forfeiture of tangible property, registration of land title



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Quasi In rem:-based on state's physical power over the property found within its territory BUT affects only interests of particular persons in that thinge.g. action to quiet title to property: the claimant's title to the property in question is superior to others

In Proceedings IN REM and QUASI IN REM: as long as there is adequate notice + opportunity to be heard, okay na! this can be done through publication

PENNOYER V NEFF (1878)Pennoyer obtained a judgment in Oregon against Neff (a Californian resident), with summons served by publication in an Oregon newspaper. Court ruled in favor of Pennoyer, ordered execution of judgment over Neff's land in Oregon. Neff contests jurisdiction of the court over his property (for the execution of judgment), arguing that no jurisdiction was obtained over him as the defendant.

WON court could execute judgment over Neff's property in Oregon? No. The judgment from which the order for execution was derived is void, as the court did not acquire jurisdiction over the person of the defendant.-If the judgment is previously void (no jurisdiction over the person of the non-resident defendant), it will not become valid by the subsequent discovery of the property of the nonresident defendant or by his subsequent acquisition of it - or else, judgment would occupy a doubtful position of being void or valid depending on the presence of property of the nonresident defendant in the forum's territory*presence within territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him

INTERNATIONAL SHOE CO. V WASHINGTON Int'l Shoe is a Company whose principal place of business is Missouri but does business in Washington (although maintains no office in Washington, hired 11-13 salesman under direct supervision and control of sales managers based in Missouri. These salesmen are only allowed to solicit sales, then would forward the orders for approval to Missouri). Washington wants to tax its business activities in the state, served summons to its Washington salesmen and mailed through registered mail to the Missouri office.

WON Washington can impose taxes on the activities of the company in the state?YES. The continuous and systematic operations of the corporation in Washington through its agents were considered to vest the state with jurisdiction over it + traditional notions of fair play and substantial justice.-presence symbolize those activities of the corporation's agents within the state which courts will deem to be sufficient to satisfy the demands of due process-service of process service to an agent vests the courts jurisdiction if the activities are continuous, systematic, also gives rise to the liabilities sued, even if no consent to be sued or no authorization to an agent to accept.

EAP notes*this approach of minimum contacts and fundamental fairness demands that there be forum-transaction contacts that will make it fundamentally fair to require the defendant to defend a suit in the forum regardless of his nonresident status

e.g. if a person sells only 2 pairs of shoes in a state, would he be sufficiently appraised of any suit against him in that state? No. so no expectation that he be hailed in court+ if mejo marami ang kita, may expectation dapat na you may be sued in that state

*did not look into what kind of suit was filed: even if in personam or in rem or even quasi in rem, not strict what kind of service was used as long as notions of fair play was observed

MULLANE V. CENTRAL HANOVER BANK AND TRUST CO., TRUSTEE, ET.AL ( 1950 ) The Central Hanover Bank, a trust company in NY, wanted to have a judicial settlement of its assets which is binding on all the beneficiaries in its books. However, publication was only made in NY, pursuant to NY law, when some of its beneficiaries does not live in NY.

WON the judgment of the NY Court binds non-resident beneficiaries of the common fund maintained by Central Hanover BankNO. The NY banking law violaes Due process so its void, thus, service in accordance with it is also void and non-binding. The bank had the names and addresses of its beneficiaries so they should have served summons to those affected by it through a more adequate means than that provided by the law

-STANDARD FOR ADEQUATE NOTICE: the means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. The reasonableness and constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected

SHAFFER V HEITNER (1977)Heitner sued the officers of Greyhound, a corporation incorporated in Delaware but whose officers (and their corresponding stock certificates elsewhere) for antiturst liabilities. Court served summons through publication and through certified mail to the officers' last known addresses. Court ruled in favor of Heitner, ordered that the certificate of stocks of the officers be sequestered.

WON there are sufficient contacts for the Delaware court to exercise jurisdiction over the officers of Greyhound and their certificate of stocksNOBeing mere officers is not sufficient minimum contact-Officer's holdings in Greyhound do not provide contacts with Delaware sufficient to support the jurisdiction of Delaware Courts because property is NOT THE SUBJECT MATTER OF LITIGATION (not action in rem)-the Officers-appellants, who are not required to acquire interest in Greyhound in order to hold their positions, did not by acquiring those interests, surrender their rights to be brought to judgment only in states with which they had "Minimum Contacts

EAP notesUS SC defined the outer reaches of permissible exercise of judicial jurisdiction when it held that MINIMUM CONTACTS AND FUNDAMENTAL FAIRNESS TEST SHOLD BE SATISFIED REGARDLESS OF WHETHER THE PROCEEDINGS ARE IN REM, QUASI IN REM OR IN PERSONAM. Note that Shaffer demands that minimum contacts exist among the forum, defendant AND THE COA. In INTERNATIONAL SHOE, all that was required was minimum contact between defendant and forum.

Long arm Statutes



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-specify the kind of contacts upon which jurisdiction will be asserted by a statee.g. Commission of tortuous acts w/n the state

Celebration of a contract therePresence of property owned by defendant

-if these or other minimum contacts exist, the court can exercise jurisdiction because it has a justified interest in providing the plaintiff with a forum, no fundamental unfairness results -if long-arm statute broad, as long as it doesn't conflict with Consti, courts now have discretion to define on a case-to-case basis

3. Jurisdiction Over the Subject Matter (competence)-conferred by law or consti-based on the nature of the controversy-it is necessary that said power to try be properly invoked…by filing a petition-cannot be conferred by consent of parties: decision is void if court exceeds its jurisdiction and power in rendering it

IDONAH PERKINS V ROXAS (1941)Eugene Perkins wanted the court to declare that the shares in BCMC was his, thus the dividends belong to him, and not to his wife Idonah. He impleaded Idonah and Engelhard, both nonresidents of the Philippines, and Idonah alleged in her answer that there was already a NY judgment declaring her to be the sole owner of the shares claimed by Eugene, thus, this judgment should be res judicata.

WON Court had jurisdiction over the subject matter of the case (with Idonah arguing that this is barred by Res Judicata)YES, the court has jurisdiction over the subject matter to determine if the NY Judgment is Res Judicata-JURISDICTION OVER SUBJECT MATTER: the nature of the cause of action

and of the relief sought, conferred by the sovereign authority which organizes the court, and is to be sought for in

general nature of its powers, or in authority specially conferred

*TEST OF JURISDICTION: WON the tribunal has the power to enter upon the inquiry, NOT Whether its conclusion in the course of it is right or wrong

B. WAYS OF DEALING WITH A CONFLICTS PROBLEM

1. Dismiss the Case

Doctrine of forum non conveniens-courts may decline to try the case on the ground that the controversy may be more suitably tried elsewhere-literal interpretation: forum is inconvenient

*Usual grounds when this was used by the court:>When plaintiff made the choice of the forum primarily to harass defendant by inflicting upon him unnecessary expense and hardship in pursuing the remedy>Where non-resident plaintiff chose the forum because he felt that the jury verdicts were larger than in other for a>When such would be burdensome on the court or taxpayers>When the parties are non-residents and there was a severe backlog of cases when it perceived that jury duty, when compulsory, should not be foisted on a community with no link with or interest in the litigation >when the court's local machinery was inadequate to effectuate a right, such as when it had no way of securing evidence and the attendance of willing witnesses

Summary: should consider both public and private interests

Private interests:*relative ease of access to source of proof*Availability of compulsory process for attendance of unwilling witnesses*cost of obtaining and attendance off willing witnesses*possibility of viewing the premises if appropriate*all other practical problems that make trial of a case easy, expeditious, and inexpensive

Public Interest*administrative difficulties encountered when courts are congested*jury duty: burden on community*appropriateness of having the trial in a court that is familiar with the applicable state law rather than getting another forum enmeshed in a complicated conflict-of-laws problem

WHEN CAN'T REFUSE TO EXERCISE JURISDICTION: *when the forum is the only state where jurisdiction over defendant can be obtained*when the forum provides procedural remedies not available in another state

EAP notes:When Forum non Conveniens*would cause injustice to the parties*if the suit was bought in a particular case only because it gives a larger verdict - but so what?

e.g. there's a study that if the state is mostly composed of Asians, the jury would give lower amount of damages. Why?

-Disparity in the GDP and standard of living of Asians and Westerners. Asians think its already a big amount of value but Westerners don't think so.

Asians are happier, and can live with, less things.…so this ground, on its own, is not a ground. But if there are other factors which would make it inconvenient for the forum to exercise jurisdiction, then dismiss case*harass the other party: choose forum most inconvenient to the other party*global forum shopping: files numerous cases before several forums - different (and maybe conflicting) decisions…that's why we have CNFS*forum shopping vs. forum non conveniens: forum shopping only one of the reasons why dismiss…

HEINE V NEW YORK INSURANCE COMPANY (1940)A NY INsurance Company who did business (issued insurance policies in Germany, established an office) in Germany was sued by German citizens in US Courts

WON US Courts are compelled to take cognizance of the dispute?NO.

Although US Courts could exercise jurisdiction over the dispute, it would be inconvenient for the defendant US Corporation to bring to US it corporate books and records all the way from Germany just to defend itself against German plaintiffs-Forum non conveniens:The court has discretion to exercise jurisdiction. The courts have repeatedly refused, in their discretion, to entertain jurisdiction in COA arising in a foreign jurisdiction, WHERE BOTH PARTIES ARE NONRESIDENTS OF THE FORUM:The courts of this country are established and maintained primarily to determine controversies between its own citizens and those having business there, and manifestly the court may protect itself against a flood of litigation over contracts made and to be performed in a foreign country…

IN RE: UNION CARBIDE (1986)Facts



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Because of the gas leak in Union Carbide's India plant, several Indian citizens were killed and injured. As a result, several suits were filed against Union Carbide in US - which were later dismissed because the Indian Government was granted by a newly enacted Indian law to have exclusie right to represent the victims in India or elsewhere (note: Indian government filed complaint in India against Union Carbide)

IssueWON dismissal based on forum non conveniens valid (the other two issues are not really related to the topic so just see the book)

HeldYES. The Indian Citizen-Plaintiffs have revoked their authorizations of American counsels to represent them and substituted the Indian Government. The Indian Government already filed with Indian court, and Indian courts provides reasonably adequate alternative forum.-though evidence in US: basic design programs,Most of the evidence in INDiA:*principal witnesses*documents bearing on the development and construction of the plant*detailed designs*implementation of plans*operation and regulation of the plant*safety precautions*facts w/ respect to the accident itself*deaths and injuries attributable to the accident

WING ON COMPANY V SYYAP (1967)FactsWing-on, an NY Company, entered into a contract with Syyap Co, an RP Company, for the shipping of clothing materials from NY to RP. Syyap failed to settle their obligations with Wing-on so Wing-on sued Syyap in RP. Syyap was arguing that the RP court should have refused exercising jurisdiction over the case based on Forum non conveniens

IssueWON the court should have declined jurisdiction based on forum non conveniens

HeldNO. Unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed-Consideration of inadequacy to enforce the judgment

2. Assume Jurisdiction

Forum law decrees application of internal lawCivil CodeArticle 16: makes real and personal proerty subject to the law of the country where they are situatedIntestate and testamentary succession: governed by lex nationale of the person whose succession is under considerationArticle 829: makes revocation done outside the Philippines valid according to the law of the place where the will was made or lex domicilliArticle 819: prohibits Filipinos from making joint wills even if valid in the country where they were executedForum law was not properly pleaded and proved

The proper foreign law was not properly pleaded and proved-no Judicial notice of foreign lawRelevant rules of evidence:» To prove written foreign law: follow requirements in Sec 24-25, Rule 132» May be subject of judicial admission

» Processual presumption - no proof nor admission, foreign law presumed to be the same as that in the Philippines

FLEUMER V HIX (1930)FactsFleumer, the administrator of Hix's estate, presented the latter's will(executed abroad) for probate before RP court. He alleges that the will was duly executed in accordance with W.Virginia laws, showing a copy of the applicable laws as found in the West Virginia Code and Certified by the Director of RP National Library. If the will would be probated in accordance with RP laws, it would not be allowed because it did not show that Hix acknowledged it in the presence of 2 competent witnesses and it was subscribed by Hix and his witnesses in the presence of one another

IssueWON the will should be probated in RP

HeldNo because the will was not shown to be executed in accordance with the law where the will was made, i.e. W. Virginia law-the court can't take judicial notice, foreign laws must be proved as facts

PHILIPPINE TRUST CO. V BOHANAN (1960)FactsBohanan, a Nevadan citizen, died with a will. PTC was named the executor of the will, offered the will for probate in RP. Will left only P6k to the wife and children, while giving almost everything to decedent's siblings and grandson.PTC presented Nevada law applicable before the court in 2 earlier hearings.

IssueWON the will was duly executed in accordance with Nevada Law, which was not duly proved in this stage of the proceeding

HeldYes because Philippine Trust Co. already produced Nevada laws twice before the courts below. As Nevada law does not impose compulsory heirs, project partition valid-SO HERE, court decided to take judicial notice of the Nevada law, as presented in the earlier stages of the case

Foreign law cannot be applied...when foreign law is(1) contrary to an important public policy of the forum(2) penal in nature(3) procedural in nature(4) purely fiscal/administrative in nature(5) (will) work undeniable injustice to the citizens of the forum(6) case involves real/personal property situated in theforum(7) application of foreign law might endanger vital interest of the state (forum)(8) contrary to good morals

V. CHOICE OF LAW

A.THE CORRELATION BETWEEN JURISDICTION AND CHOICE OF LAW

Exercise of Jurisdiction and Choice of Law decisions related in 3 important ways:

1. FACTORS that will justify the forum court’s exercise of jurisdiction may be the same factors that will determine whether the forum court will apply its internal law (factors that will determine jurisdiction may be the same factors that will determine choice of law)



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2. If the Forum applies its internal law (because it has a real interest in that case), then the outcome of the case will be foreordained by that forum where the suit was brought. –> The effect of this is that – the plaintiff Will bring his suit, in the state which has a real interest in applying its internal law.

3. And since in practice, the forum will most likely apply its own law rather than displace it in favor of a foreign law, the plaintiff will predictably bring his claim in the courts of the state, the internal law of which is favorable to him.rt

Jurisdiction and choice of law are 2 distinct concepts.- forum court may exercise jurisdiction but will not apply

its own law;- or will refuse to assume jurisdiction although its internal

law may be applied as proper law

B.APPROACHES TO CHOICE OF LAWAll choice of law problems seek to answer 2 important questions:

1. What legal system should control where the significant facts of the case occurred in 2 or more states?

2. To what extent should the chosen legal system regulate the situation?

- Several theories have already been propounded to identify the legal system that should control- Ideally, all choice of law theories must advance both notions of JUSTICE and PREDICTABILITY. - However, they do not always do so. The forum is then faced with the problem which if these 2 important values should be stressed.

Prof. Arthur Von Mehren and Donald Trautman classify these theories into two: Traditional Approach and Modern Approach

1. Traditional Approach - emphasize the principles of SIMPLICITY, CONVENIENCE and UNIFORMITY (asked in the exam)

2. Modern Approach – those which relate to reaching appropriate results in particular cases

1. Traditional Approach- Vested Rights Theory- Local Law Theory- Caver’s Principles of Reference

Vested Rights Theory* traditional learning is anchored on the principle that choice of law rules that are:

> simple in form > capable of easy administration> would promote predictability > and discourage forum shopping

- theory advanced by Prof. Joseph Beale; he incorporated the theory into the first Restatement of Conflict of Laws

- Under this theory, an act done in a foreign jurisdiction gives rise to the existence of a right if the laws of that state provides so. This right VESTS in the plaintiff and he carries it with him to be enforced in any forum he chooses to bring suit.

- Forum – refers to the law of the place of occurrence of the “last act” necessary to complete the cause of action.

- HENCE, if the laws of the state where the last act occurred create no legal right, there is nothing for the

forum to recognize and enforce, even if its own law creates such a right.

- Furthermore, the law of the state of the “last act” is considered the law applicable to all substantive issued of the case.

- DISADVANTAGE: values of simplicity and uniformity are advanced even at the expense of reaching a just result Gray vs Gray, Alabama Great Southern vs Carroll

GRAY V GRAY (1934)Gray, with her husband, was on their way home to New

Hampshire. They had an accident in Maine. Grey filed damages for personal injuries in New Hampshire against her husband, who was the one driving.

In Maine, spouses are barred from maintaining an action against each other. No such prohibition in New Hampshire.

Held:If there is a conflict bet. lex loci and lex fori, the former

governs in torts and in contracts wrt the legal effect and incidents of acts. Therefore, whatever would be a defense to this action had it been brought in Maine, would also be a defense in New Hampshire. It is desirable that the remedy be the same, wherever the action is brought.

Plaintiff argues that the inability to recover in Maine is merely because there is a prohibition of suit between H and W in Maine. Thus, recovery may be had by going to a jurisdiction where such suits are allowed, like in New Hampshire. No. The inability to file an action is not merely because there is a prohibition of suit, but that the acts complained of do not give rise to ANY cause of action. There has been no breach of legal duty.

ALABAMA GREAT SOUTHERN R.R. CO. V CARROLL (1892)Carroll is a resident of Alabama, a brakeman employed

by Alabama Great Southern RR. Alabama RR operated a railroad from Tennessee, through Alabama to Mississippi. The contract of employment was entered into in Alabama.

Carroll was injured in Mississippi, because of a negligent failure to spot a defective link between 2 freight cars.

Under Mississippi law – Carroll could NOT recover against Alabama RR because the negligence was caused by a fellow servant.

Under Alabama law – could recover; injury suffered in the course of employment

Carroll brought suit in Alabama.

WON Carroll may recover in Alabama. NO

Held:No cause of action both in Alabama and in Mississippi. There can be no recovery in one State for injuries to

a person sustained in another unless the infliction of the injuries is actionable under the law of the State in which they were received. The negligent infliction of an injury in a state under statutory circumstances creates a right of action in that state, which, being transitory, may be enforced in any other State or country, the comity of which admits of it.

The injury occurred in Mississippi. It was in that state therefore where the COA, if any, arose. And under the law of Mississippi, plaintiff had no cause of action. Hence, plaintiff has no rights, which the court of Alabama can enforce.

Another point being raised by the plaintiff is its right to recover under the Employer’s Liability Act (Alabama contract of employement). This is based upon the fact that at the time the plaintiff was injured, he was in the discharge of his duties which rested on him by the terms of his employment contract entered



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into in Alabama. NO. The fact that it was an Alabama contract and that the plaintiff and the corporation were residents of Alabama are of no importance here. The duties and liabilities incident to the relation between the plaintiff and the defendant which are involved in this case are not imposed by, nor do they spring from the contract. The only office of the contract here is the establishment of a relation between them of master and servant. The conduct of such persons toward each other, when its legality is brought in question, is to be adjudged by the rules of the one or the other States as in falls territorially within the one or the other.

In Gray vs Gray although the only relation of Maine to the spouses was solely that it was the place where the accident occurred, the court automatically applied the law of that place; rejected a choice of law based on reason, justice and expediency.

if this law was enacted by Maine to prevent domestic controversies in Maine, why should a New Hampshire wife not be allowed to sue her husband in New Hampshire? Shouldn’t problems of family relations be determined by the personal laws of the parties rather than the place of the wrong?

CRITICISMS ON VESTED RIGHTS THEORY- Its main weakness was its failure to resolve conflicts

cases with reference to considerations of policy and fairness.

- The strict and unyielding application of the law of the place of injury can become counterintuitive, if not altogether arbitrary. In Carroll for example, the Alabama court applied the law of Mississippi at the expense of arriving at a just result.

- Dr. Jovito Salonga identifies 5 major defects of the theory:1. When theorists of the vested rights theory state

that it is not the foreign law but the rights acquired under it, which are enforced by the courts of another country – there is at once involved a self-delusion of reasoning.

2. Not all rights acquired under foreign law are protected elsewhere, nor is their protection always desirable.

3. The protection of rights and other interests is not the only consideration to be taken into account.

4. The law protects not only vested rights constituted abroad but often foreign legal relationships, capacities or powers out of which, rights or the extinction of duties and charges or the invalidity of acts, may arise.

5. It is difficult or impracticable to apply the theory where the material aspects of a transaction or event touch two or more states equally.

most states have eschewed the rigidity inherent in the traditional approach. However, a number of courts still follow it in reaction to the perceived uncertainty of the policy-oriented policies.

Local Law Theory- by Prof. Walter Wheeler Cook- rejected deduction from general principles as a means

to ascertain positive law and instead proposed to unearth rules by looking at the cases and other concrete phenomena, including the behavior of judges.

- Cook observed that:1st: the power of a state to regulate within its territory has no limitation, except such as may be imposed by its own positive law

2nd: that in conflicts of laws problems, the court does not enforce a foreign right but a right created by its own law by treating a case as a purely domestic case that does not involve a foreign element. As a result, the law applied may not be exactly that which the foreign court would have enforced.

CRITICISM – it lends to the narrow-minded who may be inclined to depreciate the practical and equitable consideration that should control the adjudication of conflict cases in favor of an exaggerated local policy on the ground that they and the sovereign which they represent can do as they please

Caver’s Principles Of Preference- by Prof. David Cavers- choice of law should be determined by considerations

of justice and social expediency and should not be a result of the mechanical application of a rule or principle of selection

- When a court is faced with a question whether to reject the law of the forum and admit foreign law, it should:

1. scrutinize the event or transaction giving rise to the issue before it

2. compare carefully the proffered rule of law and the result which its application might work in the case at bar with the rule of the forum and its effect therein

3. appraise these results from the standpoint of justice between the litigants or of those broader considerations of social policy which conflicting laws may evoke

- only when this process of analysis is followed can we successfully set aside the stifling effects of ensuring certainty and uniformity above all other objectives

- Cavers contends that the choice of law decisions should be made with reference to principles of preference which are conceived to provide a fair accommodation of conflicting state policies and afford fair treatment to the parties who are caught up in the hazards between conflicting state policies

- CRITICISMS: shows a TERRITORIALIST BIAS; they look at the place where the significant events occurred or where the legal relationship is centered.

2. Modern ApproachesPlace Of Most Significant Relationship

- rejected the single connecting factor of the place where the last act occurred and adopted an approach which identified a plurality of factors that must be considered in the light of choice of law principles.

- Among these choice of law principles were:(a) the needs of the interstate and

international system (b) relevant policies of the concerned states(c) relevant policies of other interested

states and the relative interest of those in the determination of the particular issue

(d) the protection of justified expectations of the parties

(e) the basic policies underlying the particular field of law

(f) certainty, predictability and uniformity of result

(g) ease in the determination and the application of the law to be applied



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- To determine which was the state of the most significant relationship, the factual contacts of each case were considered in the light of these principles

- These contacts however differed in each area of substantive law. Example:

In TORTS the contacts to be taken into account are:

place where the injury occurred place where the negligent conduct

occurred domicile, residence or nationality of

the parties place where the relationship

between the parties are entered

In CONTRACT CASES the factual contacts include:

law chosen by the parties place of contracting place of negotiation of the contract place of performance domicile, residence, nationality,

place of incorporation and place of business of the parties

- in both tort and contract cases, the contacts are evaluated depending on their relative importance and relevance to the issue at hand

AUTEN V AUTEN(1954)The Autens married in England. The husband deserted his wife and 2 children and moved to NY. The wife later went to NY where they had a separation agreement where the wife promised not to bring any action relating to the separation. Husband Auten failed to give financial support so wife brought a suit for legal separation in England in the ground of adultery. Nothing happened with the case. So the wife brought an action in NY to enforce the separation agreement.Husband argued that th ewife’s institution of the English separation proceeding was in violation of the separation agreement, thus his obligations under it are extinguished. The lower court of NY found for the husband.

Whether NY law or British law should apply. ENGLISH LAW Held:ENGLISH LAW applies.All matters relating upon the execution, interpretations and validity of contracts are determined by the law of the place where the contract is made; while all matters connected with its performance are regulated by the law of the place where the contract is performed.What constitutes a breach of contract and what circumstances excuse a breach are considered matters of performance, governable by the law of the place of performance.Some treat this rule as conclusive, while others consider the INTENTION of the parties as controlling, while others have resorted to the “CENTER OF GRAVITY” or “GROUPING OF CONTACTS” THEORY. Under this theory the courts, instead of regarding as conclusive the parties’ intention or the place of making or place of performance, lay emphasis rather upon the law of the place which has the most significant contacts with the matter in dispute.Although this may afford less certainty and predictability, it gives to the place having the most interest in the problem paramount control over the legal issues arising out of a particular factual context, thus allowing the forum to apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation.

Examining the contacts with New York and England compels the conclusion that it must be English law that should be applied. It is where all the truly significant contact took place, while NY is just the place where the agreement was made. The H and W are both British subjects, married in England, had children there, and there lived as a family. The husband left for NY only under a temporary visa. The agreement determined and fixed the marital responsibilities of an English husband and father. There is no question that England has the greatest concern. Even though the agreement was executed in NY, it is sting England that has the greatest concern in defining and regulating the rights and duties existing under that agreement. HAAG V BARNES (1961)Norman Barnes, an Illinois lawyer, and Dorothy Haag, a NY legal secretary, had an illegitimate child. After she became pregnant, Haag went to California. Prior to the birth of her child, she went to Chicago and entered into a support agreement with Barnes. The agreement contained a choice of law clause in favor of Illinois which upheld such agreement. However, NY law gave no binding effect to agreements made by parents of an illegitimate child unless such is judicially approved. Haag returned to NY and filed this support action.

Whether NY law or Illinois law should apply. ILLINOIS LAW.

Held:Illinois law should apply. The parties stipulated in the agreement that Illinois law would apply, Even if the parties’ intention and the place of making the contract are not given decisive effect, they are given heavy weight in determining which jurisdiction has the most significant contact with the matter in dispute.Illinois contacts: agreement entered into in Illinois, child was born in Illinois, all contributions for support are made from Chicago; parties expressly intended for Illinois law to apply.Contrasted with these Illinois contacts, the NY contacts are of far less weight and significance: mother and child currently live in NY and part of the liaison took place in NY. It may not be gainsaid that the center of gravity of the agreement was Illinois. Applying the Illinois law, the support agreement thus bars the present action for support.

- Instead of the term “state of the most significant relationship,” although using the same methodology, the Auten case used the term “center of gravity,” “place which has the most significant contacts” and “grouping of contacts”

- Auten considered all relevant contacts instead of automatically applying the law of the place where the contract was made.

- CRITICISM: the approach is one which can be used to support virtually any result and is thus bound to hamper the sound development of the common law by saving the court the difficult but necessary effort of articulating those true motivations which are the very elements of growing rules

- As in the case of Haag, the court applied the law of Illinois which was the man’s home. – the question is, is this consistent in applying Auten or did the court manipulate the contacts to achieve a preconceived result?

- CRITICISM: failure to provide any standard to determine which of the contacts were significant and evaluate the relative importance of a group of contacts.

Interest Analysis- by Prof. Brainerd Currie



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- urged the resolution of choice of law problems by looking at the policy behind the laws of the involved states and the interest each state had in applying its own law

- under this approach, factual contacts alone did not determine the outcome of a case unless they reflected a state policy which would be advanced by application of the substantive state law.

- After the court analyzed the policies reflected by a state law, it had to determine whether both states had a real interest in having their law applied, hence there was a true conflict

- FALSE CONFLICT – only one state had an interest in having its law applied – thus, the forum only had to apply the substantive law of the interested state

- TRUE CONFLICT – both states have a real interest in having their law applied.

BABCOCK V JACKSONGeorgia Babcock and Mr. and Mrs. Jackson, all residents of NY, left for a weekend trip to Canada. Mr. Jackson lost control of the car and Babcock was badly injured. Upon their return to NY, Babcock filed a suit against Jackson. NY law does not have a guest statute but Canada law renders a driver/owner of a vehicle not liable for such injury.

WON the law of the place of the accident governs. NO.

Held:NY law applies.Comparison of the relative contacts and interests of NY and Ontario makes it clear that NY has greater and more direct interest. The present action involves injuries sustained by NY guests as a result of the negligence of a NY host. Ontario’s sole relationship with the occurrence is the mere fact that the accident occurred there. NY policy requires the tortfeasor to compensate his guest for injuries caused by his negligence; the legislature has repeatedly refused to enact a statute denying or limiting recovery.NY court has no reason nor warrant to depart from such policy just because the accident happened beyond its borders. Neither has Ontario any interest in denying remedy to a NY guest against his NY host. For the object of Ontario’s guest statute is to prevent fraudulent assertion of claims by passengers, in collusion with the drivers against insurance companies; asserted against Ontario defendants and their insurance carriers.Whether the NY defendants might be defrauded by the NY plaintiffs is scarcely a valid concern for Ontario.Also, it is NY where the parties reside, where the guest-host relationship arose and where the trip began and was to end. While Ontario was just the place of fortuitous occurrence of the accident. The liabilities of the parties stem from their guest-host relationship and not vary and shift as the automobile proceeds from place to place.

Dissent:The present case makes substantial changes in the law of torts. The expression of center of gravity and significant contacts were neither applied nor are they applicable in the realm of torts. Attempts to make the law of public policy of NY prevail over the laws and policies of other States where citizens of NY ar concerned are simply a form of extraterritoriality which can be turned against us wherever actions are brought in the courts of NY which involve citizens of other States.

- in Babcock, the court held that the application of NY law advanced the policy reflected in that law, while the failure to apply Ontario law did not impair the policy behind the law.

- CRITICISMS: conflicts cases are ordinarily

concerned only with private and not governmental interests.

Unworkable because it will require the court to decide each case in an ad hoc basis since the court is required in every case to ascertain the purpose of each of the potentially applicable local law rules in order to determine which of these rules apply.

Its emphasis on the policy reflected in the law gave rise to a number of difficulties because not all state legislatures published committee reports that explained the background and purpose of the law, leading each court to determine on its own the purpose of the law in question – may encourage courts to engage in armchair speculation of the policy behind another state’s law

Also, not all laws reflected policy or had a purpose other than to decide cases.

Comparative Impairment

- by Prof. William Baxter- calls for the subordination of the state objective which

would be least impaired.- The courts were asked to weigh conflicting interests

and apply the law of the state whose interest would be more impaired of its law were not followed

- CRITICISM: pressured courts to look behind an apparent conflict to the precise issue and the precise interest of each state

Functional Analysis- by Prof. Donald Trautman and Arthur Von Mehren- this approach looked into the general policies of the

state beyond those reflected in its substantive law and to policies and values relating to effective and harmonious intercourse between states.

- These policies include reciprocity, advancement of multipstate activity, protecting justifiable expectations, evenhandedness in dealing with similar cases and effectiveness

- The next step is for the court to consider the relative strength of the state policy which the author calls “policy weighing”

- Milliken vs Pratt: Prat was a resident of Massachusetts, where spouse cannot act as surety for one’s obligation. In Maine, Pratt’s spouse applied for credit from Milliken guaranteed by Pratt. When they defaulted, Milliken sued Pratt on the guaranty in Maine. Held: Daniel was liable – place of contracting was in Maine. During the time this decision was made, the restrictive policy on the right of married woman was on the wanw in Massachusetts and in other states. Thus, the rule in force at the time the contract was made was not based on a strongly held policy.

- Using the functional analysis, the court should consifer whther the law of the state reflects an emerging or regressing policy.

Choice Influencing Considerations



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- by Prof. Robert Leflar- espoused 5 major choice-influencing considerations

that would lead courts to the choice of law decision:1. Predictability of results;2. Maintenance of interstate and

international order;3. Simplification of the judicial

task;4. Application of the better rule

of law;5. Advancement of the forum’s

governmental interests- contrasted with interest analysis which apply a

particular rule of substantive law in order to implement a policy reflected therein

- according to Leflar, courts will prefer rules of law whether they are forum law or another state’s law as long as they make good socioeconomic sense for the time the court speaks and are sound in view of present day conditions

- Leflar’s “better rule” criterion has been the most controversial aspect of his approach.

- CRITICISM: in practice, the courts have almost always considered its own law as the better law.

VI. PROBLEM OF CHARACTERIZATION

A.CHARACTERIZATION AND THE SINGLE-ASPECT METHOD

- Choice of law theories have traditionally concentrated on one element of a situation on order to connect the case to a particular legal community this is called the SINGLE-ASPECT METHOD

- For example – an issue determined as contractual is immediately referred to the place of contracting; one that is tortuous is assigned to the place of tort

- The goal of this method is to foster SIMPLICTY, CONVENIENCE and UNIFORMITY OF RESULTS

- Traditional Approach single aspect method- Modern Approach multi-aspect method- Here, ALL important factors of the case, both territorial

and non-territorial are analyzed and the applicable law is arrived at by rationally elaborating and applying the policies and purposes underlying the particular legal rules that come in question as well as the needs of the interstate or international intercourse

- End is to reach a just resolution for the case at hand

- PHILIPPINES follow the SINGLE-ASPECT METHOD

- Found in Civil Code:o Art. 15. Laws relating to family rights and

duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Phil. even though living abroad

o 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 succession, 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 wherein said property may be found.

o Art. 17. Forms and solemnities of contracts, wills and other public instruments shall be governed by the laws of the country in which they are executed.

When the acts referred to are executed before the diplomatic or consular officials of the RP in a foreign country, the solemnities established by Philippine laws shall be observed in their execution.

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 determination s or conventions agreed upon in a foreign country.

- These Phil. rules specify the geographical location from where the governing law is found, consistent with the traditional approach

- Difficulty in following these territorially oriented rules inherent rigidity and unjust decisions that may resuklt from their application.

- TO AVOID THESE, courts have resorted to CHARACTERIZATION and RENVOI, which operate as “escape devices.”

CHARACTERIZATION a. the process by which a court at the beginning

of the choice of law process assigns a disputed question to an area in substantive law- such as torts, contracts, family law or property.

b. in conflicts of laws situations, characterization becomes a pervasive problem since at least 2 jurisdictions with divergent laws are involved.

c. There are 2 TYPES of characterization:i. Subject Matter Characterizationii. Substance Procedure Dichotomy

2. Subject Matter Characterization- is the classification by a court of a factual

situation into a legal category; impt. In single-aspect method because the LEGAL CATEGORY to which an issue is assigned, determines the governing law

GIBBS V GOV’T OF PI(1933)Allison Gibbs was the H of Eva Gibbs. They were citizens of California and were domiciled there. They acquired 3 parcels of land in Manila, which formed part of their conjugal property. Eva died and Allison was appointed administrator. Allison filed a petition in California alleging that under California, when a spouse dies, the conjugal property becomes absolutely owned by the surviving spouse. Court granted petition and adjudicated to Allison sole and absolute ownership of the land. Allison presented the decree to the Register of Deeds in Manila and demanded for the issuance of a TCT. Register of Deeds declined to accept the decree as binding and refused to register the transfer of title on the ground that the inheritance tax has not yet been paid.



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Allison filed a case in Manila. Court affirmed the decision of the Register of deeds. Hence this petition.

Issue:Whether the California Civil Code or the Phil. Administrative Code should apply.

Held:Philippine Law should apply.In real property, the law of the place where the property is located governs. The nature and extent of the title which vested in Mrs. Gibbs must be determined in accordance with the lex rei sitae. Under Phil. law, she was vested of a title equal to that of her husband; shall be deemed partnership property. Upon her death her share in the conjugal property does not become absolutely owned by the husband but is transmitted to her heirs by succession, which levies a tax on inheritance (the order of succession is to be governed by California law since personal law governs in succession).

Although the courts was silent on the matter of characterization, it was faced with the task of categorizing the issue in Gibbs as involving real property to be governed by the lex situs, OR one involving succession to be governed by the national law of the decedent. Characterization problems are considered a menace to the traditional choice of law theories which aim for uniformity and predictability of results. Ex. in issue of WON an adopted child is entitled to an intestate share in her parent’s estate. If the child was adopted in the Phil. by a former Fil. Citizen, then moves to the US and becomes a US citizen, by whose laws she will not be an heir, the court will have to decide whether is a question relating to adoption or to succession. If succession – law of the place where adoption took place governs; if succession – law of adopted governs. Another example is in when a person hires an agent in another country and the agent commits a negligent act. The liability of the principal will depend on the characterization of the case if contractual, law of the place where the contract was entered into governs; if tortuous, law of the place of tort.

3. Substance-Procedure Dichotomy- directs the court to the extent it will

apply foreign law- if the issue is SUBSTANTIVE – the

court may apply foreign law- if PROCEDURAL – law of the

forum; the rights and duties if parties arising from a legal situation shall not be substantially varied because of the forum in which an action is brought

o all inclusive reference to the foreign law is never made; a heavy burden would be thrown upon the courts of the forum and the orderly administration of justice will be hampered. A limitation upon the scope of the reference to the foreign law is thus necessary.

GRANT V MCAULIFFE (1953)

Grant et. al. were residents of California. Injured in Arizona when their car collided with the car of Pullen. Pullen, also from California, died. Grant brought action in California against Pullen’s estate to recover for their injuries. Under Arizona law, a tort action which has not been commenced before the death of the tortfeasor must be abated. Under California law, cause of action for torts survive the death of the tortfeasor.

WON the present proceeding are substantive or procedural for purposes of conflict of laws.

Held:Survival of causes of action of a procedural issue; California law governsSurvival of causes of action should be governed by the law of the forum. Survival is not an essential part of the COA itself but relates to the procedures available for the enforcement of the legal claim of damages. Grant’s COA survives Pullen’s death.

the reaction to Grant was on the whole, negative. characterized as having been based on an erroneous characterization that was greatly influenced by sympathy factors in the case. Another view: correct result but arrived at using dubious method. Accdg. to Currie the court availed of one of several escape devices – characterization; it characterized the problem differently and the different characterization produced the result that has been previously recognized as the sound one; the just and rational result being clear, the court availed itself of one of the several escape devices that are built into the system itself. far from an ideal way of dealing with the situation; it would be better if the court could state explicitly the considerations that led them in the first place to determine what the result should be and indicate clearly how these considerations will be appraised in other cases legal scholars however have not suggested any method whereby courts could select an appropriate law objectively and an attempt by the court to explain its decisions in terms of demands of justice or social policy would doubtlessly create more uncertainty and arouse more criticism than did the California SC’s employment of the traditional escape device so characterization

Procedural issues are governed by forum law so as not to unduly burden or complicate the task of the court with the study of uncommon peculiarities and refinements of another legal system. However, so closely are procedure and substance connected that in many cases, a refusal to accept the foreign rule as to a matter falling into a doubtful class will defeat the policy involved in following the foreign substantive law.

2 Issues that occasion the debate as regards their proper classification: Statute of Frauds and Statute of Limitations

Statute Of Frauds- considered as substantive if the words of the law relate to forbidding the creation of obligation- on the other hand, one that forbids the enforcement of the obligation is considered procedural

o Art. 1403 – contracts that do not comply with the Statues of Frauds are unenforceable by action unless the same or some note or memorandum thereof be in writing; evidence of the agreement cannot be received without the writing or secondary evidence of its contents.

- Marie vs Garrison: Garrison maintains that the NY Statute of Frauds is a rule

affecting the remedy upon a contract within its terms and deemed a rule of procedure. Marie claims that the NY law was constructed as a rule of substance going into the existence of a contract



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HELD: the NY Statute of Frauds was a rule of substance since it provides that the contract of sale of any interest in land shall be void unless it was in writing; as opposed to a law stating that “no action shall be brought” if the requirement was not complied with.

Statutes Of Limitations And Borrowing Statutes- by tradition, classified as

“procedural” because they barred only the legal remedy without impairing the substantive right involved. as a result, a suit could still be maintained in another jurisdiction that provides for a longer statute of limitations

- however, certain statutes of limitations have been classified as substantive for conflicts purposes - if they provide a shorter period for certain types of claims that fall within a wider classification covered by a general statute of limitations.

- In order to determine whether a foreign statute should be regarded as substantive or procedural SPECIFICITY TEST – US court held that a statute of limitations of a foreign country is treated as substantive when the limitation was directed to the newly created liability so specifically as to warrant saying that is qualified the right.

- Nonetheless, in order to eliminate forum-shopping, many states including the Phil. have passed borrowing statutes which bar the filing of a suit in the forum if it is already barred by the statute of limitations in the place where the cause of action arose

- However, in Cadalin, the court held that to enforce the borrowed statute would contravene public policy on protection of labor.

CADALIN V POEA ADMINISTRATOR (1994)Cadalin instituted a class suit with the POEA for money claims arising from their recruitment from Asia International Builders and emloyment by Brown and Root International (BRII). BRII is a foreign corporation with headquarters in Texas, while AIBC is a domestic corporation. Cadalin sought the payment of the unexpired portion of the employment contracts, which were terminated prematurely. In Bahrain were some of the complainants were deployed, their labor law provides the terms and conditions of employment to govern employees and workers in Bahrain.NIRC dismissed the claims. To POEA, the prescriptive period was 10 years, while NLRC provides for 3 year prescription period as provided in the Labor Code. Solocitor General said the prescriptive period is 1 year as prescribed by the Amiri decree.

Held:As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters such as service of process, joinder of actions, period and requisites for appeal, etc. are governed by the laws of the forum. This is true even if the action is based upon foreign substantive law.

However, a law on prescription of actions is sui generis in that it may be viewed either as procedural or substantive, depending on the characterization given such law. However, the characterization into a procedural or substantive law becomes irrelevant when the country of the forum has a “borrowing statute.” Such statute has the practical effect of treating the foreign statute of limitation as one of substance. It directs the state of the forum to apply the foreign statute of limitations. It provides that an action barred by the local laws of the place where in the forum even though the local statute has not run against it. Sec. 48 of our Code of Civil Procedure provides this. HOWEVER, Sec. 48 cannot be enforced in so far as it ordains application of the Amiri Decree. The courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy. To enforce the 1 yr. prescriptive period would contravene the public policy on protection to labor. The applicable provision is the Philippine law.

B.DEPACAGE- from the French word “depecer” meaning to dissect- term for the phenomenon where different aspects of a

case involving a foreign element may be governed by different systems of laws

- ex. by Prof. Mehren and Trautman – Man dies intestate, domiciled in State A and has movable property in State B.

State A refer to laws of the domicile to det. how his estate should be divided

State B gives the widow a definite share in the estate of the deceased

However, the determination of WON the woman who claims a share in the estate IS a wife is governed by Family law and not laws on succession

The issue of what law governs the movable property and the successional rights of the spouse are of primary importance since they embody the “substance of the claim”; however, the validity of the marriage affects the solution because it answers a preliminary or incidental question.

The presence of an incidental question is one instnce which calls for the employment of depecage

a single element of a case is made to relate it to one legal system; depecage allows the other relevant interests of the parties to be addressed

Effect permit courts to arrive at a functionally sound result w/o rejecting the methodology of traditional approach

HAUMSCHILD V CONTINENTAL CASUALTY (1959)Jacquelyn Haumschild and Le Roy Gleason were married in Wisconsin and were domiciled there. In 1958arriage was annulled. 1956, Haumschild was injured while driving a motor truck driven by Gleason in California. Haumschild filed an action against Gleason in California. Gleason moved to dismiss bec. under California law, spouses are immune from suit by the other and that Haumschild is estopped to assert the invalidity of their marriage.

WON the law of the domicile should apply. YESWhether the law of the place of wrong should be applied, in resolving an issue of interfamily immunity from suit in tort. NO

Held:The law of the domicile is the one that ought to be applied in determining any issue of incapacity to sue based upon family relationship.



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the court decided that the law of the place of accident, California, governed the issue of negligence, while Wisconsin law governed the issue of interspousal immunity. The characterization process was taken one step further by not limiting the classification to the case itself but likewise, to the issues arising from the case.

FACTORS to be considered in choosing applicable law: (set out by the 1969 Restatement 2d which adopted depecage)

a. the needs of the interstate and international system

b. relevant policies of the forumc. relevant policies of other interested states and

the relative interests of those states in the determination of a particular issue

d. protection of the justified expectation of the parties

e. basic policies underlying the particular field of law

f. certainty, predictability and uniformity of resultsg. ease in the determination and application of

the law to be applied

the consideration of any of these elements and the acceptance by the courts of depecage help ease the inherent restrictions of the single-aspect method courts are not compelled to apply the entirety of a state’s law to all aspects of the case, application of which might produce egregious results; cutting up the case by issue and applying pertinent laws allows the court to reach a decision that is fair and desirable. although application of depecage in case law both in the Phil. and US is still uncommon

D. Capacity to Enter Into Contracts- governed by the rules on status and capacity- countries that follow nationality law principle national

laws;- countries that follow domiciliary law theory law of

their domicile shall govern- In Insular Government vs Frank: disregarded the

nationality principle. Frank had the capacity to enter into a contract whether in the US or the Phil. since he was of majority age as determined by his national law. Hence, he could not plead infancy and question the validity of the contract.

this decision was an erroneous application of the lex loci celebretionis since what was in question was the capacity to contract. The court could have arrived at the same result had it applied lex nationalii, which was also the lex loci celebrationis.

E. Choice of Law Issues in Conflicts Contracts Cases- - under principle of freedom to contract, parties may

stipulate on the law that will govern their contract agreement

1. Choice of Forum Clause

Compagnie de Commerce vs Hamburg AmericaSteamship Sambia, registered in Germany and oened by Hamburg Amerika, proceeded to port of Saigon where it was taking a cargo belonging to the plaintiff Compagnie de Commerce, a corporation organized under the laws of France. There were rumors of impending war. Master of Samia received on order from owner Hamburg to proceed at once to Saigon, which is a neutral port. Plaintiff Compagnie De Commerce

objected and insisted that the steamship should load the whole cargo with the terms of the charter party. The master went to Saigon. The steamship then went to Manila and remained there. No attempt was made by the owners, master or agent of the steamship to complete the voyage or to conserve its perishable merchandise. The cargo was deteriorating so the master of the steamship secured a judicial authority to sell them and the balance of the cargo was dumped into the sea. The proceeds of the sale was deposited in the court. Plaintiff filed an action for breach of contract. Sought to recover in Saigon the full value of the cargo loaded. Defendant alleged that Phil. courts had no jurisdiction since the party had a clause directing settlement of disputes first to a Board of Arbitration in England.

WON Phil. court had jurisdiction.Held:YES. Objection to jurisdiction raised for the first time on appeal. Defendant not only appeared and sought w/o objecting to the court’s jurisdiction but even asked for affirmative relief by filing a counterclaim. A contractual stipulation for a general arbitration cannot be invoked to oust the court of its jurisdiction, as stated in numerous cases, and this doctrine should be applied in the case at bar, notwithstanding the fact that the contract was executed in England, in the absence of averment and proof that under the law of England compliance with or an offer to comply with such a stipulation constitutes a condition precedent to the institution of judicial proceeding for the enforcement of the contract.

King Mau vs SycipKing Mau, agent of Sycip, sold and shipped 1000 tons of coconut oil to Fassett who in turn assigned it to Fortrade Corp. Under the agency agreement in New York, King was made the exclusive agent of Sycip in the sale of Philippine coconut oil outside the Phil. to be paid 2 ½% of the total sale.King filed this action to collect P59k as his share as agent. Sycip however contends that the transaction for the sale of 1k tons of coconut oil emulsion was not covered by the agency contract. It was contended that as the contract was executed in NY, the court of CFI Manila had no jurisdiction.

WON court had jurisdiction.

Held:YES.A non-resident may sue a resident in the courts of the Phil. where the defendant may be summoned and his property leviable upon execution in case of a favorable judgment. It is a personal action for collection of sum of money which the CFI of Manila have jurisdiction to decide. There is no conflict of laws involved in the case because it is only a question of enforcing an obligation created by or arising from contract and unless the enforcement of the contract be against public policy of the forum, it must be enforced.

in this case, the court held that there is no conflict of laws involved disregards the concept of conflict of alws as encompassing all cases which have at least 1 foreign element. Since the contract was executed in NY and the goods were shipped in NY, then there are obviously foreign elements that characterize the case as a conflicts case. Following the INTEREST ANALYSIS approach, the policies reflected by the state’s laws will determine whether they have a real interest in the case. Since the Philippines has no interest in applying its own law, then the court could have found that the policy of the Phil. is not significantly involved in the circumstances of the case. The case presents a FALSE CONFLICT and the forum exercises jurisdiction over the case but applies the law of the interested state which is the lex loci celebrationis.



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HSBC vs ShermanEastern Book Supply Service, Singaporean company, was granted by HSBC an overdraft facility in the amount of $200k. As security, Sherman and Reloj, directors of the company, executed a joint and several guarantee. Company failed to pay its obligations. Thus, bank went after Sherman. Also failed to pay. So bank filed a case in RTC of QC. Sherman claims that Phil. court had no jurisdiction because of the stipulation in the guarantee that the courts of Singapore shall have jurisdiction over all disputes arising under the guarantee.

Held:RTC has jurisdiction. Parties did not stipulate that ONLY the courts of Singapore, TO THE EXCLUSION of all the rest, has jurisdiction. Neither did the clause operate to divest Phil. courts of jurisdiction.

Parties may stipulate on the venue of the suit in case of litigation concerning the contract. However, a case arising from the contract will be litigated only in the forum chosen, if the choice of forum clause specifically indentifies it as the ONLY venue; to the exclusion of the others. If parties agreed in writing that an action shall be brought only in another state and it is brought in this court, the court will dismiss or stay the action as appropriate, unless

- the court is required by statute to entertain the action- plaintiff cannot secure effective relief in the other

state- the other state would be a substantially less

convenient place for the trial than this state- the agreement as to the place of the action was obtained by misrepresentation, duress, abuse of economic power, or other unconscionable means.- it would for some other reason be unfair or

unreasonable to enforce the agreement

2. Contracts with Arbitration Clause- gives rise to the issue of whether one of the parties can

compel the other to submit to arbitration- in early American cases, the court declared the

arbitration clause indentifying the arbiter to decide all matters and declare such decisions as final and conclusive between the parties is contrary to the declared policy of the courts.

Puromines, Inc. vs CAPuromines entered into a contract with Philip Brothers for the sale of Urea. The contract provided an arbtration clause which stated that disputes arising therefrom shall be settled by arbitration in London. The Urea delivered by Philip Brothers in Manila were in bad order and condition, caked, lumpy and contaminated with rust and dirt. Puromines filed a complaint in RTC for breach of contract of carriage.

WON court has jurisdiction.

Held:NO. The parties are obligated to respect the arbitration provisions on the sales contract and/or the bill of lading. They cannot escape from this obligation under the arbitration clause stated therein. The rule now is that unless the agreement is such as absolutely to close the doors of the courts against the parties, which agreement would be void, the courts will look with favor upon such amicable arrangement and will only interfere with great reluctance to anticipate or nullify the action of the arbitrator.

Bremen vs ZapataZapata, a Houston corporation, contracted with Unterweser, a German corporation, for the towing of Zapata’s rig, Chaparral, from Louisiana to Italy. Their contract contained a forum-selection clause providing that any dispute must be treated before the London Court of Justice.While in the International waters, a severe storm arose and Chaparral was seriously damaged. Zapata instructed Unterweser’s tug to tow the damaged rig to Florida, the nearest port of refuge. Zapata commenced a suit in the USA for damages. Unterweser moved to dismiss for lack of jurisdiction. US District court held that the forum selection clause is unenforceable, reiterating the traditional view that agreements in advance of controversy whose object is to oust the jurisdiction of the courts are contrary to public policy and will not be enforced.

Held:In the light of the present-day commercial realities and expanding international trade, the forum clause should control absent a strong showing that it should be set aside. The correct approach would have been to enforce the forum clause unless Zapata could clearly show that enforcement would be unreasonable and unjust or that it was invalid for reasons such as fraud and overreaching. Case must be remanded for reconsideration. The court notes however that there is nothing in the record present that would support refusal to enforce the forum clause.The parties involved here are an American and a German. Reasonable to choose London, which was a neutral forum.

A contractual choice of forum clause would be held unenforceable if:- enforcement would contravene a strong public policy of

the forum in which the suit is brought whether declared by statute or by judicial decision

- if seriously inconvenient for the trial of the action; but if it can be shown that the parties have contemplated such inconvenience, then it is difficult to see why it should be held unenforceable.

1912, NY Arbitration Law was passed providing that arbitration contracts be valid, enforceable and irrevocable. Thus, in the US, contracts with arbitration clause are no longer considered offensive to the settled public policy. On the contrary, the modern tendency of the courts is to look with favor upon such agreements.

3. Adhesion Contracts

ADHESION CONTRACT a. one that is not negotiated by the parties,

having been drafted by the dominant party and usually embodied in a standardized form. It is called a contract of adhesion because the only participation of the other party is in affixing her signature or adhering thereto.

b. Also referred to as a “take it or leave it” contract

c. Ex. Insurance contracts, bills of lading, contracts of sale of land from real estate firms and airline tickets

PanAm World Airways vs RapadasJose Rapadas, while standing in line to board the flight from Guam to Manila, was ordered by a Pan Am control agent to check in his samsonite attaché case. He instead went to



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the end of the line to try to get through without having to check in his attaché case. He was again spotted, and for fear that he would miss the plane, he checked it in without declaring its contents or value. However, the attaché case never arrived in Manila. Pan Am offered to settle the claim for $160. Rapadas refused and filed this case claiming that its value was $42k.Pan Am acknowledged responsibility for the loss but asserted that the claim was subject to the “Notice of Baggage Liability Limitations forming part of the passenger’s ticket.”

Held:The Warsaw convention governs the availment of the liability limitations were the baggage check is combined with or incorporated in the passenger ticket which complies with the convention’s provision. In the case at bar, the baggage check is combined with the passenger ticket in one document of carriage. The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of luggage. If the passenger fails to adduce evidence to overcome the stipulations, he cannot avoid the application of liability limitations.

PAL vs CAGilda Mejia shipped through PAL one unit of microwave oven from San Francisco to Manila. Upon arrival of the unit, Mejia discovered that the front glass door was broken. Mejia made oral and written demands for reimbursement for the value of the oven, which PAL ignored. Mejia filed an action and demanded P30k reimbursement, and P10k for moral damages.PAL alleged that there was no valid cause of action since it acted in good faith and in compliance with the Warsaw Convention and exercised due diligence in the selection and supervision of its employees.

WON the limited liability provision on the airway bill should apply.

Held:NO. The front portion of the airway bull contains a simple warning that the shipment is subject to the conditions of the contract on the dorsal portion regarding the limited liability of the carrier unless a higher valuation is declared. The lower court declared correct the non-application of the limited liability under the airway bill. Furthermore, there was glaringly no attempt whatsoever on the part of PAL to explain the cause of the damage to the oven. This constitutes gross carelessness and negligence which itself justifies the award of damages.

Granting that the airway bill is a contract of adhesion, it has been ruled that such contracts are not entirely prohibited and are

in fact binding regardless of WON the respondent has read the provisions thereof. The strict interpretation of a contract of adhesion against the drafter is due to the peculiarity of the transaction wherein one party, normally a corporation, drafts all the provisions of the contract without any participation on the part of the other party other than the affixment of signature.

even though it partakes of the nature of a contract of adhesion and such must be construed strictly against the party whi drafted the same or gave any rise to any ambiguity therein, it should be borne in mind that a contract of adhesion may be struck down as void and unenforceable, for being subversive of public policy, only when the weaker party is imposed upon dealing with the dominant bargaining party and is reduced to the alternative of taking or leaving it, completely deprived of the opportunity to bargain on equal footing. This means that if a party to an adhesion contract is at the very least, on equal footing with the other party, and he is totally free to reject the same, his assent to the terms and conditions of the contract can not be considered as offensive to public policy. Sweet Lines vs Teves: it is hardly just and proper to expect the passengers to examine their tickets received from crowded counters for conditions that may be printed thereon, much less charge them with having consented to the conditions, so printed especially if there are a number of such conditions in fine print as in this case. Passengers of inter-island vessels do not have the same chance, since their alleged adhesion is presumed only from the fact that they purchased the passage tickets. It should also be stressed that shipping companies possess are virtual monopoly leaving passengers with no choice but to buy their tickets and avail if their vessels and facilities. Finally, passengers who board these inter-island vessels come from the low-income group and are less literate and who have little or no choice but to avail of petitioner’s vessels.

4. Special ContractsThere are special types of contracts with special characteristics which are governed by specific rules.

sales or barter of goods lex situs

loan granted by financial institutions law of the permanent place of business

loan granted by private individual or subject matter of loan is personal law of the place where the loan was obtained

pledge, chattel mortgage and antichresis lex situs

Carriage of Goods by SeaAmerican President Lines vs KlepperKlepper shipped on board President Cleveland in Japan a lift containing personal and household effects, under a bill of lading. When it arrived in aManila, while the lift van was being unloaded, it fell on the crane and the contents were spilled and scattered. Klepper filed for damages. CFI Manila ordered the shipping company to pay. American President Lines now contends that its liability cannot exceed $500 invoking in its favor the bill of lading and COGS.

Held:



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With regard to the contention that the CODS should also control the case, such is of no moment. Art. 1753 provides that the law of the country to which the goods are to be transported shall govern the liability of the common carrier in case of loss or destruction. This means that the laws of the Phil. should apply. Therefore, although COGS state that the carrier shall not be liable for more than $500 unless the value of the goods has been inserted, it is only SUPPLETORY to the provisions of the Civil Code.On the strength of this opinion, the court is constrained to rule that the liability of the carrier with regard to the damage of the goods should only be limited to $500.

Contracts of Air Transportation- comparatively a new subject in Conflict of Laws- in order to regulate and establish uniform rules and

regulations on the liability of international airline carriers in cases of death, injuries of passengers or loss or damage of cargo, the Warsaw Convention was concluded

- The Convention applies to all international transportation of persons, baggage or goods pweformed by aircraft for hire, enumerates instances when liable and fixes the maximum amount of damages to be included in each case; carrier and passenger may agree by special contract to a higher content of the liability for loss or damage.

- Most of the cases decided by the SC involving international air transportation were due to malice, bad faith, discriminatory acts or otherwise improper conduct of its employees. In said cases, the SC declined to apply the Warsaw Convention

Lopez vs PanAmSen. Lopez and his family failed to get 1st class seats and were made to board as tourist passengers, despite several confirmations. CFI awarded damages. Pan Am admitted breach of contract, but not the finding of bad faith.

Held:PanAm cancelled the plaintiff’s reservations by mistaje and thereafter, deliberately and intentionally withheld such fact from the plaintiff. The plaintiffs were mislead into purchasing first class tickets when in fact, there was none. In legal contemplation, such conduct already amounts to bad faith breash of a known duty through some motive of interest or ill will. At any rate, all the mistakes advanced by the defendant, there would at least be negligence so gross and reckless as to amount to malice or bad faith.

KLM Royal Dutch Airlines vs CA

Spouses Mendoza went on a world tour with their daughter and niece. KLM issued tickets for the whole trip. After sightseeing in American and European cities they obtained a confirmation from Aer Lingus through the help of KLM. On their way to Lourdes, upon checking in at the Barcelona airport, only the young wards were allowed to take the plane. The spouses were off-loaded by the manager in an inhumane manner. They filed an action for damages for breach of contract of carriage and for the humiliating treatment they received. KLM alleges that under Art. 30 of the Warsaw convention, in cases where there are various successive carriers, each carrier who accepts passengers shall be subject to the rules of the convention and that only the carrier who performed the transportation is liable in cases of accident or delay.

Held:

Art. 30 of the Warsaw convention not applicable. The article presupposes the occurrence of an accident or delay, neither of which took place at the Barcelona Airport. The argument that KLM should not be held accountable for the tortuous conduct of Aer Lingus is unacceptable. The condition was printed in letters so small that one would have to use a magnifying glass to read the words. As the airline which issued the tickets with the knowledge that the respondents would be flown on the various legs of their journey by different air carriers, the KLM is chargeable with the duty of specifically informing the respondents of the conditions prescribed in the tickets or to ascertain that the respondents read them before they accepted the passage tickets. No effort was exerted by KLM. Moreover, the passage tickets to be performed by successive carriers is to be regarded as a single operation rather than a series of independent contracts. The spouses dealt exclusively with KLM. The breach was even aggravated by the discourteous and highly arbitrary conduct of an official of the Aer Lingus.

Santos III vs Northwest Orient AirlinesSantos bought a roundtrip ticket from Northwest airlines in its office in San Francisco. (SF-Manila via Tokyo-SF). When he checked in at the counter in the SF airport, despite previous confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. Santos sued Northwest for damages in the Phil. Northwest moved to dismiss for lack of jurisdiction.

Held:Phil. court no jurisdiction.Under Art. 28 of the Warsaw convention, the places where the action must be filed are:

1. Domicile – which is the place of incorporation of the company; in this case, Minessota

2. Principal place of business – Minnesota3. Place of business where the contract is made – SF4. Place of destination – which is the ultimate destination;

thus SF

this is a matter of jurisdiction and not venue, which could not be waived by the defendant when it failed to interpose timely objection

F. Applicable law in the absence of an effective choice

Restatement 2nd Law Governing in Absence of effective choice.

In the absence of an effective choice of law by the parties, consideration will be gicen to the following factors in determining the state with which the contract has its most significant relationship.

1. Place of contracting2. Place of negotiating3. Place of performance4. Situs of the subject-matter of the contract5. Parties’ domicile, residence, nationality, place

of incorporation, place of business6. Place under whose local law the contract will

be most effective

- in choice of alw decisions in conflicts contracts cases, the Restatement 2nd directs the forum court to single out the state of the most significant relationship with the contract as a whole or with a specific issue arising therefrom.

- The court should therefore localize the contract by examining the factual contacts that it has with the concerned state relative to their cogency to the issue.

- In the absence of an effective choice of law, courts applying a policy centered approach will apply its own



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law when there are significant contacts with the transaction. Once these exist, the forum has a real interest in applying its own law and such would not be fundamentally unfair to the parties. The court should also consider the legitimate expectations of the parties.

G. Limitations to Choice of Law- generally, parties may not select a law to govern their

contract if said law selected has no connection at all with the transaction or the parties

- if the law selected should change, the law as changed will govern; except if the change is so revolutionary that it was never contemplated by the parties. In such case, the law originally intended shall govern

- Phil. laws cannot be rendered illusory by the parties agreeing on some other laws to govern their relationship. Counterbalancing the principle of autonomy of parties to contract is the equally general rile that provisions of applicable law, esp. those affected with public policy, are deemed written into the contract. Stated differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions heavily impressed with public interest.

- Another example: use of COGNIVIT CLAUSES or confession of judgment clause – held valid only if the parties were of equal bargaining power and the debtor agreed to it voluntarily and with cogs.

VII. PROBLEM OF RENVOI

A.DEFINITION

Renvoi is a procedure whereby a jural matter presented is referred by the conflict of laws rules of the forum to a foreign state, the conflict of laws rule of which, in turn refers the matter back to the law of the forum

B.VARIOUS WAYS OF DEALING WITH THE PROBLEM OF RENVOI

1.Reject the Renvoi

Conflict Rules of the forum court refer the case only to the INTERNAL LAW of another state.

Internal Law of the foreign state is applied by the forum court.

Has the same effect as Double Renvoi Attains harmony of decisions But this works only if the other state also adopts double

renvoi. Otherwise, there would be no end to the case (revolving

door, game of lawn tennis, circulus inextrabilis).

2. Accept the Renvoi Conflict Rules of the forum court refer the case to the

whole law of another state—to both the INTERNAL LAW and CONFLICT RULES of another state. This includes the choice-of-law rules applicable in multi-state cases.

Internal Law of the forum court or a third state is applied.

Has the same effect as applying Single Renvoi

AZNAR V GARCIA (1963)

FACTS: Edward Christensen a California citizen at the time of death disposed his all his properties by will ,Helen,his acknowledged natural child opposed the project partition as it deprives her of her legitime. ISSUE: WON Phil law should apply

HELD: Philippine Law should apply. A16 of the Philippine Civil Code provides that the national law of the decedent governs the validity of his testamentary dispositions, the national law of Edward is California Law which conflict of law rule refers back the case to the law of the decedent’s domicile which is the Philippines for this case. The Philippine court accepted the renvoi and applied its law.

3 . Desistance or Mutual DisclaimerThe same result as the acceptance of renvoi but the process used by the forum court is to desist applying the foreign law.Internal Law of the forum court or a third state is applied.

4. Foreign Court TheoryThe forum court would assume the same position the foreign court would take were it litigated in the foreign state.ANNESLEY, DAVIDSON V ANNESLEY (1926)

FACTS: Testatrix died in France, according to English law she was domiciled in France but not according to French law for not complying with the French civil code. She made. She made an English will where she gave all her property to her daughter, and stipulated that she did not want to abandon England as her domicile.ISSUE:WON she could ,by will, give all her property to her daughter(French law 1/3 disposable)HELD:No.She was a French Domicialiary.

According to French law, the law applicable in her case is the law of her nationality which is British law, which refers the question back to French law and the French rule is that the administration of the movable of a foreigner who according to the law of his country is domiciled in France and whose property must according to that law be applied in accordance with the law of the country in which he was domiciled, will apply French municipal law, even if the deceased has not complied with the French rule on acquisition of domicile.

British law provides that the fact of residence in France coupled with animus manendi showed her intention to abandon her English domicile even without the formalities of French law for acquiring domicile.

C.USEFULNESS OF RENVOI Avoid unjust results

UNIVERSITY OF CHICAGO V DATER (1936)FACTS:Mr. Price and Mr. Dater obtained a loan secured by mortgage, their wives were included as partied in the trust mortgage . When Mr. Price, the University sued Sps. Dater and Mrs Price, the court ruled there was no cause of action against Mrs.Price because under Michigan law a married woman cannot enter into obligations like this hence the trust mortgage was void.ISSUE:What is the applicable lawHELD:Michigan law is applicable. The case is governed by either Illinois or Michigan law. Assuming that by Michigan law of the forum Illinois law is applicable, then the case is governed by Michigan



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law because Illinois conflicts of law rule set forth in Burr v Beckler provides that Michigan law is applicable in such situations.

EAP NOTES:By accepting renvoi

, Michigan protected the interests of a Michigan wife since Illinois disclaimed any desire in applying its law.

Promoted uniformity of results inspite of discrepancies in the choice of law of the involved states.

Objections to Renvoi The universal application of the doctrine would place

the court in a perpetually enclosed circle from which it would never emerge and that it would never find a suitable body of substantive rules to apply to a particular case

Renvoi is workable only if one of the states rejects it Achieves harmony of decisions only if the states

concerned do not agree on applying it the same way on applying it the same way. DEAN GRISWOLD: this is based on a false premise because for as long as remission is to the state’s INTERNAL LAW alone there will be a stop to the endless chain of reference which in fact is an extremely rare apparition.

Courts may be un

Inapplicability of Renvoi in a False Conflict

FALSE CONFLICT

PFAU V TRENT ALUMINUM CO.FACTS: Steven Pfau (Connecticut domiciliary) and Bruce Trent (New Jersey domiciliary) both students of Parsons College in Iowa agreed to drive together to Columbia in a car owned by Trent Aluminum Company (New Jersey Corp). While still in Iowa, Bruce failed to negotiate a curve and collided with another car, Pfau was injured.

ISSUE:WON Iowa guest statute is applicable to Pfau’s Action

HELD:The case presents a false conflict. Connecticut and New Jersey substantive law are in accord in as much as Connecticut has repealed its guest statute; New Jersey Law allows guest passenger suits.While the choice of law rule of Connecticut adheres to lex loci delicti and Iowa which has a guest statute the court held that Iowa has no interest in this litigation. There is no reason for applying the choice of law rule of Connecticut because it will frustrate the very goals of governmental-interest analysis, Lex loci delicti’s goal is uniformity and simplicity and does not relate to a state’s interest in having its law applied to given issues in a tort case.

BELLIS V BELLIS (1968)FACTS:Bellis , a citizen and domiciliary of Texas ,in his will provided that his three illegitimate children in the Philippines were to receive 40K Pesos each and the remainder of his estate shall go to his legitimate children. Illegitimate children opposed the project partition because it impairs their legitime.

ISSUE:HELD:(On renvoi) there is no Renvoi in this case because the testator was both a citizen and domiciliary of Texas. There could have been renvoi it the conflicts of laws rules of Texas provided for lex rei sitae but the applicable conflicts rules of Texas has not been pleaded and proven, hence, still no renvoi.

VIII. NOTICE AND PROOF OF FOREIGN LAW

A. EXTENT OF JUDICIAL NOTICE In the Phils,the judge is cannot take judicial notice

of a foreign law thus, the party whose cause of action or defense depended upon the foreign law has the burden of proving the foreign law.

Delgado v Republic “judicial notice may be taken of a foreign law with which the court is evidently familiar”

In US, the full faith and credit clause allows courts to take judicial knowledge of the law of sister states.

B. PROOF OF FOREIGN LAW

Official publication of the law; or A copy of the law attested by the officer having

custody of the record, or by his deputy. If such record is not kept in the Philippines, it must be accompanied with a certificate that such officer has the custody.

PCIB V ESCOLIN (1974)FACTS:This case between the administrators of Mr. and Mrs. Hodges regarding the amount of the estate of Mrs. Hodges (who died first) in relation to the conjugal partnership and the legitime of Mr. Hodges in the estate of his wife who was a Texas citizen.ISSUE:HELD:Case was remanded for parties to prove pertinent Texas law. The question of what is the applicable law of Texas is one of fact and not of law. Foreign law cannot be taken judicial notice of and must be proven like any other fact.

IN RE: ESTATE OF JOHNSON (1918)FACTS: Emil Johnson, US citizen died in Manila leaving a holographic will which was signed by two instead of three witnesses required by sec 618 of the code of Civil Procedure. The will was admitted to probate pursuant to Sec 636 of the Code of Civil Procedure on the ground that the will was in accord with the law of the state of Illinois of which Johnson was at the time his death a citizen of

HELD:Trial judge should not have taken judicial notice of Illinois law.

Effects of Failure to Plead and Prove Foreign Law

The forum court has three alternatives1. Dismiss the case for inability to establish a cause of

action

Traditional approach

burden of introducing proof of the contents of the foreign law rests upon the party relying on the foreign law



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forum court upon proof would enforce a right existing under that foreign law

failure to prove its content is failure to establish a prima facie case

WALTON V ARABIAN AMERICAN OIL (1956)

FACTS:Walton (Arkansas citizen) is suing Arabian American Oil a Delaware Corporation for tort which occurred in Saudi Arabia. Both Plaintiff and Defendant did not plead Saudi Arabian law nor at the trial offer to prove it. New York law is that the substantive law applicable to tort is the law of the place where the alleged tort occurredThe court ruled in favor of the DefendantISSUE:

HELD:Foreign law is a fact that must be proved, and the burden rests on the plaintiff who relies on the foreign law for his cause of action, hence the failure to plead and prove

2. To apply the law of the forum

The basic law is the law of the forum and when foreign law is not proved then there is no reason to displace the basic law

LEARY V GLEDHILL (1951)

FACTS:In this case Leary seeks to recover from Gledhill money he loaned to the latter in France. Gledhill moved to dismiss on ground that there was no promise to pay, no demand for repayment and that Leary failed to plead and prove law of France where the transaction occurred.ISSUE:WON Leary cannot recover for failure to plead and prove French lawHELD:Leary can recover. Three presumptions may be indulged in

1. That the law of France is the same as the law of the forum

2. That the law of France like all civilized countries recognize certain fundamental principles such as that the taking of a loan creates an obligation to pay

3. By failing to prove French law, parties acquiesce to apply forum law

The court used the third presumption because it does not present any such difficulties for it may be universally applied regardless of the controversy.

ZALAMEA V CA (1993)

FACTS:Zalamea’s are suing Transworld Airlines, Inc. for moral damages because they were bumped off their flight due to overbooking. RTC ruled in their favor, CA reversed and held that moral damages are recoverable only where there is fraud or bad faith and since it is a matter of record that overbooking of flights is n accepted practice of US airlines, no fraud or bad faith could be imputed to TransWorld Airlines. ISSUE:

HELD:Foreign laws do not prove themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged and proven. Written law may be evidenced by an official publication thereof or by a copy attested by the officers having legal custody of the record, or by his deputy, and accompanied with a certificate that such officer has custody. The certificate may be made by a secretary of an 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.

3. To assume that the foreign law is the same as the law of the forum

Processual presumption or presumed-identity approach

MICIANO V BRIMO (1924)

FACTS:The brother of Turkish testator opposed the scheme of partition of the estate of the deceased which is not in accord with Turkish law (national law of testator) hence void for violating the civil code which provides that legal and testamentary succession …shall be regulated by the national law of the person whose succession is in question. However, he failed to prove Turkish lawISSUE:HELD: In the absence of evidence on such laws, they are presumed to be the same as those of the Philippines.The court applied processual presumption but held in the same breadth that the testator’s express wish that Philippine law be applied was void for being contrary to law.

EAP Notes:The most significant relationship theory or disingenuous characterization would have led to the same conclusion

SUNTAY V SUNTAY (1952)

FACTS:Jose Suntay (Filipino) died in Amoy, China, his child from his second marriage seeks the probate of his will which he alleges to have been filed, probated and allowed in the Amoy district court, the court disallowed.ISSUE:

HELD:In the absence of proof that the municipal district court of Amoy is a probate court and on the Chinese law of procedure in probate matters, it may be presumed that the proceedings in the matter of probating or allowing a will in the Chinese courts are the same as thoseprovided for in our laws on the subject.

CIR V FISHER (1961)

FACTS:Mr. Stevenson died leaving a will instituting his wife as his sole heiress.Collector is assessing inheritance tax on the whole of the estate, because under British law all the properties were owned by the husband thus passes to the wife thru inheritance. ISSUE:WON British law is applicableHELD:



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No. British law cannot be applied in the absence of proof of what British law is. In the absence of proof, foreign laws are presumed to be the same as those of the Philippines. Processual presumption

BOARD OF COMMISSIONERS V DELA ROSA (1991)

FACTS:Board is seeking to deport Gatchalian, who the board is claiming to be an alien since the marriage of his Filipino grandfather and Chinese Grandmother were not proven, hence his father is Chinese and since his mother is Chinese he is Chinese . To be valid in the Phils it must proven that the marriage was valid in China.ISSUE:HELD:In the absence of evidence, foreign law is presumed to be the same as Philippine law. The Philippines adhere to the presumption of validity of marriage and he who claims the invalidity of marriage has the burden of proving the same.

EAP Notes:Factors to consider when deciding whether to apply domestic law or decide the case against the party who has the burden of proving the contents of the foreign law.

1. Degree of public interest involved2. Accessibility of foreign law materials to the parties3. Possibility that plaintiff is merely forum shopping4. Similarities between forum law and foreign law on the

issue involved

This will not likely result in the application of forum law except in cases involving marriage and family relations

C. EXCEPTIONS TO THE APPLICATION OF FOREIGN LAW

1. Contrary to an Important Public Policy of the Forum

PAKISTAN INT’L AIRLINES V OPLE (1990)FACTS:Pakistan International Airlines executed in Manila 2 separate contracts of employment which provided that PIA reserves the right to terminate the agreement at anytime by giving the EE notice in writing 1 month before the intended date of termination and that the governing law shall be the laws of Pakistan and venue for actions is Karachi courts. PIA terminated the employment of the 2 Filipinas who filed complaint for illegal dismissal.ISSUE:WON Pakistani law is the governing lawHELD:

1. Public Policy: No. This contractual provision cannot be invoked to prevent the application of Philippine labor laws and regulations to the subject matter of this case.EE-ER relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties by agreeing upon some other law to govern their relationship.

2. Substantive Contacts/Most significant relationship. Karachi courts cannot be the sole venue for the settlement of disputes. Contract executed and performed in the Philippines, Petitioner is a corp. doing business in the Phils and private respondents are citizens.

3. PIA did not prove Pakistani law, thus it is presumed to be the same as Philippine law

EAP Notes:

2. When Procedural in Nature

3. Issues are related to Property (Lex Situs)

4. Issue Involved in the Enforcement of Foreign Claim is Fiscal or Administrative

5. Contrary to Good Morals (Contra Bonos Mores)

6. Undeniable Injustice to Citizens of the Forum

7. When Penal in Character

8. Endanger Vital Interests of the State

PART THREE – PERSONAL LAW

IX. NATIONALITY

A. IMPORTANCE OF A PERSONAL LAW

Personal law serves as a permanent connection between the individual and the state. Personal law allows courts to exercise jurisdiction or determine the governing choice-of-law rule on a specific situation or transaction.

Personal law follows the person wherever he goes and governs transactions which affect him the most such as marriage, divorce, legitimacy and capacity to contract.

Merits of Nationality as Personal Lawo The laws of each state were presumed to be

made for an ascertained population.o Lawmakers consider the physical and moral

qualities of the citizens so, logically, laws should apply to these citizens wherever they are.

o Individual’s nationality is easily verifiable from documents.

Demerits of Nationality as Personal Lawo Does not solve problems relating to stateless

people and those with multiple nationalities.o No solutions offered to states with diverse

legal systems such as the US since there is no single national law.

o A person’s ties to his nation may be attenuated if he has lived in another country for most his life.

Importance of Nationalityo Nationality or citizenship regulates his:

Civil status Capacity Condition Family rights and duties Laws on succession Capacity to succeed

o Nationality principle expressed in Art. 15 of the NCC which makes laws relating to family rights and duties, status, condition and



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capacity of persons binding upon Filipino citizens wherever they may be.

B. DETERMINATION OF NATIONALITY

Hague Convention on Conflict of National Laws: It is for each state to determine who are its nationals. This law shall be recognized by other States insofar as it is consistent with international convention, international customs and the principles of law generally recognized with regard to nationality.

Article 4 of the Constitution enumerates who are Filipino citizens:

o Citizens of the Philippines at the time of adoption of Constitution

o Fathers or mothers are citizens of the Philippines

o Born before January 17, 1973 of Filipino mothers who elect Filipino citizenship upon reaching the age of majority

o Naturalized according to law

1. Natural-born Citizens Citizens of the Philippines without having to perform

any act to acquire citizenship

Either apply jus sanguinis (rule of descent or blood) or jus soli (law of place of one’s birth). Jus soli is followed in many countries.

Philippine Constitution applies the jus sanguinis principle.

Co vs. Electoral Tribunal: Ong did not have to formally elect citizenship because he was a natural-born citizen, his mother being Filipino and his mother was naturalized when Ong was still a minor.

Aznar vs. COMELEC: SC ruled that private respondent was a the son of a Filipino father, the burden was incumbent upon petitioner to prove that the former had lost his Philippine citizenship.

TALAROC V UY (1952)

SummaryUy defeated Talaroc and was elected mayor. Talaroc filed a petition for quo warranto because Uy was Chinese and therefore ineligible. The petition was granted. Uy argues his father was a Spanish subject and his mother was Filipino. After his mother was widowed, she reacquired her Filipino citizenship and is Filipino by the mere fact of his birth.

IssueWON Uy is Filipino

HeldYESOng followed his mother’s Filipino citizenship who reacquired her Filipino citizenship after the death of her husband. According to the Roa case, a Filipino woman reverts to her Filipino citizenship upon her husband’s demise and thereafter her minor children’s nationality automatically followed that of their mother because she was their natural guardian, provided that they may elect for themselves their nationality upon reaching the age of majority.

This rule was not changed by the adoption of the jus sanguinis doctrine.

CO V ELECTORAL TRIBUNAL OF THE HR (1991)

SummaryOng Te was the grandfather of private respondent Jose Ong Jr. Ong Te was from China and settled in Samar with his son Jose, Sr. who was born in China. Jose Sr. eventually married a Filipina. Jose Sr. was naturalized when Jose Jr. was 9 years old. Jose Jr. married a Filipina and was registered as a voter in Samar. He ran for Congressman and won. Losing candidates file election protests on the ground that Ong, Jr. was not a natural-born citizen of the Philippines.

IssueWON Ong was a natural-born citizen

HeldYESOng could not have asked for citizenship upon reaching the age of majority because he was born with it. His mother was natural-born but his father was naturalized. There is nothing to indicate that Ong did not embrace his Philippine heritage. The filing of a sworm statement is a requirement for those who need to elect citizenship. For those already Filipinos when the time to elect came up, there are act of deliberate choice which cannot be less binding. Participation in election exercises constitutes a positive act of election of Filipino citizenship.

DissentOng was Chinese at birth because his father was Chinese.

2. Citizens by Naturalization

Naturalization is by judicial method. It confers to an alien nationality after birth by any of the means provided by law.

During the martial law period, the naturalization procedure was liberalized. The filing of Declaration of Intent and income tax requirements were removed. The applicants needed to show that they were able to speak and write Filipino, English or Spanish and any of the principal Filipino languages. This procedure is no longer in force.

Qualifications for applicants for naturalization:

a. At least 21 years of age on the date of hearing of the petition

b. Resided in the Philippines for a continuous period of not less than 10 years

Period may be reduced to 5 years in any of the following cases:

Applicant has honorably held office under the Government of the Philippines or under any of the provinces cities, municipalities or political subdivisions;

Applicant has established a new industry or introduced a useful invention in the Philippines;



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Married to a Filipino woman

Engaged as a teacher in a public or recognized private school not established for the exclusive instruction of children of persons of a particular nationality or race in any of the branches of the education or industry for a period of two years;

Born in the Philippines

c. Of good moral character and believes in the principles underlying the Philippine Constitution and must have conducted himself in a proper and irreproachable manner during the entire period of his residence in the Philippines in his relations with the constituted government as well as with the community in which he is living;

d. Must own real estate in the Philippines worth not less than P5,000 or must have some lucrative trade, profession or lawful occupation

e. Must be able to speak and write English or Spanish and any of the principal languages.

f. Must have enrolled his minor children of school age in any of the public schools or private schools recognized by the Bureau of Private Schools where Philippine history, government and civics are taught or prescribed as part of the school curriculum during the entire period of his residence required of him prior to the hearing for naturalization.

Minimum 10-year residence requirement: is to enable the government to observe the applicant’s conduct and to ensure that he has imbibed the principles and spirit of Constitution.

Good moral character requirement: Means that the applicant must have conducted himself in an irreproachable manner.

o This, according to the SC, imposes a higher standard of morality than the term “good moral coduct.”

o Being a law abiding citizen was inadequate to prove irreproachable conduct.

o Evidence of irreproachable conduct has to be proved by competent evidence such as testimony of two character witnesses who must be well-known in the community and enjoy a high reputation for probity and that their word may be taken on face value.

o Employees or persons in the petitioner’s service or of the business enterprise he

operates are not competent to be attesting witnesses.

Lucrative trade, profession or lawful occupation requirement: means substantial gainful employment or the obtaining of tangible receipts.

o Appreciable margin of income over expenses in order to provide for adequate support for himself and his family in the event of sickness, unemployment or disability to work

Ownership of land requirement: At odds with Art. 12, Sec. 7 of the Constitution which reads: “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals qualified to acquire or hold lands of the public domain.”

o Exception to prohibition on ownership of real property:

Testamentary succession: Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals qualified to acquire or hold lands of the public domain.

Sec. 2, BP 185 which allowed a natural-born citizen who had lost his Filipino citizenship to be a transferee of a private land for residential purposes as long as it did not exceed 1,000 sq. m. of urban land or 1 ha. of rural land.

By applying the doctrine of in pari delicto wherein the alien vendee later becomes a naturalized Filipino and is excluded from the constitutional ban

Language requirement: Even if the applicant can understand but cannot speak and write the requisite languages, he is not qualified to be naturalized.

Enrollment requirement: Children must learn and imbibe customs, traditions and ideals of Filipinos so that they will become law abiding citizens.

YU KIAN CHIE V REPUBLIC (1965)

SummaryYu petitioned for naturalization. Sol Gen opposed on the ground of failure to prove lucrative source of income.

IssueWON Yu has a lucrative source of income

HeldNOHe was only receiving P150 as a fixed amount each month. The rest was in the form of allowances and bonuses which may or may not be given to him. Such additional amount was purely contingent, accidental or incidental which does not come up to the category of a lucrative income.

Disqualifications for naturalization

o The state has the burden to prove the disqualification of an applicant for Philippine citizenship.



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o In several SC decisions, however, it has been held that the petitioner must prove that he has none of the disqualifications.

o But because naturalization is a privilege and not a right, the law must be strictly construed against the applicant.

o Possible grounds for disqualification: Crime involving moral turpitude If applicant does not deal with and

receive Filipinos in his home and visit Filipino homes in a spirit of friendship, friendliness and equality without discrimination

If his nation does not grant reciprocal rights to Filipino citizens at time of hearing his application

C. PROCEDURE FOR NATURALIZATION

Steps for Naturalizationo Declaration of intention to become a citizeno Petition for naturalizationo Publication in the Official Gazette or

newspaper of general publication then hearing

o Rehearing after two years after promulgation of judgment awarding naturalization

o Taking of oath of allegiance

Declaration of Intention File within 1 year prior to petition for admission to

Philippine citizenship

File with the OSG a declaration under oath that it is his bona fide intention to become a citizen of the Philippines

Exemptions for filing a Declaration of Intention:o Persons born in the Philippines and who

have received their primary and secondary education in public schools or private schools recognized by the government and not limited to race or nationality

o Those who have resided continuously in the Philippines for a period of 30 years or more before filing their application

o The widow and minor children of an alien who declared his intention to become a citizen of the Philippines and dies before he is actually naturalized

Requirement to file a declaration of intention is mandatory and an absolute prerequisite to naturalization

If the applicant is exempt from filing a declaration of intention, his petition should contain a statement as to his exemption and the corresponding reasons for such exemption

o In order to apprise the public, especially the officers charged with notice of the application,

so that they may be prepared to contest or object to any evidence adduced in that regard

o Failure to do so constitutes a fatal defect in petition and renders it void for noncompliance with law

Effect of Naturalization on Wife and Children

Any woman who is married to a citizen of the Philippines and who might herself be lawfully naturalized shall be deemed a citizen

Minor children of persons naturalized who have been born in the Philippines shall be considered citizens

Foreign-born minor child in the Philippines at the time of naturalization of parent is automatically a Filipino citizen

Foreign-born minor child not in the Philippines at time of naturalization of parent shall be deemed a Filipino citizen only during his minority unless:

o Begins to reside permanently in the Philippines when still a minor in which case he will be considered a Filipino citizen even after becoming of age.

Foreign-born child after naturalization of his parent shall be considered a Filipino citizen

o Unless within one year after reaching the age of majority, he fails to register himself as a Philippine citizen at the American Consulate of the country where he resides and takes the necessary oath of allegiance

VIVO V CLORIBEL (1968)

SummaryChua and her 2 minor sons arrived from HK. Chua’s husband Uy had applied for naturalization which was granted. Chua and her children filed a petition for indefinite extension to stay while waiting for Uy to take his oath. This was granted by the DFA but denied by the Bureau of Immigration. They were advised to leave but they countered with a petition for mandamus. The BOI argues that even if Uy was naturalized, Chua was not automatically lawfully naturalized.

IssueWON Chua automatically became a naturalized Filipino

HeldNOChua must first prove that she possesses all the qualifications and none of the disqualifications for naturalization. On the contrary, Chua demonstrated her incapacity to satisfy the qualification that she must be of good moral character. She misrepresented before the consular representatives that she came to the country for a temporary visit when she in fact intended to stay permanently. She stayed beyond the time legally allowed and she also delayed court processes by applying for mandamus.

MOY YA LIM YAO V COMM OF IMMIGRATION (1971)

SummaryLau arrived in the Philippines in 1961 and was allowed to stay until February 1962. In January 1962, she married Lim Yao who was allegedly Filipino. The period for her lawful stay expired and



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she filed an action for injunction in order to restrain the BOI from ordering her to leave. The CFI denied her petition, ruling that mere marriage does not sufficiently grant her Filipino citizenship and she must first prove she possesses the qualifications and none of the disqualifications.

IssueWON Lau is a Filipino citizen

HeldYES, provided that she is not disqualified to be a citizen of the Philippines.The law is of American origin but Philippine courts showed no intent to break away from that tradition. The Courts have previously wavered in the cases of Lee Suan Ay and Lo San Tuang that there must be proof that the spouse possesses the qualifications of a an applicant but in this case, the SC overturned such previous decisions and held that an alien woman married to an alien subsequently naturalized follows the citizenship of her husband provided that she does not suffer from any of the disqualifications outlined.

Moy Ya Lim reversed Burca vs. Republic which held that citizenship should not be handed out blindly to any alien woman on account of her marriage to a Filipino.

Burca appealed to the SC but the Court ruled that notwithstanding the Moy Ya Lim doctrine, Burca still had to take steps necessary for the cancellation of her alien certificate of regulation to secure her status as citizen.

No Judicial Declaration of Philippine Citizenship

Declaration of Philippine citizenship may not be granted in an action of declaratory relief.

Summary procedure under Art. 412 of the CC for correction of error in entry in Civil Registry which might also change the citizenship or status of an individual was also disallowed. This rule has, however, been relaxed in later SC decisions.

Tau Yu Chin vs. Republic: There can be no judicial proceeding or action for the declaration of the citizenship of an individual. Courts of justice exist for the settlement of justiciable contrversies which imply a given right, an act or omission violative of the right and a remedy granted or sanctioned by law for said breach of right.

D. LOSS OF PHILIPPINE CITIZENSHIP

1. Naturalization in Foreign Countries

FRIVALDO V COMELEC (1989)

SummaryFrivaldo proclaimed governor-elect of Sorsogon. An action annulment was filed against him on the ground that he was not a Filipino citizen having been naturalized in the US in 1983. Frivaldo admitted that he had indeed been naturalized but argued that he only did so in order to protect himself from prosecution during martial law.

IssueWON Frivaldo is a Filipino citizen

HeldNOIf Frivaldo really wanted to disavow his American citizenship, he could have done so in three ways 1) by direct act of Congress, 2) by naturalization and 3) by repatriation. Repatriation cannot be achieved by active participation in Philippine elections. He may have forfeited his US citizenship in doing but this does not mean that he has reacquired Philippine citizenship. Simply filing a certificate of candidacy does not allow him to recover Philippine citizenship. FRIVALDO V COMELEC (1996)

SummaryFrivaldo took his oath of allegiance after his certificate of candidacy had been filed.

IssueWON Frivaldo had reacquired Philippine citizenship

HeldYESThe repatriation of Frivaldo retroacted to the date of the filing of his application. The law does not specify any particular date or time when the candidate must possess citizenship unlike that for residence and age. Being a former Filipino, he deserves a liberal interpretation of the Philippine laws.

LABO V COMELEC (1989)

SummaryLabo was elected mayor of Baguio. A petition for quo warranto was filed against him on the ground that he was not a Filipino citizen. The COMELEC held that he was a citizen but the BOI held that he was Australian since an official statement from the Australian government stated that he was still Australian. Labo alleges he asked for a change of status from immigrant to a returning former Philippine citizen. His naturalization only made him, at worse, a dual citizen. He was also married to an Australian and it was later annulled on the ground of bigamy. IssueWON Labo had been divested of his Filipino citizenship

HeldYESThere are modes by which Philippine citizenship may be lost. This includes naturalization in a foreign country, express renunciation of citizenship and subscribing to an oath of allegiance to support the Constitution of a foreign country, all of which apply to Labo. Dual allegiance is inimical to the national interest. Even if his marriage to the Australian was annulled for being bigamous, it does not amount to restoration of his citizenship. Rejection of his Australian citizenship does not mean an automatic reinstatement of his Philippine citizenship. Third, there was no judicial decree of naturalization issued in Labo’s favor.

2. Express Renunciation of Citizenship

AZNAR V COMELEC (1990)

SummaryOsmena was candidate for governor of Cebu. A petition for disqualification was filed against him for being a US citizen. The Deportation Commissioner issue a certificate that Osmena was American held an Alien Certificate of Registration. Osmena argued that he was Filipino, held a Philippine passport, was a resident of the Philippines since birth and was a registered voter.



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IssueWON Osmena is a Filipino citizen

HeldYESCOMELEC failed to present direct proof that Osmena had lost his Filipino citizenship. He was not naturalized, he had not expressly renounced his citizenship and he had not subscribed to an oath of allegiance to another country. The mere fact that he holds an alien certificate registration does not mean that he had renounced his citizenship. The fact that the document states that the certificate states that he is Filipino does not mean that he is not Filipino. Because his father is a Filipino, there is a presumption that Osmena is Filipino. Osmena holds a valid passport and had continuously participated in elections in the country.

3. Subscribing to an Oath of Allegiance to support the Constitution or Laws of a Foreign Country upon attaining 20 years of age (subject to certain exceptions)

4. By rendering service to or accepting commission in the armed forces of a foreign country subject to certain exceptions

5. By having been declared by competent authority, a deserter of the Philippine armed forces in time of war, unless subsequently, a plenary pardon or amnesty has been granted;

6. In case of a woman, upon her marriage to a foreigner, if by virtue of the laws in force in her husband’s country, she acquires his nationality; and

7. By cancellation of the certificate of naturalization.

Sec. 18 of the Naturalization Law provides that upon motion made in the proper proceedings by the SolGen, the Judge may cancel that naturalization certificate issued and its registration in the Civil Registry for any of the following reasons:

o If it is shown that said naturalization certificate was obtained fraudulently or illegally;

o If the person naturalized shall, within five years next following the issuance of said naturalization certificate, return to his native country or to some foreign country and establish his permanent residence;

Provided that the fact of the person naturalized remaining for more than one year in his native country or the country of his former nationality or two years in any country, shall be considered as prima facie evidence of his intention of taking up his permanent residence there

o If the petition was made on an invalid declaration of intention;

o If it is shown that the minor children if the person naturalized failed to graduate from public or private high school recognized by the Bureau of Private Schools, where Philippine history, government and civics are

taught or prescribed as part of the school curriculum, through the fault of their parents either by neglecting to support them or by transferring them to another school or schools. A certified copy of the decree cancelling the naturalization certificate shall be forwarded by the Clerk of Court to the Office of the President and the Office of the Solicitor General;

o If it is shown that the naturalized citizen has allowed himself to be used as a dummy in violation of the Constitution or legal provisions requiring Philippine citizenship as a requisite for the exercise, use of enjoyment of a right, franchise or privilege

A judgment directing the issuance of certificate of naturalization is a mere grant of political privilege and that neither estoppel nor res judicata can be invoked to bar the State for initiating an action for the cancellation or nullification of the certificate of naturalization thus issued.

If it is shown that the naturalization certificate was obtained fraudulently or illegally, the certificate may be cancelled. The decision in a naturalization case does not become res judicata.

REPUBLIC V LI YAO (1992)

SummaryLi Yao was a naturalized citizen. SolGen filed a petition to cancel his naturalization because he had obtained such through fraud and tax evasion. Li Yao died pending appeal.

IssueWON the cancellation of the certificate of naturalization is valid

HeldYESCertificate may be cancelled if it is subsequently discovered that the applicant obtained it by misleading the court upon any material fact. A naturalization proceeding is not a judicial adversary proceeding, the decision rendered there does not constitute res judicata as to any matter that would support a judgment cancelling a certificate of naturalization on the ground of illegal or fraudulent procurement.

E. PROBLEMS IN APPLYING THE NATIONALITY PRINCIPLE

1. Dual or Multiple Citizenship

According to the Hague Convention, each state determines who its own nationals are. Any question as to whether or not a person possesses the nationality of a particular state shall be determined according to the State’s internal law.

Therefore it is possible that an individual can be claimed as a national of two or more states.

Instances of dual/multiple citizenship

o Applying jus soli and jus sanguinis, a child born of parents who are nationals of a country applying jus sanguinis in a country



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applying the jus soli principle has dual nationality.

o A Filipino citizen who marries an alien may acquire the citizenship of his or her spouse if the spouse’s national law so allows. A Filipino citizen, however, who marries an alien shall retain Philippine citizenship unless by his or her act or omission, he is deemed under the law to have renounced it by taking an oath of allegiance to the spouse’s country or by express renunciation.

o An individual who is naturalized citizen of another state but has not effectively renounced his former nationality.

NOTTEBOHM CASE –LIECHTENSTEIN V GUATEMALA (1955)

SummaryGuatemala expelled and refused to readmit Nottebohm, a German national and seized his property without compensation. Nottebohm lived in Guatemala for 34 years and Guatemala became his main seat of interest and he stayed there until he was expelled. Nottebohm settled in Liechtenstein. Liechtenstein asked for damages and the restoration of Nottebohm’s property in Guatemala. Guatemala argues that Nottebohm had not legally acquired Liechtenstein nationality.

IssueWON Nottebohm was a national of Liechtenstein

HeldNOHe had no settled abode in Liechtenstein. His stay there was transient. He went to Liechtenstein only because Guatemala refused to admit him.

OH HEK HOW V REPUBLIC (1969)

SummaryOh applied for naturalization which was granted. Oh asked that he be allowed to takethe oath of allegiance and this was granted. The government appealed that his naturalization be cancelled because the certificate was issued and the oath was made before the court order was made. The motion was granted but, at the same time, Oh was authorized to take a new oath and the issuance of another certificate of naturalization to validate the first one made.

IssueWON Oh had validly renounced his citizenship under Chinese law

HeldNOOh had not secured from the Interior Minister in China the permission to validly renounce his nationality. For naturalization to be effective, renunciation should be effected according

2. Statelessness

Two kinds of statelessness:o De jure: Refers to an individual who has

been stripped of his nationality by his former government without having an opportunity to acquire another

o De facto: Stateless persons are individuals possessed of a nationality but whose country does not give them protection outside their own territory. They are commonly known as refugees.

1951 Geneva Convention on the Status of Refugees provided basic rights of stateless persons.

1954 UN Conference on the Elimination or Reduction of Future Statelessness was convened and adopted a Convention on the Reduction of Statelessness in 1961.

o Conditions under which an individual would not lost his or her nationality upon the risk of becoming stateless should a new nationality not be provided:

Marriage Divorce Adoption Naturalization Expatriation

o Major objective is to remedy the situation of children born without acquiring any nationality which arises when a child is born in a country following the jus sanguinis principle of parents who are citizens of a jus soli country.

o Convention mandates that the jus sanguinis country grant its nationality to a person born within its territory if he would otherwise be stateless and the jus soli country to extend its nationality to a person who would otherwise be considered stateless when one of his parents is a citizen of the contracting state.

KOOKOORITCHKIN V SOLGEN (1948)

SummaryKookooritchkin filed a petition for naturalization which was eventually granted. He was a native-born Russian who arrived in the Philippines as a member of the White Russians under Admiral Stark. He married a Filipino. It was established that he was a stateless refugee. Solgen appealed, claiming that Kookooritchkin was not stateless but was a Russian citizen. He had failed to show that under the laws of Russia, Kookooritchkin had lost his Russian citizenship.

IssueWON Kookooritchkin was stateless

HeldYESKookooritchkin was a citizen of the Empire of Russia but that Empire has since then ceased to exist since the Czars were overthrown by the Bolsheviks and has now become a Communist nation. It would be technically fastidious to require further evidence of his statelessness since he has since fled Russia.

X. DOMICILE

A. DEFINITION

DOMICILE Municipal law definition



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o natural persons: for the exercise of civil rights and the fulfillment of civil obligations, the domicile of natural persons is the place of their habitual residence. (Art. 50, Civil Code)

o juridical persons: domicile is determined by the law creating or recognizing it. In the absence thereof it shall be understood to be the place where their legal representation or place of business is.

Conflict-of-laws definitiono the place with which a person has a settled

connection for certain legal purposes, either because his home is there or because that place is assigned to him by law

Domicile has acquired a technical meaning; a person may live in a place where he is NOT domiciled.

The following requirements must concur:o Intention to make it one’s domicileo Physical presence in the place

Residence on the other hand requires only bodily presence of an inhabitant in a given place. “Domicile is not exactly synonymous with the term residence. Domicile refers to relatively more permanent abode of a person, while residence applies to a temporary stay…” (Koh v. CA)

CAASI V CA (1990)FACTS: Miguel won as Mayor of Bolinao. Caasi, a rival candidate,

objected to Miguel’s qualifications on the ground that the latter was a green card holder, hence a permanent resident of America and not of Bolinao. (COMELEC dismissed the contest, holding that the possession of a green card does not establish Miguel’s abandonment of his Philippine residence)

When Miguel returned to the Philippines in November 1987, he stayed in Bolinao for only three (3) months before the elections on January 18, 1988.

ISSUE: WON Miguel is a resident of Bolinao, and not US.

HELD: Miguel lost his Philippine residence. The law requires that the candidate who is a green card

holder must have waived his status as a permanent resident or immigrant of a foreign country. Miguel’s act of filing a certifícate of candidacy for elective office in the Philippines did not itself constitute a waiver of his status as a permanent resident or immigrant of the US.

There must be some other act independent of and prior to the filing of his candidacy. No evidence that Miguel waived his status as green card holder before he ran for mayor.

Local Gov’t Code requires residence of one (1) year in the municipality (to get acquainted with the place’s condition).

Omnibus Election Code has a policy of banning Philippine citizens with dual loyalties and allegiance.

UYTENGSU V REPUBLIC (1954)FACTS: Uytengsu born of Chinese parents in Dumaguete. Went to

the US to study in Stanford University (1947 - 1950). In April of the same year he returned to the Philippines for a 4-month vacation.

Uytengsu filed his application for naturalization on July 15, 1950. Fortwith, he returned to the US and took a post-grad course in Indiana which he finished in 1951. He came back to the Philippines later that year.

CFI of Cebu granted his application for naturalization, which the gov’t opposed on the ground that Uytengsu DID NOT reside in the Philippines continuously from the date of filing of the petition.

For almost 5 years Uytengsu resided in the US, 3 years before the application for naturalization, 2 after..

ISSUE: WON Uytengsu satisfied the requirements of the Naturalization Law.

HELD: Residence and Domicile are NOT SYNONYMOUS in

relation to citizenship, jurisdiction, limitations, school privileges, probate and succession.

One is a resident of a place from which his departure is indefinite as to time, definite as to purpose; and for this purpose he has made the place his temporary home.

Residence is an act. Domicile is an act coupled with an intent.

The question of domicile is NOT INVOLVED in determining whether a person is a resident of a state or country.

In this case, actual and substantial resident within the Philippines, not legal residence (domicile) alone is essential to the enjoyment of the benefits of the exemption.

B. MERITS AND DEMERITS OF DOMICILE

MERITS In common law countries, domicile is the preferred primary

connection between a person and a state; it satisfies the very purpose for having a personal law.

It provides for an adequate basis for the person to exercise rights (in the place where he establishes his permanent home), and for the state to impose duties on him.

Domicile is suitable for federal systems of government, since the law of the domicile is the law of the place where the individual lives.

DEMERITS1. One’s domicile is not ascertainable without first resorting to

the courts to establish whether or not there is animo manendi.

2. The notion of domicile differs widely with some states distinguishing between residence and domicile or attributing different meanings of domicile for different purposes.

3. If the law of the domicile of origin is given overriding significance, then it may create the same problem of attenuated connection we saw in the use of nationality as personal law. (Why should the law imposed at birth, independent of one’s free choice be given weight when the person has no significant ties with the state?)

GENERAL RULE: The Philippines follows the nationality law theory, pursuant to Art. 15 of the Civil Code. Except:

o In cases where the litigant is an alien who comes from a country following the domiciliary principle.

o Stateless persons or those with dual or multiple nationalities (then the court would have to refer to domicile).

o When an alien domiciled in the Philippines executes a will abroad. Formalities of the will may be governed by the law of the domicile.

o In a revocation of a will outside the Philippines, validity of revocation must follow the law of the domicile of the testator.



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C. GENERAL RULES ON DOMICILE

FIRST: No person shall be without a domicile. A person’s domicile of origin prevails until he acquires a new domicile.

SECOND: A person cannot have two simultaneous domiciles, since the very purpose for identifying one’s domicile is to establish a connection between the person and a definite legal system.

THIRD: It establishes a connection between a person and a particular territorial unit.

FOURTH: The burden of proving a change of domicile is upon whoever alleges that a change has been secured. There must be overwhelming evidence, otherwise the courts will decide in favor of continuance of domicile.

Courts may have different notions of domicile and may attribute these varying meanings for different purposes.

A person can have only one domicile for a given purpose or a given time under the law of one state, but it should not be assumed that the determination will be binding on other states, or on the same state for other purposes.

ROMUALDEZ-MARCOS V COMELEC (1995)FACTS: Imelda Marcos filed her COC for Representative in the First

District of Leyte. Initially, she indicated that her length of residence in the place she sought to be elected was “7 MONTHS”.

Cirilo Montejo filed a petition for cancellation and disqualification, on the ground that Imelda did not meet the constitutional requirement of residency (must be a resident for a period not less than one year). Imelda then amended her COC changing seven months to “since childhood.” COMELEC cancelled Imelda’s COC, stating that her animus revertendi was San Juan, Manila, and not Tacloban.

HELD: Imelda was a resident of Tacloban since childhood. For purposes of election law, residence is synonymous with

domicile (meaning residence refers to domicile). It is the fact of residence, not a statement in the COC which

ought to be decisive in determining WON an individual has satisfied the constitutional requirement.

An individual does not lose his domicile even if he has lived and maintained residence in different places. The COMELEC was referring to petitioner’s various places of (actual) residence, not her domicile.

A minor follows the domicile of her parent. Tacloban was her domicile of origin by operation of law.

Domicile of origin is not easily lost. To fully effect a change of domicile, one must demonstrate:

a. Actual removal from domicileb. Bona fide intention of abandoning the former place

of residence and establishing a new onec. Acts which correspond with purpose.

By her marriage to Marcos, assuming that he fixed any of the places they lived in as conjugal residence, Imelda merely gained upon marriage actual marriage. She did not lose her domicile of origin.

UJANO V REPUBLIC (1966)FACTS: Ujano was born in 1900 of Filipino parents in Ilocos Sur. He

went to the US where he stayed for more than 20 years, acquiring citizenship by naturalization.

In 1960 he returned to the Philippines and filed a petition seeking reacquisition of his Philippine citizenship, with intention of renouncing his allegiance to the US.

Court denied the petition on the ground that petitioner did not have the residence required by law, which was 6 months.

HELD: Ujano failed to satisfy the Consti requirement. Residence requirement in cases of naturalization has

already been interpreted to mean the actual or constructive permanent home otherwise known as legal residence or domicile.

It is characterized by animus manendi. An alien who comes to the Philippines for business or pleasure cannot be said to have established his domicile here, because the period of his stay is only temporary.

Ujano, who was an American citizen at the time, was admitted into the Philippines as a temporary visitor, a status he maintained at the time of filing of the petition. Such being the case, he has not complied with the 6-month residence required by law.

IN RE: DORRANCE’S ESTATE (1932)FACTS: In 1897 John T. Dorrance entered the employ of the

Campbell Preserve Company in Camden, NJ, in which his uncle had a substantial interest. He established his residence in Camden during the start of his career.

Dorrance and his wife then moved to Philadelphia in 1908, and remained there until 1911. He subsequently purchased a country place in NJ, and the Commonwealth concedes that from May 7, 1911 to Nov. 14, 1925, Dorrance’s domicile was New Jersey.

From Nov. 14, 1925, the family moved to Radnor. From this time until his death, Dorrance was domiciled in Pennsylvania.

His domicile is now the subject of the inquiry, since the estate wishes to avoid paying substantial taxes on personal property.

ISSUE: May expressions of a man to the effect that he desires to retain a domicile of choice in one state prevail over the intention to make a new home manifested by an actual removal to the new residence in another state, and accompanied by a manner of living?

HELD: Dorrance was domiciled in Pennsylvania at the time of his death. GR: a person’s expression of desire may not supersede the

effect of his conduct. A man cannot retain a domicile in one place when he has moved to another, and intends to reside there for the rest of his life, by any wish, declaration, or intent inconsistent with the dominant facts of where he actually lives and what he actually means to do.

A declaration as to domicile that is self-serving and not followed by acts in accordance with the declaration will not be regarded as conclusive, but will yield to the intent which the acts and conduct of the person clearly indicate.

There must be BOTH actual residence and an intention of remaining (animus manendi) before a domicile may be established.

D. KINDS OF DOMICILE

1. Domicile of Origin - person’s domicile at birth legitimate child follows father’s domicile illegitimate child follows mother’s domicile

2. Domicile of Choice - voluntary domicile, the place freely chosen by a person sui juris.



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There must be concurrence of physical presence in the new place and unqualified intention to make that place one’s home.

3. Constructive Domicile - by operation of law, domicile is assigned to persons legally incapable of choosing their domicile. It includes:

Minors Mentally disabled Married women

Difference between Origin and Choice:1. Domicile of Origin enjoys staunch presumption of

continuance compared to domicile of choice.2. Domicile of Origin is not lost by mere abandonment and

remains until replaced by domicile of choice. Since domicile of choice is acquired upon concurrence of animo et facto, it is deemed extinguished by removal of intent even prior to acquisition of a new domicile.

3. Domicile of Origin is presumed to be revived once domicile of choice is given up, and before a new one is acquired (reverter or revival doctrine).

Criticism for reverter doctrine: it violates the well-settled principle of domicile: that a person retains his domicile until a new domicile of choice is secured and that a new domicile is established upon concurrence of fact and intention.

LENGTH OF STAY IS IMMATERIAL. As long as there is no intention to return to the old domicile, a new domicile is created, whether the intention to remain is for the rest of one’s life, or for an indefinite period.

MOTIVE TO CHANGE DOMICILE IS IMMATERIAL. Courts wills not weigh the ethical values of his motives.

VELILLA V POSADAS (1935)FACTS: Arthur Moody, an American citizen, engaged in business

her, and died in Calcutta, India in 1931. Moody executed a will, bequeathing all his property, to his only sister Ida Palmer, who was a citizen and resident of New York.

Moody was also a transient in Paris for three months before he went to India.

BIR prepared for the estate of Moody an inheritance tax return. The estate questioned it, stating that since Moody was not a resident of the Philippines, his intangible personal property should not be subject to inheritance tax.

ISSUE: WON Moody was legally domiciled in the Philippines at the time of his death.

HELD: No statement by Moody that he had adopted a new domicile

while he was absent from Manila. There is no evidence as to where in Paris he had any fixed

abode that he intended to be his permanent home. Court applied Art. 40 of the Civil Code, which defines

domicile as the place of usual residence.

EAP: Moody in his letter from India expressed his intention never to live in the Philippines again, since he was trying to avoid confinement in the Culion Leper Colony. It should have been considered animo non revertendi (intention to abandon). The Court in this case looked into the motives of Moody, when such was irrelevant in determining domicile.

WHITE V TENANT (1888)FACTS: Michael White initially lived in West Virginia, but decided to

sell his farm and move to Pennsylvania with his wife, with the declaration, intent and purpose of making Pennsylvania

their home. White unloaded his household goods and turned loose his livestock in his new farm.

His wife became ill, and finding the new place damp and uncomfortable, they decided to return to West Virginia, where his wife remained to recover. Everyday White made the trip to Pennsylvania to tend to his flock.

Weeks later, White also contracted the typhoid, and died intestate in the West Virginia house.

The issue of domicile determines the succession rights of the heirs.

HELD: Two things must concur to establish domicile: fact of

residence, and the intention of remaining. When domicile is definitely abandoned, and a new one

selected and entered upon, length of time is not important. One day will be sufficient, provided the animus exists.

Even when point of destination is not reached, domicile may shift in itinere. Facts conclusively show that Michael White abandoned his residence with the intention and purpose of making Pennsylvania his home.

CARABALLO V REPUBLIC (1962)FACTS: Ricardo Caraballo, an American citizen, was enlisted in the

US Air Force and detailed in Clark Airbase. He and his wife desired to adopt as their child Norma Lee Caber, natural daughter of one Mercedes Caber.

Caraballo and his wife have reared the child since her birth. Caraballo filed a petition for adoption of the child, but the Fiscal of Pampanga opposed, on ground that as a non-resident alien, Caraballo was not qualified (under Art. 335 a non-resident alien cannot adopt).

HELD: Actual or physical presence or stay of a person in a place,

not of his free and voluntary choice and without intent to remain there indefinitely, does not make him a resident of the place.

POLICY CONSIDERATION: interest of the state to protect the interests of the adopted minor; cannot be placed beyond the reach and protection of the country of his birth.

EAP: a person under compulsion should not be barred from proving that he has developed the required unqualified intention to establish his permanent abode in such place. If he intends to remain after the compulsion has been removed, such a person will be able to acquire a domicile of choice.

GO CHEN AND GO LEK V CC (1932)FACTS: Petitioners were minor children of Go Tuan and Tan Bon.

When Go Tuan died, Tan Bon married another Chinese, and both of them came to the Philippines. Tan Bon was admitted as the wife of a Chinese merchant.

Tan Bon asked her children to join to come over to the Philippines.

ISSUE: WON a Chinese widow who was admitted to and acquired a residence in the Philippines as the wife of a Chinese merchant was entitled to bring in her minor children.

HELD: Tan Bon did not enter through her own but through that of

her second husband. If the right to enter is derived from her husband’s, and the right of the minor children from that of



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their father, then the petitioners, not being children of the second husband, ARE NOT ENTITLED TO ENTER.

EAP: All the minors should be treated the same way. Minors should follow the domicile of the father, but since the father was dead, the children should now be able to follow the domicile of the mother.

DE LA VINA V VILLAREAL (1920)FACTS: Narcisa filed a complaint against Diego Dela Vina alleging

that she was a resident of Iloilo, and that the defendant was a resident of Negros Oriental. That she was the legit wife of Diego, and that he had been adultery. Because of said illicit relations, defendant ejected Narcisa from the conjugal home.

Dela Vina contended that CFI Iloilo had no jurisdiction to take cognizance of said action for divorce, because he was a resident of Negros Oriental, and his wife must also be considered a resident of the same province because the domicile of the husband is also the domicile of the wife.

HELD: The wife may acquire another and separate domicile from

that of her husband where the theoretical unity of husband and wife is dissolved, as it is by the institution of divorce proceedings; or where the husband has given cause for divorce.

The case of Narcisa falls under one of the many exceptions mentioned.

EAP: Wife may nevertheless establish a separate domicile if she is justified in leaving her husband. The modern view however dispenses any presumption that wife’s domicile is the same as the husband’s. Each party establishes his or her own domicile completely independent of each other. Wife need not show that her husband has given cause for divorce or legal separation.

XI. PRINCIPLES ON PERSONAL STATUS AND CAPACITY

A. DEFINITION

RECTO V HARDEN (1959)FACTS: Harden engaged the services of Claro M. Recto to appear as

her counsel in an action against her husband, Fred, to secure an increase in the amount of support she was receiving.

For attorney’s fees, Mrs. Harden agreed to pay Recto 20 percent of the value of her share of the conjugal property after liquidation.

Pending appeal, Mr. and Mrs. Harden mutually released and forever discharged each other from all actions, debts, duties and claims to the conjugal partnership, which conveniently included Recto’s attorney’s fees.

Recto filed a motion alleging that the purpose of the instrument was to defeat his claim of attorney’s fees. Mrs. Harden argued that the contract between her and Recto was invalid, as it was to secure a divorce decree in violation of Philippine law.

HELD: The purpose of the contract with Recto was NOT to secure a

divorce, or to facilitate or promote the procurement of a divorce. It merely sought to protect the interest of Mrs. Harden in the conjugal partnership.

More importantly, Mr. and Mrs. Harden, both citizens of the US, their status and the dissolution thereof are governed by

the laws of the US, WHICH ALLOW DIVORCE. (thus the contract between Recto and Mrs. Harden is not contrary to laws, morals, good custom, public policy)

Applying Art. 15 of the Civil Code, status is governed by the national law (nationality principle).

B. LEGISLATIVE JURISDICTION DISTINGUISHED FROM JUDICIAL JURISDICTION

BARNUEVO V FUSTER (1913)FACTS: Fuster and Constanza Yanez were married in Spain in 1975.

In 1899 they agreed in a public document by which they resolved to separate and live apart.

Yanez commenced divorce proceedings against Fuster in CFI Manila, alleging adultery. The court decreed the suspension of their life in common, and directed that the communal property be divided between the parties.

Yanez alleges that the dowry brought into the marriage is paraphernal property.

ISSUE: WON Philippine courts have jurisdiction to decree divorce.

HELD: YES Jurisdiction of courts to decree a divorce is not comprised

within the personal status of the husband and wife, because the theory of statutes and of the rights which belong to everyone does not go beyond the sphere of private law.

The jurisdiction of courts and other questions relating to procedure are considered to be of a public nature and consequently are generally submitted to the territorial principle.

CFI Manila did not lack jurisdiction over the persons of the litigants, for, although Spanish Catholic subjects, they were residents of this city and had their domicile herein (CFI of Philippines have the power and jurisdiction to try actions for divorce. Decided during American occupation)

EAP: In the said case, courts applied the law of the domicile. General rule however is that in the case of aliens, Philippine Courts may apply national law if the country of the alien applies the nationality principle, or the law of the domicile if they follow the domiciliary principle (application of renvoi here).

Our laws no longer recognize absolute divorce, thus our courts can no longer try actions for divorce even if brought by persons whose national laws allow it.

Divorce is considered a violation of public policy (ESCAPE MECHANISM applied here).

C. BEGINNING AND END OF PERSONALITY The determination of the exact moment personality begins is

governed by the PERSONAL LAW

In the Philippines:

Art. 40. Birth determines personality; but the conceived child shall be considered born for all purposes that are favorable to it, provided it be born later with the conditions specified in the following Art..

Art. 41. For civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother’s womb. However, if the fetus had an intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four hours after its complete delivery from the maternal womb.



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Beginning of personality: BIRTH End of personality: DEATH

NOTE: A declaration of death issued by a competent court is considered valid for all purposes.

Upon death, some of his rights and obligations are totally extinguished, while others are passed on to his successors.D. ABSENCE

Determined by his PERSONAL LAWThree Ways of Dealing with Absence

1. REBUTTABLE PRESUMPTION that a person is dead when he has been absent for a number of years;

2. JUDICIALLY INVESTIGATED and established which results in legal effects similar to those of death; and

3. A JUDICIAL DECREE shall have to be issued declaring the person dead before legal effects of death take place.

The Philippines follows rebuttable presumption. Note that for the purposes of remarriage, a judicial decree of presumptive death is required.

Art. 390. After the absence of seven years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except those of succession.

The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of ten years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened.

Art. 391. The following shall be presumed dead for all purposes, including the division of the estate among heirs:(1) A person on board a vessel lost during a sea voyage, or on an airplane which is missing, who has not been heard of for four years since the loss of the vessel or airplane;

(2) A person in the armed forces who has taken part in war, and has been missing for four years;

(3) A person who has been in danger of death under other circumstances and his existence has not been known, for four years. For specific purposes, Philippine law requires that a

DECLARATION OF DEATH be issued before certain legal effects of death arise. For the purpose of contracting a subsequent marriage

(also, periods in Arts. 390 and 391 were reduced to 2 years)

E. NAME Determined by PERSONAL LAW

MODERN VIEW: A person’s name is determined by law and cannot be changed without judicial intervention.

In the Philippines: No person can change his name or surname without judicial authority. Grounds:

Ridiculous or tainted with dishonor or extremely difficult to pronounce;

When the change is necessary to avoid confusion; When the right to a new name is a consequence

of a change in status;

A sincere desire to adopt a Filipino name to erase signs of a former alien nationality which unduly hamper social and business life.

F. AGE OF MAJORITY Determined by his PERSONAL LAW Once emancipated, parental authority is terminated, and is

qualified for all acts of civil life, save certain exceptions. In the Philippines: RA 6809 lowered the age of majority to 18

years old, EXCEPT marriage-Delete this. Age of marriage IS 18. Are you referring to requirement of parental consent? If yes, put is as BUT marriage requires parental consent if parties are bet. 18-21.

G. CAPACITY GENERAL RULE: Determined by PERSONAL LAW

Attached to a person wherever he is EXCEPTION:

Liability in Tort – subject to the law of the place of tort Restrictions on the contracting capacity of a

married woman – in some jurisdictions, subject to the law governing the personal relations between the spouses

CONFLICTS OF LAW PROBLEM: when a person who is fully capacitated under his personal law enters into a contract which will be performed in a foreign country

INSULAR GOVERNMENT V FRANK (1909)FACTS: Insular Government of the Philippines entered into a contract

for with George Frank, to work as a stenographer. Frank received advances to cover his travel expenses.

The contract provided that in case of violation, Frank would be liable for the amount expended by the government for his expenses.

Before one full year lapsed on the contract, Frank left the company and refused to further comply with the terms of the contract.

In the action commenced by Insular, Frank alleged he was a minor at the time the contract was entered into (thus making the contract void).

ISSUE: WON Frank was a minor (what law applied to him)

HELD: At the time of the execution of the contact in Illinois, Frank

was an adult under the laws of the state. Frank based his defense on Philippine law, which stated that males did not reach their majority until they had reached 23 years old.

The Court applied lex loci contractus, in that matters bearing upon the execution, interpretation and validity of a contract are determined by the law of the place where the contract is made.

EAP: Court should have applied Frank’s national law (which was law of Illinois). This would yield the same result anyway, and would be more stable (consider a scenario wherein Frank entered into the contract OUTSIDE of Illinois.)

PART FOUR – CHOICE OF LAW PROBLEMS

XII. CHOICE OF LAW IN FAMILY RELATIONS



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Family law is an area of substantive law which inextricably reflects strong policies of the state often anchored on values and mores highly held by society.

A. MARRIAGE- LEX NATIONALII governs questions of family rights, and duties, status, conditions and capacity. (Art. 15, CC)

As a CONTRACT: Mere declaration by the contracting parties

in the presence of the solemnizing officer and 2 witnesses

signed by the contracting parties and their witnesses

attested by the solemnizing officer

As a SPECIAL CONTRACT:

entered into by a man and woman

both 18 years old solemnized by one authorized by

law permanent union , UNLESS

one dies; or annulled or declared void

cannot be abrogated , amended, or terminated by will

nature, consequences, incidents are governed by law

violation of marital obligations may give rise to penal or civil sanctions

1. Philippine Policy on Marriage and the Family- Art. XV, Sec. 2, 1987 Constitution: “Marriage as an inviolable social institution is the foundation of the family and shall be protected by the State.”

- Presumption of Validity of Marriage, Art. 220, CC: This rule is followed in order to give stability to the institution of marriage especially in conflict-of-laws problems.

2. Extrinsic Validity of Marriage- Follow lex loci celebrationis (law of the place of celebration). This is also contained in the Hague Convention on Celebration and Recognition of the Validity of Marriages (Article 2).- General rule: All states recognize as VALID those marriages celebrated in foreign countries if they complied with the formalities prescribed therein. This is in Art. 26 of the Family Code.- Extrinsic validity covers questions relating to the formalities or external conduct required of the parties or of third persons especially of public officers, necessary to the formation of a legally valid marriage.

- Formal requisites under Art. 3, Family Code: (1) Authority of the solemnizing officer;(2) Valid marriage license with exceptions;(3) Marriage ceremony with the appearance of the contracting parties before the solemnizing officer and their personal declaration that they take each other as H&W in the presence of not less than 2 witnesses of legal age.

ADONG V CHEONG SENG (1922)Estate of Cheong Boo is claimed by two parties (1) his alleged legitimate child from a marriage contracted in China in 1895, and

(2) his alleged legitimate spouse from a marriage in Basilan in 1896.

WON a marriage contracted in China and proven mainly by a matrimonial letter is valid in the PhilippinesNO- To establish a valid foreign marriage, it is first necessary to prove before the courts of the Islands the existence of the foreign law as a Q of fact, and it is then necessary to prove the alleged foreign marriage by convincing evidence. There is a need for proof that is clear, strong and unequivocal so as to produce a moral conviction of the existence of such impediment (prior marriage).

PEOPLE V MORA DUMPO (1935)Wife was convicted of bigamy and she appealed alleging that the second marriage was null and void according the Mohammedan rites on the ground that her father had not given his consent.

WON she should be held liable for bigamyNOIt is an essential element of the crime of bigamy that the alleged second marriage, having all the essential requisites, would be valid were it not for the subsistence of the first marriage. In this case, the fact that the father did not consent for the reason that he was not informed thereof, is fatal to the alleged marriage.

WONG WOO YU V VIVO (1965)The general rule is that a marriage contracted outside the Philippines which is valid under the law of the country in which it is celebrated is also valid in the Philippines. But in this case, no validity can be imputed to the marriage in China in the absence of proof relative to marriage laws therein.

APT V APT (1947)Celebration of marriage by proxy is a matter of form of the ceremony or proceeding, and not an essential requisite of marriage. There is nothing abhorrent to Christian ideas in the adoption of that form.

General rule is that if a marriage is good by the laws of the country where it is effected, it is food all the world over, no matter where the proceeding or ceremony which constituted marriage according to the law of the place would or would not constitute marriage in the country of domicile of one or of the other spouse.

Void marriages in the Philippines even if valid in foreign country where celebrated:

1. When either or both parties are BELOW 18 YEARS of age even with parental consent;

2. BIGAMOUS OR POLYGAMOUS marriage;3. MISTAKE AS TO IDENTITY of a contracting party;4. A subsequent marriage performed WITHOUT

RECORDING IN THE CIVIL REGISTRY the judgment of annulment or declaration of nullity, partition and distribution of properties and the delivery of the children’s presumptive legitimes;

5. Marriages where either spouse is PSYCHOLOGICALLY INCAPACITATED;

6. INCESTUOUS marriages; and7. VOID marriages by reason of public policy

NOTE: These exceptions put into issue the capacity of the parties to enter into the marriage and therefore relate to the substantive requirement for marriage. Since the personal law of the parties, e.g. the national law of Filipinos, governs the questions of intrinsic validity of marriages between the Filipinos abroad, the above



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enumerations are exceptions to lex loci celebrationis precisely because they are controlled by lex nationalii.

3. Intrinsic Validity of Marriage- refer to capacity of a person to marry

Determined by the parties’ PERSONAL LAW, which may either be domicile or nationality.

Intrinsic requirements: 1. LEGAL CAPACITY 2. Must NOT BE BARRED by any impediment3. CONSENT freely given in the presence of an

authorized solemnizing officer Hague Convention on Validity of Marriages allows a

contracting state to refuse recognition of the marriage in the ff. cases:i. One of the spouses was already marriedii. Spouses were related, by blood or adoptioniii. Had not attained the minimum age, nor acquired the

necessary dispensationiv. Did not have the mental capacity to consentv. Did not freely consent

NOTE: General rule on Proxy marriages:Where permitted to the law of the place where the proxy participates in the marriage ceremony, are entitled to recognition in countries adhering to lex loci celebrationis rule at least insofar as formal validity is concerned. In the Philippines, law does not sanction proxy marriages.

SOTTOMAYOR V DE BARROS (1877)First cousins and void marriage; domiciled in Portugal then moved to London to get married; wife filed petition to declare marriage invalid due to lack of consent.

Questions of personal capacity to enter into any contract is to be decided according to the law of the domicile. Law of a country where a marriage is solemnized must alone decide all questions relating to the validity of the ceremony by which the marriage is alleged to have been constituted. But personal incapacity, based on law of domicile, still affects them wherever such marriage may have been solemnized.

IN RE MAY’S ESTATE (1920)Jewish couple; residents of NY and married in Rhode Island; lower court ruled that marriage is void and husband did not qualify as administrator for estate of the deceased wife because wife was husband’s niece by blood

The general rule is that if a marriage is valid if considered valid in the place where celebrated. Two exceptions are when it is prohibited by positive law and involves polygamy or incest in a degree regarded generally as within the prohibition of natural law.

New York statute does not expressly declare such marriages void (marriage of its domiciliaries solemnized in a foreign state where such marriage is valid).

4. Effects of Marriage1. Personal relations between spouses Include:

marital fidelity, respect, cohabitation, support and the right of the wife to use the husband’s family name

governed by the NATIONAL LAW of the parties

NOTE: if the spouses have different nationalities, generally the national law of the husband may prevail as long as said law is not contrary to law, customs and good morals of the forum.

2. Property relations between the spouses The Hague Convention declares that the governing law on

matrimonial property regime is: The internal law designated by the spouses before the

marriage In the absence thereof, the internal law of the state in

which the spouses fix their habitual residence In the Philippines:

Art. 80, FC. In the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of celebration of the marriage and their residence. This rule shall not apply:(1) Where both spouses are aliens;(2) With respect to the extrinsic validity of contracts

affecting property not situated in the Philippines and executed in the country where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in the Philippines not affecting property situated in a foreign country whose laws require different formalities for their extrinsic validity.

DOCTRINE OF IMMUTABILITY OF MATRIMONIAL PROPERTY REGIME : The change of the nationality on the part of the husband or wife or both does not affect the original property regime EXCEPT when the law of the original nationality itself changes the marital regime, hence, the property regime has to change accordingly.

B. DIVORCE AND SEPARATION

Hague Convention provides that the granting of divorce or separation must comply with the NATIONAL LAW of spouses and LEX FORI (law of the place where the application for divorce is made)

Grounds for divorce: LEX FORI

Divorce Decrees Obtained by Filipinos GENERAL RULE: Decrees of absolute divorce

obtained by Filipinos abroad have no validity and are not recognized in Philippine jurisdiction.

EXCEPTION:Art.26(2).Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law.

Validity of Foreign Divorce between Foreigners Hague Convention: a

foreign divorce decree will be recognized in all contracting states if, at the date of the institution of the proceedings,i. either spouse had his habitual residence there;ii. both spouses were nationals of that state; oriii. if only the petitioner was a national, he should

have his habitual residence there

REPUBLIC V OBRECIDO (2005)



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Filipino husband left by Filipina wife, Filipina wife was naturalized as an US citizen then divorced him. He now wants a declaration allowing him to remarry again. Court held that A26.2 is also applicable to cases where the spouse who obtained divorce decree is a naturalized citizen of a State allowing divorce, provided the law allowing such divorce is proven + divorce decree proven. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.TWIN ELEMENTS FOR APPLICATION OF ART26.2:1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

HOWEVER, HERE, THE PETITION FOR AUTHORITY TO REMARRY GRANTED BY TC WAS SET ASIDE BECAUSE OBRECIDO FAILED TO PROVE THE FF:

1. Wife validly obtained naturalization2. Foreign law allowing divorce3. Wife validly obtained divorce decree

SAN LUIS V SAN LUISFormer Laguna governor had 1st spouse who predeceased him, then married again to an American citizen who divorced him, then remarried again. He died with his 3rd wife but his 2nd wife and the children in the 1st marriage contested the standing of the 3rd wife, claiming that the said marriage was bigamous since the 2nd marriage was still subsisting under RP law (can't apply FC retroactively). Court held that even with FC not applied retroactively, Van Dorn and other jurisprudence sufficiently provides the validity to the 3rd marriage, thus recognizing divorce obtained by an alien spouse against the Filipino spouse. However, as the 3rd marriage was not sufficiently proved, the case was remanded in order for the 3rd spouse to present further evidence on this.

C. ANNULMENT AND DECLARATION OF NULLITY

Traditional approach: LEX LOCI CELEBRATIONIS Policy-centered approach: law of the state of MARITAL

DOMICILE

Jurisdiction to Annul Vested in the court of the domicile of the parties Jurisdiction over the non-resident defendant is not

essential

The Governing Law Lex loci celebrationis – determines the consequences

of any defect to form In general, same applies with reference to substantive

or intrinsic validity. But with regard to capacity of the parties to marry, national law is determinative

D. PARENTAL RELATIONS

Determination of Legitimacy Legitimacy: personal law of the parents In the Philippines:

The legitimacy of the child is governed by the NATIONAL LAW of the parents

If parents belong to different nationalities, legitimacy of the child is governed by the NATIONAL LAW of the FATHER

Personal law of the illegitimate child is the MOTHER’S PERSONAL LAW.

Parental Authority Over the Child PERSONAL LAW of the FATHER controls the rights and

duties of parents and child.

NOTE: Reference to the personal law of the father may result in joint exercise of parental authority over the property of the child by the father and mother; or, in the case of the illegitimate child, to the mother alone.

E. ADOPTION- the act by which relations of paternity and affiliation are recognized as legally existing between persons not so related by nature.

Domestic Adoption Act of 1998 An alien may adopt, provided he is:

1. Of LEGAL AGE2. In possession of all CIVIL CAPACITY and LEGAL

RIGHTS3. Of GOOD MORAL CHARACTER4. No conviction of any crime involving moral turpitude5. Emotionally and psychologically capable of caring for

children6. At least 16 years older than the adoptee7. In a position to support and care for his children8. His country has diplomatic relations9. Residence in the Philippines for at least 3 continuous

years prior to the filing of the application for adoption and maintains such residence until the adoption decree is entered

10. Certificate of legal capacity to adopt in his country to be issued by his diplomatic or consular office; and

11. His government allows the adoptee to enter his country as his adopted son/daughter

The requirement on residency and certificate of qualification to adopt may be waived for the following:

i. A former Filipino citizen who seeks to adopt a relative within the 4th degree of consanguinity or affinity; or

ii. One who seeks to adopt the legitimate son/daughter of his/her Filipino spouse; or

iii. One who is married to a Filipino citizen and seeks to adopt jointly with his/her spouse a relative within 4th degree of consanguinity or affinity of the Filipino spouse.

The requirement of 16 years difference between the adopter and the adoptee may be waived if the adopter is:

i. The biological parent of the adopteeii. The spouse of the adoptee’s parent.

Inter-country Adoption DEFINITION: A socio-legal process of adopting a Filipino

child by a foreigner or a Filipino citizen permanently residing abroad where the petition is filed, the supervised trial custody is undertaken, and the decree of adoption is issued outside the Philippines.

This is an alternative means of child=care if the child cannot be cared for in any suitable manner in the Philippines.

NOTE: Adoption is not one of the ways prescribed by law for the acquisition of Filipino citizenship



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Effects of Adoption Two different legal orders:

12. If the adopters’ personal law applied – same law governs the effects of the adoption.

If the personal law of the child determined the creation of the legal relationship – such law will cease and yield to the personal law of the adopting parents

XIII. CHOICE OF LAW IN PROPERTY

A.THE CONTROLLING LAW-depends on WON the property is movable or not

Immovable Movable

Lex situs: rights, interests of various person are determined by the law of the place where the land is situated

May be:1. Lex domicili (mobilia sequuntur personam):they could be moved from place to place, difficult to anticipate where they may be situated at a given time2. lex situs: >Traditional reason: the state has the sole power to decide the validity and effects of the transfer of property>Policy-oriented rationale: parties expect their transaction would be governed by the law of the place where the property is located3. Lex loci actus (law of the place where the transaction was completed)4. Proper law of transfer: law of the state which has the most real connections with the transfer

EAP notes: Difference if traditional reason or policy-centered approach? Traditional approach: centers on the territory: since it is part of the territory of the state, it is the state's law which would governPolicy-oriented: most significant contacts, state whose interest is less impaired

In RP: ART414: property is anything that may be an object of appropriationART 16: irrelevant if real or personal property (as regards nationals) - lex situs appliesProblem: what if the place where the property is located distinguishes between rules applicable to real and personal property and the applicable law is not their law?

Why RP adopted Lex Situs? Being physically part of the country, it [the property] should be

subject to the laws thereof. The situs is the place most closely and significally related to the

issue in question Increase in the amount and variety of personal property not

connected w/ the person of the owner, so adopt lex situs even with movables.

B. CAPACITY TO TRANSFER OR ACQUIRE PROPERTY-governed by LAW OF THE PLACE WHERE THE PROPERTY IS LOCATED: LEX SITUS

LLANTINO V. CO LIONG CHONG (1990)Facts:Co Liong Chong entered a contract with Llantino Sps for a lease of land for a period of 60 years. Note that Co Liong Chong was naturalized as a Filipino citizen (changed name to Juan

Molina).Llantino sps wanted to recover the property from Co Liong Chong.

Issue:WON the lease contract is INvalid because at the time of its execution, he was a Chinese?

Held: NO. it was VALID. Lease contracts with Aliens allowed since an alien's stay in RP is temporary, they may be granted temporary rights such as a lease contract which is not prohibited by the constitution-the lease contract is valid as long as there are no circumstances attendant to its execution which are used to circumvent the constitutional prohibition such as an option to buy the contract or a lease for more than 50 years.An exception to this exception is when the alien subsequently acquires Philippine Citizenship.

EAP Notes-it's merely TEMPORARY possession of property - not ownership-Why prohibit ownership of lands of aliens? To preserve properties in favor of Filipinos

CHEESMAN V. IAC (1991)FactsAmerican married to a Filipina. Filipina wife sold land and house on it, initially w/o protest from American husband, but later contesting it, raising that the sale was made w/o his knowledge and consent (prerogative of the husband in respect to conjugal property).

IssueWON the American husband can contest the validity of the sale?

HeldNO. In accordance with the Constitution, aliens cannot have private lands transferred or conveyed to them except in cases of hereditary succession. Thus, the alien husband here does not have personality to contest the validity of the sale as the husband of the seller, he not allowed to have interest over the land.-note: here, trial court found that the property was bought by the Filipina wife with her own funds and the buyer was held a buyer in GF because the alien spouse led her to believe that the property was indeed the Filipina wife's and not a conjugal property.

EAP notes: PFR review: administration and management of property is jointly exercised by spouses…so what happens now? -Aliens can't have conjugal properties, or else would contravene Consti provisions prohibiting ownership of aliens-possibly, alien spouse may still exercise share in conjugal properties if it is converted to movable properties, i.e. cash!!!! - but as long as it is immovable, can't own anything

C.EXTRINSIC AND INTRINSIC VALIDITY OF CONVEYANCES

Formalities (extrinsic) Essential validity (intrinsic)

lex situs-treated as a question of contract and not of property

GR: lex situsX: lex intentionis clearly established

D.EXCEPTIONS TO LEX SITUS RULE1. Transaction does not affect transfer of title to or ownership of the land2. When transaction is merely an accessory to a principal contract 3. Testate/Intestate Succession & capacity to succeed



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1. Transaction does not affect transfer of title to or ownership of the landApply: lex intentionis or lex voluntatis

LILJEDAHL V. GLASSGOW (1921)FactsBailey owed money to Foskett so he executed a mortgage over a Colorado land in favor of Foskett. Bailey later sold the mortgaged Colorado land to Glassgow, with a deed containing a blank space for the insertion of the name of the grantee (who would then assume the liability in the mortgage). Glassgow made subsequent transfers. Foskett transferred his interest to Liljedal so when the debt was due and Bailey was not able to pay, Liljedal sued Glassgow, et al. As a defense, they alleged that in the lex situs, he is not liable as he did not place his name in the blank.

IssueWON the lex situs would apply, and not the lex intentionis?

HeldLex intentionis (where the transferee is liable for payment of obligation upon mere acceptance f deed)Instruments of conveyance primarily or directly relating to the tile follow lex rei sitae; personal covenants or agreements in instruments of conveyance follow law of the place where the same is executed and to be performedContracts made and to be performed in a particular state are made with reference to the law of that state.The parties may be presumed to have contracted with reference to the law of Iowa, where the contract was executed and to be performed, and that they intended to be bound in accordance therewith.

2. When transaction is merely an accessory to a principal contract (i.e. mortgage for a loan)Apply: lex situs applies to the mortgage contract (thus, this is still not an exception) but law on contracts govern the principal contract

3. Testate/Intestate Succession & capacity to succeed Apply: lex nationali or the national law of the decedent (A16.2, NCC)

On Movables:Policy-centered approach: forum court not bound to look to the law of the situs when *the situs is INSIGNIFICANT OR INCIDENTALe.g. place merely chosen for convenience of one of the parties, when they both know that the property would be used somewhere else*when the issues involves considerations other than the validity and effect of the transfer itself>>>APPLY: law of the place which has real interest in the property

E.SITUS OF CERTAIN PROPERTIES1. SITUS OF PERSONAL PROPERTY FOR TAX PURPOSES-CAN'T apply mobilia sequuntur personam (had its origins in considerations of general convenience and public policy)

mobilia sequuntur personam: a common law doctrine holding that personal property held by a person is governed by the same law that governs that person, so that if a person who is legally domiciled in one jurisdiction dies with property in a second jurisdiction, that property is legally treated as though it were in the first jurisdiction.

-STATE has right to tax property w/n its jurisdiction -can't be applied if it would result in inescapable and patent injustice

ASIATIC PETROLEUM V. CO QUICO (1940)

*warning: not a tax case so ligaw Facts: Co Quico was an agent of Asiatic Petroleum who defaulted in payment of the proceeds of his sale for the latter company. Company filed suit to recover amount, attached his bank deposits w/ Mercantile Bank of China.

Issue WON the court validly exercised jurisdiction over the property of Co Quico even if the court did not acquire jurisdiction over his person?

HeldYES. All property w/n a state is subject to the jurisdiction of its courts, and they have the right to: Adjudicate title thereto Enforce liens thereupon Subject it to the payment of the debts of its owners…whether residents or not-modern tendency is to make NO DISTINCTION BETWEEN MOBILITY AND IMMOBILITY OF PROPERTY established by the time honored principles of lex rei sitae and mobilia personam sequuntur

Review: Cf: Pennoyer vs. Neff: If personal actions, should give summons personally and not through publication or else no jurisdiction over person of defendantquasi in rem: De Midgeley v. Ferandos: A quasi in rem action is an action between parties where the direct object is to reach and dispose of property owned by them or some interest therein. Jurisdiction was acquired because it was a quasi in rem action, where jurisdiction over the person is not required and where the service of summons is required only for the purpose of complying with the requirement of due process.In rem: where the direct object is to reach and dispose of property owned by them. (i.e. testamentary proceeding which is an action in rem par excellance)

2. SITUS OF MONEYLEON V. MANUFACTURERS LIEF INSURANCE CO. (1921)(warning: just mentioned in the body of ma’am’s discussion, not separate case discussion so ung ibang parts hula lang)Facts-Leon probably wanted to recover money from an instrument endorsed in an annuity in Canada so he sued the local branch or agency of Manufacturers Life Insurance in RP to recoverHeldSince the money to be recovered was from an instrument endorsed in an annuity in Canada under a contract executed in that country, CANADA WAS THE SITUS OF THE MONEY-the local branch impleaded delivered to the annuitant the checks made out and issued from the home office in CANADA, but no showing that the funds (the money) was indeed transferred from CANADA to the home branch*cha: Only Checks were in the local branch, not money. Probably, the pleading prayed that money, not checks were to be levied on or something. Boo… this case is labo

3. SITUS OF DEBTS-still UNSETTLED in RP-suggested that the law w/c governs the contract from which the debt arises should govern the transfer of the debt

2 kinds of movable property:1. Choses in possession: all kinds of TANGIBLE PHYSICAL

OBJECTS2. Choses in action: INTANGIBLE objects

a. Mere rights of action: debt arising from a loan



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b. Rights represented by a document: capable of delivery, susceptible to negotiation as a separate legal entity

HARRIS V. BALK (1905)FactsHarris owed Balk $180 (in North Carolina), who owed more than $300 to Epstein (in Maryland). When Harris was in Maryland, Epstein served a writ of attachment to the debt of Harris to Balk. Back in North Carolina, Balk wanted to collect from Harris.

IssueWON the situs of debt and character of stay important in attachment of debt?

HeldNo. The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes-If the garnishee be found in the State, and process be personally served upon him therein, the court acquires jurisdiction over him, and can garnish the debt due from him to the debtor of the plaintiff and condemn it, provided that the garnishee could himself be sued by his creditor in that State-Power over the person of the garnishee confers jurisdiction on the courts of the State where the writ issues. If, while temporarily there, his creditor might sue him there and recover the debt, then he is liable to process of garnishment, no matter where the situs of the debt was originally-Possession cannot be taken of a debt or of the obligation to pay it as tangible property might be taken possession of

CRITIQUE TO THE CASE: 2 premises which led to the conclusion in the case:1. Debt though intangible, is subject to seizure like tangible property2. The debt is LOCATED where the debtor is - can be sued wherever he is-BUT THIS MAKES THE CREDITOR HELPLESS TO FIX THE PERSONAL PRESENCE OF THE DEBTOR AT ONE PLACE OR ANOTHER…Unjust to submit the creditor's claim to the accident of the debtor's presence in one state or another

4. SITUS OF CORPORATE SHARES OF STOCKSCorporation Code: SEC 63…shares of stock issued by the corp are PERSONAL PROPETY…may be transferred by DELIVERY OF THE CERTIICATE OR CERTIFICATES INDORSED BY THE OWNER OR HIS ATTORNEY IN FACT or other persons legally authorized to make the transfer

Valid Transfer-valid between parties ONLY: not yet recorded -when valid to everyone: recorded in the books of the corporation …shows the names of the parties to the transaction…date of transfer…number of certificate or certificates …number of shares transferred

CIR V. ANGLO CALIFORNIA NATIONAL BANK (1960)FactsCIR wanted to collect "deficiency" income and capitl gainst tax from Calamba Sugar Estate Inc. for the sale of capital stock of Pampanga SUgar Mills (which was consumated in California).

IssueWON CIR could impose income tax and capital gains tax on sales of shares of stock (located in RP) which was consumated in California?

HeldNo. The NIRC imposes income tax on corporations only on income derived from sources w/n RP. The NIRC also defines the source of capital gains tax as the place of sale. Since the place of the sale is outside the Philippines, the income is thus derived from outside the Philippines, and so the corporation could not be taxed for the said transactions.-On argument of CIR that the situs of the shares of stock which is the subject of the sale is in RP, thus, the capital gains is derived in RP: no income tax imposed on the shares themselves!-the subject of the proceedings is the income derived by the sale of the shares of stock, NOT the income derived from the shares itself!

F. PATENTS, TRADEMARKS, TRADE NAME, COPYRIGHTParis Convention of 1893 (Union Convention for the Protection of Industrial Property)-RP became a party to it on September 1965-protects TRADE NAME in all countries of the Union w/o obligation of registration, WON it forms part of the trade name

WESTERN EQUIPMENT AND SUPPLY CO V. REYES (1925)A foreign corporation wanted to enjoin a domestic corporation who intends to use the foreign corp's name in RP, and would engage in the same business as the foreign corp, from using its name.

IssueWON the foreign corporation has legal capacity to sue to protect its reputation even if it’s not registered nor is doing business in RP?

HeldYes. The right to use the company's corporate and trade name is a property right which may be asserted against the whole world.-HANOVER STAR MILLING V. ALLEN AND WHEELER CORP: trademark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and identified by the use of the mark

RA 8293: INTELLECTUAL PROPERTY CODE OF 1998-established the Intellectual Property Ofice-does not allow corps to register as their trade names those which are 1. Well known internationally and in the RP, WON registered in RP (already used as a mark by some other person)2. Used for identical or similar goods or services-allows a corporation w/c may not be engaged in business or is not registered in RP to still file suit (civil or administrative) to protect its trade name (note: only owners of registered marks in RP can recover damages for trademark infringement)

PHILIPS EXPORT BV V. CA (1992)FactsForeign Company (Philips Export BV) and corporations allowed to use its name (Philips Electrical Lamps and Philips Industrial Develoment Corp) wanted the cancellation of the Certificate of Registration of Standard PHILIPS Corp., a domestic corporation which allegedly wanted to ride on the popularity and name of the foreign corp to sell its products (which, although alleged to just be engaged in chain rollers, belts, bearings, cutting saw, may actually sell the same products as that of the complainant).

IssueWON the foreign corporation could sue to protect its corporate/trade name

Held



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-a corporation's right to use its corporate and trade name is a property right, a right in rem, which it may assert and protect against the world in the same manner as it may protect its tangible property, real or personal, against trespass or conversion. It is regarded, to a certain extent, as a property right and one which cannot be impaired or defeated by subsequent appropriation by another corporation in the same field -A name is peculiarly important as necessary to the very existence of a corporation. Its name is one of its attributes, an element of its existence, and essential to its identity. The general rule as to corporations is that each corporation must have a name by which it is to sue and be sued and do all legal acts. The name of a corporation in this respect designates the corporation in the same manner as the name of an individual designates the person; and the right to use its corporate name is as much a part of the corporate franchise as any other privilege granted.-A corporation acquires its name by choice and need not select a name identical with or similar to one already appropriated by a senior corporation while an individual's name is thrust upon him. A corporation can no more use a corporate name in violation of the rights of others than an individual can use his name legally acquired so as to mislead the public and injure another.

EMERALD GARMENT MANUFACTURING CORPORATION V. COURT OF APPEALS (1995)(note: this is not applicable anymore under the IP Code)

FactsIn this case, RP Company used STYLISTIC MR. LEE. LEE international wanted the cancellation of the said trademark, alleging that it closely resembled its own trademark ("Stylistic Mr." was just a small marking at the side, then the "Lee" was similar to the "Lee" TM by the foreign corp).

IssueWON the foreign corporation's trademark is entitled to protection

HeldNO. Court held that since the international corp failed to prove prior actual use of 2 months before they had their TM registered in RP + using the Holistic approach in testing the TM, Stylistic Mr. Lee could still be used by the domestic corp. The case summary in Ma'am's book focuses though on the Prior Actual Use requirement (which is misleading because under the IPC, it's not required anymore), saying that even if the Paris Convention provides for the protection of TMs by foreign corporation even if it's not registered in RP, it doesn't mean that the said foreign law is superior to our own laws. The incorporation principle in Consti merely makes the Paris Convention equal in standing to our own laws.

XIV. CHOICE OF LAW IN CONTRACTS*The principal purposes of contract law: 1. to protect the reasonable expectations of the parties to the contract2. to secure stability in commercial transactions

A. CONTRACTS INVOLVING A FOREIGN ELEMENTWhat led to the problem of conflicts law?

Modern means of communications Growing number of agreements and stipulations

entered by persons or entities of different nationalities States have different municipal laws:

Formalities of contracts Capacity of parties

Essential requisites for the intrinsic validity of contracts

Interpretation of contracts Law governing execution thereof

*Parties intended applicable law: protect reasonable expectations*interpretation rules: applicable only when intended law can't be ascertained

EAP NotesFamily law: usually won't apply foreign law because family law would apply the law which reflects the values held highly by society of the forum Vs. Contract Law: not much attachment to the societies moral mores; reflect business practices

Extrinsic Validity Intrinsic Validity

Law of the place where the contract was entered (lex loci celebrationis)

Would depend:Lex loci contractusLex loci solutionisLex loic intentionis

B. EXTRINSIC VALIDITY OF CONTRACTS-follows law of the place where the contract was made ( lex loci celebrationis)2nd Reinstatement, Art17: follow law of the country where instrument is executed for forms and solemnitiesLocus regit actum: place governs the acts

If contracts entered through cablegram, telefax…Art1319(2), NCC: Acceptance made by letter or telegram does not bind the offeror except from the time it came to his knowledge>ff law of the place where the offer was made

ENGEL vs. VELASCO: where telegraphic communications are followed by letters expressly referring to the telegrams and confirming the same, such telegrams become adminssible as part of correspondence between parties

C. INTRINSIC VALIDITY OF CONTRACTSIntrinsic validity: refers to the nature, content and effects of the agreement

Elements of a Contract(A1318): a. Consentb. Object c. Consideration

There are 3 applicable laws:1. Lex Loci Contractus2. Lex Loci Solutionis3. Lex Loci Intentionis

1. Lex Loci Contractus (law of the place of making)TEST: look at the place where the last act is done w/c is necessary to bring the binding agreement into being so far as the acts of the parties are concernedADVANTAGE: • Relative ease in establishing the place of contracting• The principal purposes of contract which are certainty and stability are achievedDISADVANTAGE:• If place merely incidental, no significant relationship with the contract or its performance

2. Lex loci Solutionis (law of the place of performance)



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Scope:• Time• Place• Manner of performance• Sufficiency of performance• Valid excuses for nonperformanceAdvantage:• Always connected to the contract in a significant wayDisadvantage:• Gives extraterritorial effect to the laws of the former state (where the contract was made)• Not helpful when the contract should be performed in 2 or more states w/ conflicting laws on validity

MACMILLAN AND BLOEDEL V. TH VALDERAMA AND SONS (1964)FactsValderama entered into a contract w/ Macmillan in Canada through his agent, Splane. The contract required that Valderama acquire import license which was necessary for the opening of letter of credit (by Macmillan in Canada). Since Valderama did not acquire import license, Macmillan cancelled the contract, and incurred expenses in the process. Thus, sues Valderama. Valderama now alleges as a defense that Splane was not authorized to enter into the contract in behalf of Valderma, thus the contract was perfected in Manila, and the lex loci celebrationis is in Manila, thus, RP Law applicable

IssueWON RP Law is applicable

HeldNo. Regardless if lex loci contractus or lex loci solutionis is applied, Canadian law would still applyLex loci contractus Lex loci solutionis

law of the place where a contract is made or entered into governs w/ respect to:*nature*validity*obligation*interpretation (even if the place of performance and place of contracting is different)

When law of contracting different from law of performance: law of place of performance governs:

Validity Nature Obligation Effect of the contract

As to construction and validity of contract: law of the place where it is madeWhy: the municipal law of a state is the law of the contract made w/n that state, forms part of it and must govern whenever its performance is sought to be enforced-for the convenience of the courts

Why: parties are presumed to contract with reference to the law of the place where the contract is to be performed, often restricted to situations where a contrary intent or agreement does not appear.

As would be seen from the first issue, the law of contracting is in Canada, because it is here where the agent of Valderama (Splane) perfected the contract with Macmillan

Sale f.o.b. Vancouver: Macmillan was obligated to bring the goods subject of the sale to Vancouver and load the same on the ship which was to take them to RP, at Macmillan's expense - so place of performance in Vancouver

Sale c.i.f. Campomanes Bay, Negros Occidental: >point of view of seller: still in Canada... place of shipping is still considered the place of performance (because this is merely a modified f.o.b.>point of view of buyer: still in Canada…Valderama was to open a L/C payable to Macmillan in Canada, confirmed by Canadian Bank in Vancouver, which may be negotiated by the Canadian Bank of Commerce, Vancouver, B.C. …even if the L/C is to be opened in Manila, the place of the buyer's performance and of shipment is still in Canada so its law would be applied

Questions as to elements + amount of damages procurable for a breach or violation of a duty growing out of a contract: pertain to RIGHT, not a remedy so governed by lex loci contractus

3. Lex loci intentionis-Dicey and Cheshire: intrinsic validity of contract should be governed by the law intended by the parties-LEX LOCI INTENTIONIS: usually expressed in the choice-of-law provision of the contract-why allowed:• A1306, NCC: Contracting parties may stipulate whatever they want as long as not contrary to Ø Law Ø MoralsØ Good customsØ Public orderØ Public policy• Check if A1307 or 1306: as to interpretation of intent of partiesGR: if terms clear, literal meaning will controlX: if terms unclear (words vs. intent): intent would govern - based on contemporaneous and subsequent acts-how to determine INTENT: acts of the parties + surrounding circumstances …assumes that their intentions are in harmony w/ such acts and circumstances*but always assume the assumption that would make the contract VALID

XV. CHOICE OF LAW IN WILLS, SUCCESSION AND ADMINISTRATION OF ESTATES

Will An act whereby a person is permitted with the

formalities prescribed by law to determine to a certain extent the distribution of his estate to take effect after his death.

A. Extrinsic Validity of Wills



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Filipino makes a will abroad Formalities prescribed under Philippine law (lex

nationaliio No express provision in CCo Sen Toletino -since CC A816 allows aliens to

follow Philippine law in solemnities of will when executing wills abroad

Those established by the country where the will is executed (lex celebrationis)

o CCA17 and A815 – lex celebrationis for solemnities of a will

In Re Estate of Johnson(1918)FACTS:Emil Johnson, US citizen died in Manila (residence) leaving a holographic will which was signed by two instead of three witnesses required by sec 618 of the code of Civil Procedure. The will was admitted to probate pursuant to Sec 636 of the Code of Civil Procedure on the ground that the will was in accord with the law of the state of Illinois of which Johnson was at the time his death a citizen ofISSUE:WON Philippine law or Illinois law should applyHELD:The allegation is merely that the testator was a resident of the Philippine Islands. Illinois law should apply because the case should be governed by the national laws of the testator.

Extrinsic Validity of Joint Wills

Filipinos prohibited from making joint wills, either here or abroad (Arts.818-819,CC) bec

o Will is purely personal and unilateralo It’s contrary to revocable character of willo It may expose testator to undue influence and

may even tempt one to kill another.

Joint wills of alien shouldn’t be probated if it affects Filipino heirs

Extrinsic Validity of Holographic Wills

Babcock Templeton v Rider Bobcock(1928)FACTS:

ISSUE:

HELD:

B. Intrinsic Validity of Wills Validity of dispositions, institution of heirs Governed by national law

Cayetano v Leonidas (1984)FACTS:

Adoracion Campos died a citizen of Pennsylvania. In her will her estate was given to her siblings. Her father opposed the probate since it divested him of his legitime.ISSUE:WON father was preteritedHELD:The governing law is Pennsylvania law. The governing law with respect to the intrinsic validity of wills is the national law of the decedent .Pennsylvania law does not have a system of legitimes, thus father was not preterited.

C. Interpretation of Wills Governed by the tules of interpretation of National laws

of the decedent

D. Revocation Outside the Philippines

o Non-domiciliary of Philippines Law of the place where will was

made (lex loci celebrationis) Law of the place where testator is

domiciled (lex domicilii)o Domiliary of Philippines

Law of domicile (lex domicilii) Law of place of revocation (lex loci

actus) Within the Philippines

o In accordance with CC By implication of law By some will, codicil, or other

writing executed as provided in the case of wills

By burnin, tearing, cancelling or obliterating the will with the intention of revoking it by the testator or by some other person in his presence and express direction

CONFLICT OF LAWS Problem: Testator revokes his will in state A where he is

domiciled and then changes his domicile to state B where he dies. But the revocation is valid in State A but invalid in State B. Which law is controlling?

Common law : State B – law of the domicile at the time of death

Civil law (Phil) – State A – law of the place of revocation

E. Probate Essentially procedural, thus forum court applicable Court will look into law of foreign state where suit was

made as to whether extrinsic requirements have been complied with.

A will made in foreign country may be probated in the Philippines after proof that the will was duly executed in the manner required by law and testator had testamentary capacity

If a will was proved and allowed in foreign court it may be allowed by RTC without need to prove due execution and testamentary capacity

Suntay v SuntayFACTS: Silvino Suntay filed a petition for probate of his father’s will which was allegedly executed in china and probated in Amoy District court, but did not adduce evidence that the district court is a probate court and proof of Chinese law on procedure for probate.

ISSUE:



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WON the will should be probatedHELD:In the absence of proof, it may be presumed that Chinese law is the same as ours. Probate being a proceeding in rem and rules on notice must be followed. Since Silvino did not cause the notification of the other heirs, the petition was not granted.

Vda. De Perez v ToleteFACTS:

ISSUE:

HELD:

F. Administration of Estate Title of Domiciliary administrator is of no extraterritorial

force Ancillary administrator is appointed to administer assets

in the state where appoijnted

Tayag v Benguet Consolidated Inc (1968)FACTS:Perkins died, leaving among others shares of stocks in Benguet Corp., which were in the possession of the domiciliary administrator. An ancillary administrator was appointed in the Philippines. ISSUE:Who is entitled to possession of the shares of stocks?HELD:The ancillary administrator because the situs of the stocks is the Philippines where the Corporation is incorporated.

G. Trusts

XVI. CHOICE OF LAW IN TORTS AND CRIMES

Tort French word torquere or twist An act or omission producing injury to another without

any previous existing lawful relation of which the act or omission may be said to be a natural outgrowth or incident.

In Anglo-American law - Includes malice and willful intention contrast with Spanish concept of obligation arising from non-contractual negligence.

CCArt 20&2176 – tortfeasor is one who contrary to law by his act or omission willfully or negligently causes damage to another and shall indemnify the latter for the same

A. POLICIES BEHIND CONFLICTS TORT LAW

1. to deter socially undesirable or wrongful conduct2. to rectify the consequences of the tortious act by

distributing the losses that result from accident and products liability

The Policy behind tort law will most likely be a strongly held policy of the state such that the state will not easily displace its own law with the law of another state.

In determining applicable conflicts torts cases the specific policies behind substantive tort law should be evaluated in light of:

o The needs of the interstate and international systems

o upholding the justified expectations of parties o minimizing the adverse consequences that

might follow from subjecting a party to the law of more than one state

o discouraging forum shoppingo decisional harmony

Conflicts torts cases

o the place of tortious conduct and place of resulting injury are different and one state imposes a higher standard than the other state

o difference in products liability laws and varying judicial interpretations of the extent of liability

Concerned states

o Residence of victims and tortfeasoro Place of business of enterprise

- Effects of the grant/denial of damages is greatly felt

o State where liability creating conduct occurredo State where injury arose

B. LEX LOCI DELICTI COMMISSI Law of the place where the alleged tort was

committed determines the tort liability in matters affecting

conduct and safety difficulty arises when the liability producing

conduct happened in one place but the injuries are sustained in another

Common law o place where the last event necessary to

make an actor liable for an alleged tort o adheres to the vested rights theory so that

if the harm does not take place then the tort is not completed

Civil lawo situs of the tort is the place where the

tortious conduct was committed o the legality of one’s act should be

determined by the law of the state where he is at the time he does such act

Actor liable by lex loci delicti is liable everywhere (vested rights theory)

ALABAMA GREAT SOUTHERN RAILROAD v CARROLL (1892)FACTS:The negligent act of failure to inspect the links attaching the cars occurred in Alabama where recovery is allowed but the defective link broke and injured Carroll in MississippiHELD:For injury inflicted elsewhere than in Alabama our statute gives no right of recovery and the aggrieved party must look to the local law to ascertain what his rights are.

LOUCKS V STANDARDS OIL (1913)FACTS:Wife and children are suing ,in New York, Standard Oil for the death of Loucks who was run down and killed by the latter’s servant in Massachusetts where recovery for such death is allowed.ISSUE:WON Loucks may sue in New York on a tort committed in Massachusetts ,invoking



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HELD:A foreign statute isn’t law in this state, but it gives rise to obligation which, if transitory,” follows the person and may be enforced wherever the person may be found””it is a principle of civilized nations that vested rights are protected”Right of action is property.

C. MODERN THEORIES ON FOREIGN TORT LIABILITY

1. Most Significant Relationship Considers the state’s contacts with the occurrence

and the partieso Contacts such as place of tortious

conduct,domicile,residence

Two fold purpose Identify interested state Evaluate relevance of

these contacts to the issue in question

Does not call for a mechanical counting of contacts, the court localizes the state with the most significant relation ans assesses the transaction in light of the relevant policy considerations of the interested states and their underlying policies

SAUDI ARABIA AIRLINES V CA (1998)FACTS:Morada was employed as an FA by Saudi Airlines. Co-EEs attempted to rape her in Jakarta.She was tricked by SAUDIA officers which led to her conviction. With the assistance of Phil Embassy In Jeddah Saudi Arabian Officers admitted that she was wrongfully convicted. SAUDIA terminated her emoployment. She filed suit based on A19 in RTC Makati. Saudia challenged the court’s jurisdiction

ISSUE:WON RTC Makati has JDWhat is the applicable law

HELD: 1. Yes. a. Based on the allegations in the complaint and in light of

the ROC RTC Makati has jurisdiction of the case. b. Pragmatic considerations such as convenience of

the parties, enforceability of judgment weigh in favor of RTC exercising JD.

2. Philippine law is applicable, a. Traditional approach - considering that the

case is a tort claim the connecting factor is the place of the torious conduct (lex loci actus)

b. State of the most significant relationship the following contacts all poin to the Philipines– place where the injury occurred,domicile nationality and residence of parties, place of relationship

Choice of law problems seek to answer two important questions (1) what legal system should control a given situation where significant facts occurred in two or more states (2)to what extent should the legal system regulate the situation

2. Interest Analysis Considers relevant concerns that state may have in the

case and its interest in having its law applied Determine first the existence of a true or false conflict

o False conflict –only one state is interested in having its law applied and the failure to apply the other state’s law does not impair the policy reflected in that law

o Apparent conflict – more than one state has an apparent interest in applying its law

o True conflict – both states has a real interest in applying their law

3. Caver’s Principle of Preference Deals with rules that sanction some kinds of conduct

engaged in by defendant in one state and extends the benefit of this higher standard of conduct and financial protection to the plaintiff even if the state of injury does not create analogous liabilities Drisco

SCHMIDT V DRISCOLL HOTEL (1957)FACTS:Driscoll hotel(Minnesota)illegally sold liquor to Sorensen (driver of Schmidt). As a result of Sorense’s intoxication, the car turned over in Wisconsin. They sued Driscoll Hotel in Minnesota for the illegal sale which in turn caused the accident.ISSUE:WON Minnesota court has jurisdiction even if the injury occurred in WisconsinHELD:Yes. The restatement should not be applied if the plaintiff will not have a remedy against the liquor dealer. Under the Principle of equity and justice Minnesota law should be applied which provides him with a remedy. All the parties were residents of Minnesota, Driscoll was licensed under Minnesota, the violation of Minnesota law occurred there and the wrongful conduct was committed in Minnesota. The wrongful conduct here was the illegal sale of liquor.

American Contributions to Conflicts Tort Law Determination of whether the law where the tort was

committed or the law of the domicile of the parties is the controlling law

o Law of tort - proper law in questions involving regulation of conduct

o Law of the domicile- governs in matters that relate to loss-distribution or financial protection

D. FOREIGN TORT CLAIMS

Tortious liability is transitoryo Liability resulting from the conduct is deemed

personal to the perpetrator of the wrong and it follows him wherever he may go

o Compensations may be exacted from him in any proper tribunal which may be obtain jurisdiction of the defendant’s person

o Right to sue is not confined to the place where the cause of action arises

An action for tort may be brought wherever the tortfeasor is subject to suit.

1. Conditions for the Enforcement of Tort Claims



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Claims for damages arising from torts committed abroad may be given due course in the forum court if:

o Foreign tort is based on a civil action and not a crime

o Foreign tort is not contrary to the public policy of the forum

o Judicial machinery of forum adequate to satisfy the claim

Defendant in a transanational tort is often used in a foreign court against his will

o There may be a problem of legitimacy of the jurisdiction and validity of the decision.

2. Products Liability of the Foreign Manufacturer

Suits may be based on:o Negligenceo Strict liability in torto Breach of warranty against hidden defects

Typical scenario in a product liability suit:o Plaintiff purchases foreign-made producto Plaintiff ingests product or uses it in its

unaltered condition and suffers injuryo Product liability action brought against the

manufacturer in his home state

ASAHI METAL V SC OF CALIFORNIA (1987)

SummaryAsahi manufactures tire valves incorporated into tires manufactured by a Taiwan company. The tires are then sold all over the world. In the US, a driver in a motorcycle crash sued the Taiwanese company for product liability. A cross complaint was filed by the Taiwanese company against Asahi but eventually a settlement was reached between the driver and the Taiwanese company. Asahi posited the argument that while it knew that the tire valve assemblies would end up throughout the US, it never envisioned that its limited sales to the Taiwanese company would be subject to lawsuits in California.

IssueWON Asahi purposefully established minimum contacts in the US

HeldNOMinimum contacts is based on acts by which the defendant avails itself purposefully of the privilege of conducting business in the state. The substantial connection between the defendant and the forum state must come about by action of the defendant purposefully directed towards the forum state. Putting one’s products in the stream of commerce is not an act directed towards the forum state.

Societe Nationale Industrille Aerospatiale vs. Lee Kuio Helicopter manufactured by Aerospatiale, a

French company, owned by an English company and operated and serviced by a Malaysia company crashed in Brunei and killed a Brunei resident. The widow and administrators brought an action in Brunei against the Malaysian company and Aerospatiale and Aerospatiale’s associated company in Texas.

o It was held that the victim had no connection with Texas and jurisdiction on the Texas company was asserted on the mere fact that Aerospatiale was doing business in that state. It would be oppressive to allow the

plaintiffs to continue with the Texas proceedings as Aerospatiale would not be able to pursue legal proceedings against the Malaysian company.

Bier vs. Mines de Potasse: Dutch gardener operated nurseries near Rotterdam using water from the Rhine river to irrigate his field. He filed an action against a French mining company in Netherlands on the ground that it was discharging pollutants into the river. The court held that he could sue either in France or in Netherlands.

Sovereignty as Basis of Jurisdiction

Jurisdiction is an aspect of sovereigntyo Refers to judicial, legislative, administrative

competence Sovereignty model has been accepted both to:

o Justify any exercise of jurisdiction over a defendant present within the territory, however short (“tag jurisdiction”)

o Deny enforcement of a foreign court judgment over a defendant who was not present within that court’s jurisdiction

WW VOLKSWAGEN CORP V WOODSON (1980)

SummaryRobinsons were New York residents who purchased a car from Volkswagen retailer in New York. They sued the Woklswagen retailer and wholesaler in Oklahoma because of a car accident which occurred in Oklahoma. Volkswagen asserts that the exercise of jurisdiction over them would be violative of limits on state jurisdiction. The Oklahoma court held that personal jurisdiction was authorized by Oklahoma’s long-arm statute. In personam jurisdiction was allowed over the accident in Oklahoma by an act/omission committed outside Oklahoma if the business is done regularly in Oklahoma.

IssueWON Oklahoma court has jurisdiction

ProcedureNOA state may exercise jurisdiction over a nonresident defendant only if there are minimum contacts established in the state. This is to protect the defendant from the burden of litigating in a distant forum and also ensures that states do not reach out beyond the limits imposed upon them.

EAP:- In Asahi, even if there were minimum contacts,

it failed the reasonableness test.- Criticism for Asahi: “Additional acts”

requirement is a reinvention of the stream of commerce law. The fear is that the court might go back to pre-International Shoe standards in jurisdiction.

- In Volkswagen, the only requirements for the exercise of jurisdiction were minimum contacts and the reasonableness test; Asahi did not follow this and included an additional requirement.

3. Alien Tort Act



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Grants US district courts original jurisdiction over any civil action by an alien for tort committed in violation of the law of nations or a treaty of the US.

Can be traced to the perception of the US that its compliance with the law of nations was a fundamental concomitant of Nationhood and the nation’s obligation to comply with a particular legal duty was supplemented by a moral duty.

Compliance with a international duty was for its own interests, namely the stability of commercial relations and national security which, in turn, assured all foreigners that they were under the protection of just laws.

It fulfilled the purpose of recognizing the obligation of every state to the law of nations as a means to avert war and chaos.

HILAO V ESTATE OF MARCOS (1996)

SummaryClass suit for damages brought by more than 10,000 plaintiffs who suffered torture, etc. during the Marcos era. The claim for damages was granted. The Estate of Marcos appealed, arguing that the ATCA does not apply to conduct that occurs abroad and since the acts complained of all occurred in the Philippines thus the court has no jurisdiction.

IssueWON the court has jurisdiction

HeldYESThe subject matter jurisdiction was not inappropriately exercised even though the actions occurred outside the US. Any action against Marcos for torture, disappearance or summary execution was tolled during the martial law period. The principle of command responsibility is well-accepted in US and international law. It is the duty of the commander to control the operations of the members of his command by permitting them to commit atrocities.

FILARTIGA V PENA-IRALA (1980)

SummaryFilartiga was a Paraguayan seeking asylum in the US. He filed an action against fellow Paraguayan Pena-Irala for the death of Filartiga’s son in Paraguay. The action had been commenced in that country but was unsuccessful. The district court dismissed the complaint on the ground of jurisdiction.

IssueWON the US court has jurisdiction

HeldYESThis action is an action by an alien for a tort onlu committed in violation of the law of nations. A wrong is recognized as a violation of the law of natons where the nations of the world habe demonstrated that thte wrong is of mutual and not merely several concerns. Official torture is prohibited by the law of nations. A state or nation has a legitimate interest in the orderly resolution of disputes among those within its orders and where the lex loci delicti commissi is applied, it is an expression of comity to give effec to the laws of the state where the wrong occurred.

Trajano vs. Marcos: In the amicus brief of the US Justice Department, it was advocated that there should be a narrower interpretation of the Alien Tort Statute and should exclude cases between aliens for human

rights violations committed within the aliens’ domestic jurisdiction.

GUINTO V MARCOS (1986)

SummaryGuinto and Suarez are Filipinos who reisde in California. They filed a complaint alleging that their right to free speech was violated by Marcos when they seized and restrained the distribution of the film “100 Days in September.”

IssueWON Marcos could be held liable under the ATCA

HeldNOThe test to determine when a violation of the law of nations has occurred is when there has been a violation by one or more individuals of those standards, rules or customs which a) affect the relationship between states or between an individual and a foreign state and b) used by those states for their common good and/or dealing inter se. A violation fo the right to free speech does not rise to the level of such universally recognized rights as to constitute a violation of the law of nations. The ATCA justifies exercise of court jurisdiction over completely foreign tort cases because of the universal evil exemplified by human rights violations. This is a departure from the prevalent theories applied in determining tort liability since there are no significant contacts between the courts and their parties and events nor substantial state interest in the case other than a general desire for compliance with customary international law. There is a need to establish that the tortuous conduct violated an internationally protected human right.

In Guinto, the court ruled that the protection against the curtailment of free speech has not crystallized into an obligation of state under customary international law.

In Filartiga, it is safe to say that it can be invoked for universal evils such as genocide and slavery.

4. Philippine Rule on Foreign Torts No specific statutory law which governs the

enforcement of claims for damages arising from foreign torts.

Court may give due course to said case assuming that the defendant can be served with summons in the Philippines.

It is suggested that the English rule be followed such that the tort committed abroad is actionable in the country where it was committed and also under Philippine law.

Phillips vs. Eyreo Phillips brought action for damages in

England for false imprisonment caused by Eyre in Jamaica, who was governor at that time.

o Eyre argued that he acted bona fide for the purpose of martial law which was imposed at that time.

o The Court ruled that Eyre was not liable. For the action to be wrong in England:

Should have been actionable if committed in England

Act must not be justifiable by the law of the place where it was done.

TIME INC V REYES ET AL (1971)

Summary



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Libel case by Villegas and Enrile versus Time. Time filed a motion to dismiss on the ground of improper venue. RA 4363 limits the venue of the civil action involving a public officer with an office in Manila to either: a) CFI Manila or b) the city or province where the libelous article was printed and first published. The complaint was filed in the Rizal CFI.

IssueWON the case should be dismissed for improper venue

HeldYESThe libel case cannot prosper because the venue was wrong and the there was an inability to file a criminal case against a non-resident defendant. Venue has been prescribed in the statute and the plaintiffs could not file a case in the place of publication since the magazine was not printed in the Philippines.

If the court had not characterized the issue as jurisdictional and decided the case from a conflicts tort perspective, it could have taken cognizance of the case following the most significant relations approach because of the significant links between the forum and the parties.

EAP: In ordinary foreign tort, the court acquiring jurisdiction

must be either the place of tortuous conduct or place of injury. In ATS, US courts may acquire jurisdiction even if it is neither the place of tortuous conduct nor place of injury.

“law of nations” concept in Filartiga: nations consider the ac to be detrimental to all nations

Guinto: violation of law of nations test – o The violation affects relationship between

states or an individual and a foreign stateo Used by the states for their common good

and/or dealings inter se

E. DISTINGUISHING BETWEEN TORTS AND CRIMES

Tort CrimeTransitory Character LocalLiability deemed personal to the tortfeasor and makes him amenable to the suit in whatever jurisdiction he is found

Where can he be sued?

Perpetrator can be sued only in the state wherein he commits the crime

Injury to individual Who is injured? Injury to state where it is committed

Liability attaches to perpetrator to indemnify the victim for injuries sustained

Purpose Promulgated to punish and reform the perpetrators and deter them and others from violating the law

F. LEX LOCI DELICTI Nullum crimen sine lege principle requires that an act

should have been made punishable by law in order for a person to be punished for committing such an act.

Law in this context has traditionally meant municipal law.

Under the territorial principle, crimes committed within the Philippines by all persons, whether Filipinos or aliens, are prosecuted and penalized under Philippine law. As a rule, criminal laws of a state are effective only upon persons who actually commit the crime within the state’s territory.

Lex loci delicti or the law of place where the crime was committed is the controlling law since it determines the specific law by which the criminal is to be penalized and, at the same time, designates the state that has the jurisdiction to punish him.

Three exceptions to the territorial rule:

1) Crimes committed by state officials, diplomatic representatives and officials of recognized international organizations

The state’s only remedy is to ask for his recall. This is based on the doctrine of sovereign state

immunity from suit since all states are sovereign equals and thus cannot assert jurisdiction over one another.

This, however, is waived when private, commercial and proprietary acts are involved.

Wylie vs. Rarang: American naval officer who commits a crime or tort while discharging his official functions is not covered by the immunity from suit. Moral damages may be recovered since libel is ultra vires and cannot be deemed part of official duty.

LIANG V PEOPLE (2000)

SummaryLiang is an ADB economist and was sued by co-worker Cabal who was allegedly defamed by the former. The MeTC received an office of protocol from the DFA that Liang is immune from legal processes and thus dismissed the case. The RTC overturned the MeTC dismissal and Liang argues he is immune from suit.

IssueWON Liang is immune from suit

HeldNOImmunity only applies to acts done in official capacity. Slander cannot be done in the name of official duty.

2) Crimes committed on board a foreign vessel even if it is within the territorial waters of the coastal state

Proviso: no jurisdiction by Philippine courts as long as the crime does not disturb peace and order

UNCLOS, Art. 27 applieso Criminal jurisdiction of the coastal state not to

be exercised on board a foreign ship passing through territorial waters to arrest any person or conduct investigation except:

Consequences of the crime extend to coastal state

Crime disturbs peace of the country or good order of territorial sea

Assistance of local authorities requested by ship master or diplomatic agent or consular officer of flag state

Measures necessary for suppression of illicit traffic in



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narcotic drugs or psychotropic substances

o No steps may be taken on board a foreign ship passing through territorial sea to arrest or investigate in connection with a crime committed before entry into the territorial sea if the ship only passes through the territorial sea and does not enter internal waters.

US V FOWLER (1901)

SummaryFowler accused of stealing champagne while on board the Lawton. Fowler alleged that the CFI had no jurisdiction to try the crime since it was committed in the high seas.

IssueWON CFI had jurisdiction

HeldNOPhilippine courts were granted jurisdiction over crimes committed in the high seas covering maritime vessels registered in the Philippines. The Lawton was not registered in the Philippines.

PEOPLE V WONG CHENG (1922)

SummaryWong Cheng was charged for smoking opium illegally aboard a ship anchored in Manila Bay.


HeldYESThere are two fundamental rules which could be applicable. The French rule provides that crimes committed aboard foreign ships cannot be prosecuted unless the crime affects peace and order. The English rule provides that such crimes are generally triable in courts within whose territory such crime was committed. The ship was within the 3 mile zone in Manila Bay and was thus already within Philippine territorial jurisdiction.

US V LOOK CHAW (1910)

SummaryInternal revenue agent entered the ship and found opium in its cargo hold. A motion to dismiss was filed on the ground of lack of jurisdiction.


HeldYESThe mere possession of a thing of prohibited use in the Philippines aboard a foreign vessel in transit in any of the ports is not, as a general rule, triable by the courts since the vessel is an extension of the nationality of the country which owns the ship. However this rule no longer applies when the prohibited item is landed in the Philippines.

Fowler Cheng Look ChawFlag US UK UKLocation High seas Within RP

territorial waters

Landed in Cebu port

Crime Theft Smoking opium

Possession of opium

Result No jurisdiction Jurisdiction acquired

Jurisdiction acquired

XVII. CHOICE OF LAW AFFECTING CORPORATIONS AND OTHER JURIDICAL ENTITIES

A. CORPORATIONS

1. Personal Law of a Corporation

GENERAL RULE: Law of the place of incorporation Personal law of the corporation governs the following issues:

1. existence and the legal character of the corporation2. capacity and powers of the corporation3. internal organization of the corporate enterprise

alteration of the charter and the dissolution of the corporation

ME GRAY V INSULAR LUMBER CO (1939)FACTS: Insular Lumber is a corp. organized and existing under the

laws of New York, and is licensed to do business in the Philippines.

ME Gray owns 57 shares of capital stock, but said 57 shares do not comprise 3 percent of the total stock of the corp. Nor does he represent stockholders who collectively own 3 percent.

Gray was asking the officers of Insular to allow him to examine their books and records. The officers did not allow him to do so.

HELD: Under NY law, the right of a stockholder to examine the

books and records is limited, and the law requires ownership of at least 3 percent of the stocks.

Being a NY corp., the limitation applies to Insular Lumber. Under common law however, he is entitled to examine the

books, subject to the discretion of the court, under certain conditions:

o Inspection for an honest purpose, or to protect his interests as stockholder.

o Right to examine is exercised in good faith, and not to satisfy curiosity or any speculative/ vexatious purposes.

Gray failed to allege any of the conditions.

BANK OF AUGUSTA V EARLE (1839)FACTS Bank of Augusta incorporated in Georgia and conferred the

usual powers which included the purchase of bills of exchange.

Bill sued upon was made and endorsed by its agent Thomas MGran. These funds were derived from bills and notes discounted in Georgia and payable in Alabama.

MGran purchased bills from Earle in Alabama. TC ruled in Earle’s favor, holding that a bank incorporated by

laws of Georgia could not lawfully exercise its powers in Alabama, and thus the contract for the bill was void and did not bind the parties to payment thereof.

ISSUE: WON the contract for the bill obtained in Alabama was valid in relation to a corporation under the laws of Georgia.

HELD: Case made reference to principle of comity.



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According to English laws, the right of a foreign corporation to sue in its courts has been recognized.

By the law of comity among nations, a corporation created by one sovereignty is permitted to make contracts in another, and to sue in its courts. As per Alabama law, the corporation of another State may sue in its courts; and the decision is put directly on the ground of national comity.

There is no law of the State which attempts to define the rights of foreign corporations.

Theories drawn from this case:o A corp., being a creature of law, has no legal

status beyond the bounds of the sovereignty within which it was created;

o Corp. cannot exercise powers NOT granted by its charter or by the laws of the state of incorporation;

o No state is under any obligation to adhere to comity; every state has the power to refuse to recognize or prevent the foreign corp. from acting within its jurisdiction;

o A state is not obliged to grant to a foreign corporation the privileges and immunities common to the citizen of the state.

State may impose any term it may desire as a prerequisite to admission. However, the rule is not absolute and is subject to the exception of:

o commerce clause (which prohibits a state from imposing conditions on corporations engaged in interstate commercial activities and provides the basis of federal power to regulate interstate commerce).

o Unconstitutional conditions - forbids a state from requiring the foreign corporation to give up its constitutional rights either as a prerequisite to allowing it to do business or to avoid being removed from that state.

2. Exceptions to the Rule of Incorporation Test

a. Constitutional and Statutory Restrictions

Constitutional and statutory restrictions (Art. XII, 1987 Constitution)

A state may by legislation exclude a foreign corporation altogether, subject to constitutional limitations, or prescribe any conditions it may see fit as a prerequisite to the corporation’s right to do business within its territory.

PALTING V SAN JOSE PETROLEUM (1966)FACTS

San Jose Petroleum filed with the SEC a sworn registration statement for the registration and licensing for sale in the Philippines Voting Trust Certificates.

Palting and others, who were prospective investors in the shares of SJ Petrol, opposed in the SEC the licensing of said securities, on the ground that the tie-up between SJ Petrol and SJ Oil violates the Constitution.

Consti provides that utilization, exploitation and development of natural resources of the Philippines is granted to Filipino citizens or corp, or corporations or associations 60% of the capital of which is owned by citizens. This is in conjunction with the Parity Amendment, which extends the said privilege to American citizens or corporations.

ISSUE: WON SJ Petrol is an American enterprise entitled to parity rights.

HELD: NO IT IS NOT! It is not owned by citizens of the US, because SJ Petrol is

owned by OIL INVESTMENTS, a Panamanian corporation. OIL INVESTMENTS is not owned by Americans, as it is

owned by two foreign Venezuelan corporations (PANTEPEC and PANCOASTAL).

Even if the stockholders of PANCOASTAL resided in the US, It wasn’t established that they were citizens of the US.

There is no showing of comity between Venezuela and Philippines.

Lastly, there must be a limit to the extent of interpreting the word “indirectly”. The ownership of the corporation cannot be traced ad infinitum for the purpose of determining American ownership.

Control Test during War - Courts may pierce the veil of corporate identity and look into the nationality of the stockholders to determine the citizenship of the corporation.

FILIPINAS COMPANIA V CHRISTERN (1951)SFACTS

Christern obtained from Filipinas fire insurance covering merchandise in a building in Binondo (October 1, 1941). The building the merchandise were razed during the Japanese occupation.

Christern submitted its claim under the policy, but Filipinas refused to pay on the ground that the policy in favor of Christern had ceased to be in force when the US declared war against Germany (December 10, 1941; Cistern was controlled by German subjects).

HELD Since majority of the stockholders of Cistern were

Germans, the respondent became an enemy corporation upon the outbreak of the war between US and Germany.

An “enemy” covers corporations not only incorporated under the laws of an enemy country, but because it was controlled by enemies.

The Insurance Law provides that “anyone except a public enemy may be insured.” Thus, an insurance policy ceases to be allowable as soon as an insured becomes a public enemy.

While Christern is not entitled to any indemnity, equity requires that the premium paid by the respondent for the period covered should be reimbursed.

EAP: A company itself if incapable of loyalty or enmity. The qualities of enmity or amity are attributable only to human beings. It was concluded that the company had the predominant character of its shareholders (Daimler Co. v. Continental Tire).

3. Domicile or Residence of Foreign Corporations

fixed by the law creating them; or if not so fixed, the place where their legal

representation is or where they exercise their principal functions. (Art. 51, CC)

A foreign corp. that has been granted license to operate in the Philippines acquires domicile.

A foreign corporation granted license to operate in the Philippines acquires domicile here.STATE INVESTMENT HOUSE V CITIBANK (1991)



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FACTS Bank of America, Citibank NA and HSBC filed with the

Rizal CFI a petition for involuntary solvency of Consolidated Mine, Inc.

Petition was opposed by State Investment House (SIH) and State Financing Center (SFC) claiming that the court had no jurisdiction to take cognizance of the petition for insolvency because petitioner banks are not resident creditors in contemplation of the Insolvency law.

TC rendered summary judgment dismissing the petition. CA reversed TC.

ISSUE: WON these Philippine branches or units may be considered “residents of the Philippine islands.”

HELD: Case referred to various statutes to define “resident

foreign corporation” (NIRC, General Banking Act, Offshore Banking Law.

Court itself held that a foreign corporation licitly doing business in the Philippines, which is a defendant in a civil suit, MAY NOT BE considered a non-resident within the scope of the legal provision authorizing attachment against a defendant not residing in the Philippines.

The assimilation of foreign corporations authorized to do business in the Philippines “to the status of domestic corporations” subsumes their being found and operating as corporations, hence, residing, in the country.

IT IS NOT THE GRANT OF A LICENSE TO A FOREIGN CORPORATION TO DO BUSINESS IN THIS COUNTRY THAT MAKES IT A RESIDENT; the license merely gives legitimacy to its doing business here.

What effectively makes a foreign corp. a resident corporation in the Philippines is its ACTUALLY BEING IN THE PHILIPPINES and licitly doing business here.

Necessary element: LOCALITY OF EXISTENCE.

4. Jurisdiction over Foreign Corporations

All foreign corporations lawfully doing business here in the Philippines shall be bound by all laws and rules and regulations applicable to domestic corporations except provisions for the creation, formation, organization or dissolution of corporations or liabilities, responsibilities or duties of stockholders, members or officers of the corporation to each other.Service of summons upon foreign corporations doing business in the Philippines may be made:a. on its resident agentb. in the absence thereof, on the government official

designated by law or any of its officers or agents within the Philippines

c. on any officer or agent of said corporation in the Philippinesd. by serving summons through diplomatic channels.

5. Right of Foreign Corporations to Bring Suit

General Rule: license to do business in the Philippines required so Court can acquire jurisdiction over foreign corporations.Exceptions:1. isolated transactions2. action to protect trademark, trade name, goodwill,

patent or for unfair competition3. agreements fully transacted outside the Philippines

4. petition filed is merely corollary defense in a suit against the corporation

EFFECT OF FAILURE TO SECURE A LICENSE TO TRANSACT BUISNESS The foreign corporation has no right to sue in the Philippines

but it can still be sued. Although the contracts entered into may be valid as between

the parties, it may not be enforced in the Philippine courts.

HOME INSURANCE CO V EASTERN SHIPPING (1983)FACTS

Case involves claims against Eastern Shipping Lines for payments made by Home Insurance to consignees in the Philippines.

Home Insurance filed suits for recovery of a sum of money, but lower courts dismissed the complaint on the ground that plaintiff had failed to prove its capacity to sue. At the time the contracts were made, Home had not yet secured the necessary license to do business in the Philippines.

ISSUE: WON Home Insurance was able to claim a license.

HELD When the complaints in these two cases were filed, the

petitioner had already secured the necessary license to conduct its insurance business. Thus, it could already file suits.

The contracts are enforceable DISTINCTION BETWEEN:

o Denial of right to take remedial action (when there is no license to do business in the country)

o Penal sanction for non-registration. Lack of capacity at the time of the execution of the

contracts was cured by the subsequent registration.

ATLANTIC MUTUAL INSURANCE V CEBU STEVEDORING (1966)FACTS

Atlantic Mutual and Continental Insurance are both foreign corp. existing under the laws of the US. They sued Cebu Stevedoring for recovery of sum of money.

Plaintiffs, as subrogees to the shipper and consignee, demanded settlement from defendant by reason of its failure to comply with its obligation. Cebu Stevedoring moved to dismiss on the ground that plaintiffs had no legal personality to appear before Philippine courts and had no capacity to sue.

HELD If a foreign corp. is not doing business here it is not

barred from seeking redress in our courts in proper cases, as when it sues on an isolated on an isolated transaction, even if it has not obtained a license.

If the transaction sued upon is singular and isolated, no such license is required.

6. Exceptions to the License Requirement

a. Isolated Transactions- one which is occasional, incidental, and casual, not of a character to indicate a purpose to engage in business.- There must be continuity of conduct and intention on the part of the foreign to establish a continuous business within the state.



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EASTBOARD NAVIGATION V YSMAEL & CO (1957)FACTS

Eastboard Navigation of Toronto, Canada agreed to charter its vessel to defendant Juan Ysmael & Co. to load cargo in the Philippines for Buenos Aires.

One of the clauses provide that “it is mutually agreed that should any dispute arise between the owners and charterers, the matter in dispute shall be referred to three persons at New York for arbitration, and their decision, or that any of them, shall be final.”

Dispute over payment was submitted for arbitration, and a decision ordered Ysmael to pay Eastboard. Decision was confirmed by US District Court.

Eastboard brought present action to enforce the said Order. Ysmael in his answer, alleged that NY court had no jurisdiction over the defendant.

ISSUE: WON Philippine court has jurisdiction over the defendant to be able to enforce the arbitration order.

HELD: While plaintiff is a foreign corp. without license to

transact business in the Philippines, it does not follow that it has no capacity to bring the present action. The license is not necessary because it is NOT engaged in business in the Philippines.

In this case, the transaction involved is the first business undertaken by plaintiff in the Philippines. On a previous occasion, Eastboard’s vessel was chartered by National Rice to import rice to the Philippines; however, this isolate transaction DO NOT constitute engaging business in the Philippines.

b. Action to Protect Trademark. Trade Name, Goodwill, Patent or for Unfair Competition

- A foreign corporation may file a complaint for unfair competition, it essentially being a suit enjoining unfair traders from pursuing unlawful competition and in order to allow the aggrieved party to recover damages.

- BASIS: equity.

LEVITON INDUSTRIES V SALVADOR (1982) FACTS Respondent Leviton Manufacturing Inc. (LMI) is a foreign

corp. organized and existing under the laws of New York. It is the largest manufacturer of electrical wiring devices in the US under the trademark Leviton, and has imported to the Philippines various electrical wiring devices.

LMI filed a complaint before Rizal CFI for unfair competition against Leviton Industries (LI), a partnership organized and existing under laws of the Philippines. LI manufactured electrical devices under the trademark Leviton, causing confusion in the minds of consumers.

LI moved to dismiss the complaint alleging LMI failed to allege its capacity to sue.

ISSUE: WON LMI can sue in the Philippines.

HELD: NO! LMI failed to allege the essential facts bearing upon its

capacity to sue before Philippine courts. BUT, LMI’s action is based on Sec. 21-A of RA 166, that a

foreign corporation (whose mark or name is registered under this act) may bring an action for infringement, unfair competition, whether or not it has been licensed to do business in the Philippines. The country of which the foreign corporation is a citizen or is domiciled, by treaty, convention

or law grants a similar privilege to juristic persons of the Philippines.

Under the old law are two requirements:o Registration of the mark in the Philippines;o Comity

All that was alleged in LMI’s complaint was that it was a foreign corp. Rules of Court require that facts showing the capacity of a party to sue must be averred.

EAP: presently, registration in the Philippines of names and marks sought to be protected is no longer required for an action of unfair competition to prosper.

c. Agreements Fully Transacted Outside the Philippines

HANG LUNG BANK V SAULOG (1991)FACTS Petitioner Hang Lung Bank which was not doing business in

the Philippines, entered into 2 continuing guarantee agreements with Cordova Chin San in Hong Kong. The Latter undertook to pay on demand all sums of money which may due the bank from Worlder Enterprises.

Worlder Enterprises defaulted in its payment. Hang Lung filed with the Supreme Court of HK a collection suit against Worlder and Chin San. Both defendants were served with summons, but they failed to respond thereto. SC issued a judgment ordering the two to pay the plaintiff.

Hang Lung sent a demand letter to Chin San at his Philippines address, but no response was made. Hang Lung filed with the Makati RTC an action for enforcement of its claim against Chin San. Chin San raised as an affirmative defense lack of cause of action, incapacity to sue.

HELD: The General Banking Act on which Chin San relies is

misleading in that it seems to require a foreign corporation, including a foreign bank or banking corporation, not licensed to do business and not doing business in the Philippines, to secure a license from the SEC before it can bring or maintain an action in Philippine Courts.

In this case, since Hang Lung was not doing business in the Philippines, it may not be denied the privilege of pursuing its claims against private respondent for a contract which was entered into and consummated outside the Philippines.

POLICY: avoid hampering the growth and development of business relations between Filipino citizens and foreign nationals.

d. Petition Filed is Merely a Corollary Defense in a Suit against it.

- filing a counterclaim by a Philippine corporation does not constitute an implied recognition of the foreign corporation’s legal capacity. In a counterclaim, the plaintiff in the main (the foreign corporation) case becomes the defendant.

PHIL COLUMBIA ENTERPRISES V LANTIN (1971)FACTS Katoh is a corporation organized and existing under the

laws of Japan. It filed a complaint against Philippine Columbia Enterprises alleging ten causes of action for the collection of payment arising from a shipping transaction. Columbia moved to dismiss on the ground that Katoh had no legal capacity to sue.

TC deferred determination of the motion until the trial of the case on the merits. Columbia objects to the deferment on the ground that if they file a counterclaim against respondent foreign corporation, they would be recognizing the legal



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capacity of said corporation, which they are precisely questioning.

HELD: Actions by foreign corporations are governed by rules

different from those in action against them. Counterclaim partakes of the nature of a complaint and/or

cause of action against the plaintiff, so that if the petitioners-defendants should file a counterclaim, Katoh would be a defendant thereto, in which case the said foreign corporation would not be maintaining a suit, and the Corporation Law would not apply.

7. Definition and Scope of “Transacting Business”- a corporation can do business in a state or country other than that in which it was created, with the express or implied consent of that country or state.

EXCEPT:1. Where it is prohibited by express statutory authority or

constitutional enactment;2. Where it is seeking to perform acts which are contrary to the

public policy of the state;3. Where it is seeking to exercise extraordinary and special

franchises;4. Where it is seeking to perform acts which are not authorized

by the law of the state of its incorporation.

DOING BUSINESS:a) Soliciting ordersb) Service contractsc) Opening offices, whether liaisons or branchesd) Appointing representatives or distributors operating under

full control of the foreign corporation domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling 180 days or more.

e) Participating in the management, supervision and control of any domestic business, firm, entity or corporation in the Philippines

f) Any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplates to that extent that performance of acts and works, or the exercise of some of the functions normally incident to and in progressive prosecution of commercial gain or of the purpose of object of the business organization.

NOT DOING BUSINESS:a) Mere investment as a shareholder by a foreign entity in

domestic corporations duly registered to do business, and/or exercise of rights as such investor.

b) Having a nominee director or officer to represent its interest in such corporation

c) Appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account.

COURT: no general rule or governing principle laid down as to what constitutes “doing” or “engaging in” or “transacting” business in the Philippines. Each must be judged in the light of its peculiar circumstances.

WANG LABORATORIES V MENDOZA (1987)FACTS Wang Labs Inc (WLI) is a corporation organized under US

laws, doing business in Massachusetts, and engaged in manufacturing and selling computers worldwide.

It sells its products to its exclusive distributor, Exxbyte (ETC), a domestic corporation.

ACCRA Law entered into a contract with ETC for acquisition of computer systems. It was not fully implemented, and the firm sued for breach of contract with damages against WLI.

WLI filed a motion to dismiss on ground of improper service of summons, thus lack of jurisdiction over WLI.

HELD: WLI cannot unilaterally declare that it is not doing business

in the Philippines. It has installed different products in several corporations in the Philippines since 1976, and registered its name with the Philippine Patent Office.

Where a single act or transaction of a foreign corporation is not merely INCIDENTAL or CASUAL but is of such character as distinctly to indicate a purpose to do other business in the State, such act constitutes doing business.

In any event, it has been categorically stated that although a foreign corporation is NOT DOING business in the Philippines, it may be sued for acts done against persons in the Philippines.

Also, the fact that WLI alleged non-jurisdictional grounds in its pleadings indicate that it has waived lack of jurisdiction of the court.

CIR V JAPAN AIRLINES (1991)FACTS Japan Air Lines Inc (JAL) is a foreign corporation. It did not

have planes in the Philippines, as it had not been granted by the CAB a certificate of public convenience.

JAL had an office in Manila maintained merely to promote the company’s public relations (it did NOT sell tickets).

JAL constituted PAL as its general sales agent in the Philippines. PAL sold for and in behalf of JAL plane tickets and cargo reservations.

Action was brought by CIR for deficiency taxes for income derived from Philippine sources.

ISSUE: WON JAL was doing business in the Philippines for purposes of taxation.

HELD: For the source of income to be considered as coming from

the Philippines, it is sufficient that the income is derived from activities within this country regardless of the absence of flight operations within Philippine territory.

1977 TAX CODE: resident foreign corporation applies to a foreign corporation engaged in trade or business within the Philippines or having an office or place of business therein.

There is no specific criterion as to what constitutes ‘doing’ or ‘engaging in’ or transacting business. Each case must be judged in the light of its peculiar environmental circumstances.

There being no dispute that JAL constituted PAL as local agent to sell its airline tickets, there can be no conclusion other than that JAL is a resident foreign corporation, doing business in the Philippines. The sale of tickets is the very lifeblood of the airline business.

In this case, the activity was related to the nature of the business in determining whether or not the company was doing business.

MERRILL LYNCH FUTURES V CA (1992)FACTS Merrill Lynch Futures Inc (MLFI) is a NON-RESIDENT

corporation NOT DOING business in the Philippines and duly organized and existing under the laws of Delaware.

It entered into a Futures Customer Agreement with Lara spouses.



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Orders were transmitted to MLFI by Lara spouses through Merrill Lynch Philippines Inc., a Philippine corp. servicing MLFI’s customers.

Lara spouses became indebted to MLFI, which the latter claimed from the Laras. The Laras refused on the ground that the transactions were null and void, because Merrill Lynch Philippines had no license to operate as a commodity or financial futures broker.

MLFI filed a complaint with the QC RTC for recovery of said debt. Laras moved to dismiss on the ground that MLFI had been doing business in the Philippines, hence MLFI is prohibited by law to maintain or intervene in any action. Laras alleged they were not aware Merrill Lynch Philippines had no license to do business in this country.

HELD: Court was satisfied that MLFI, operating in the US, had

indeed done business with the Lara spouses in the Philippines. MLFI did deal with futures contracts in exchanges in the US in behalf and for the account of the Laras, and that on several occasions the latter received account documents and money in connection with those transactions.

Party is stopped to challenge the personality of a corporation after having acknowledged the same by entering into a contract with it. The principle will be applied to prevent a person contracting with a foreign corporation from later taking advantage of its noncompliance with the statutes.

EAP: In this case the spouses were stopped from questioning MLFI’s capacity. Current trend is toward estoppel.

BUT, she thinks in pari delicto is more equitable, which would prevent both parties from claiming from each other, being both at fault.

GRANGER V MICROWAVE SYSTEMS (1990)FACTS Granger Associates, organized in the US, has no license to

do business in the country. It sued Microwave Systems Inc. (MSI) for recovery of a sum allegedly due to the petitioner.

Claim arose from agreements between the parties, one under which Granger licensed MSI to manufacture and sell its products in the Philippines and extended to the latter certain loans, equipment and parts.

MSI alleged that plaintiff had no capacity to sue, being an unlicensed foreign corporation, and moved to dismiss. TC granted MTD. CA affirmed. Granger now argues that MSI failed to prove Granger was transacting business in the Philippines.

ISSUE: WON the transaction is isolated, exempting it from the license requirement.

HELD: It is clear that the contracts between the parties established

within our country a continuous business, and not merely one of a temporary character. The agreements did NOT constitute only one isolated transaction, as the petitioner contends, but a succession of acts signifying the intent of Granger to extend its operations in the Philippines.

The doing of a single act does not constitute business within the meaning of statutes prescribing the conditions to be complied with by foreign corporations.

o BUT: a single act may bring the corporation within the purview of the statute where it is an act of the ordinary business of the corporation.

o The single act or transaction is not merely incidental or casual, but is of such character as

distinctly to indicate a purpose on the part of the foreign corporation to do other business in the state.

The purpose of the rule requiring foreign corporations to secure a license to do business in the Philippines is to enable us to exercise jurisdiction over them for the regulation of their activities in this country.

If a foreign corporation operates in the Philippines w/o submitting to our laws, it is only just that it not be allowed to invoke them in our courts when it should need them later for its own protection.

PART FIVE – FOREIGN JUDGMENTS

XVIII. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

A. DISTINCTION BETWEEN RECOGNITION AND ENFORCEMENTRECOGNITION OF FOREIGN JUDGMENT

Passive act of giving the same effect that it has in the State where it was rendered with respect to the parties, the subject matter of the action and the issues involved without the necessity of filing an action in the forum giving effect to the judgment.

Examples of foreign judgments which can only be recognized: declaratory judgments, judgments which give no affirmative relief, judgments which determine the parties’ interests in a thing or status.

ENFORCEMENT OF A FOREIGN JUDGMENT A foreign judgment is enforced when, in addition to being

recognized, a party is given affirmative relief to which the judgment entitles him and it necessarily requires the filing of an action.

This necessarily implies recognition.

B. BASES OF RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

1. COMITY - requires reciprocity between the concerned jurisdictions

2. DOCTRINE OF OBLIGATION -foreign judgment of a court of competent jurisdiction imposes a duty on the losing litigant- based on the vested rights theory

C. POLICIES UNDERLYING RECOGNITION AND ENFORCEMENT

The policy of preclusion seeks to protect party expectations resulting from previous litigation, to safeguard against the harassment of defendants, to insure that the task of courts not be increased by never-ending litigation of the same disputes, and – in a larger sense – to promote what Lord Coke in the Ferrer’s Case of 1599 stated to be the goal of all law: “rest and quietness.”

RELATED CONCEPTS1. Res judicata: once there is a final judgment, resolution on

the issues litigated is binding on the parties and their privies2. Merger: Plaintiff’s cause of action is merged in the

judgment so that he may not relitigate that exact claim



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3. Bar: successful defendant can interpose as a defense the judgment in his favor to avert a 2nd action by the plaintiff on the same claim

4. Direct estoppel: relitigation of all matters decided are precluded

5. Indirect estoppel: all essential issues of fact actually litigated cannot be relitigated

D. REQUISITES FOR RECOGNITION OR ENFORCEMENT1. Foreign judgment was rendered by a judicial or quasi-judicial tribunal which had jurisdiction over the parties and the case in the proper judicial proceedings

2. Judgment must be valid under the laws of the court that rendered it.

3. Judgment must be final and executory to constitute res judicata in another action.

4. State where the foreign judgment was obtained allows recognition or enforcement of Philippine judgments.

5. Judgment must be for a fixed sum of money.

6. Foreign judgment must not be contrary to the public policy or good morals of the country where it is to be enforced.

7. Judgment must not have been obtained by fraud, collusion, mistake of fact or mistake of law.

Rule 39.48, ROC In an action in rem: the foreign judgment is deemed

conclusive upon the title to the thing, In an action in personam, the foreign judgment is

presumptive, and not conclusive, of a right as between the parties and their successors in interest by a subsequent title.

However, in both cases, the foreign judgment is susceptible to impeachment in our local courts on the grounds of: want of jurisdiction want of notice to the party collusion fraud clear mistake of law or fact

It has been recognized that “public policy” as a defense to the recognition of judgments serves as an umbrella for a variety of concerns in international practice which may lead to a denial of recognition. (Mijares v. Ranada, 2005)

E. GROUNDS FOR NON-RECOGNITION1. According to Uniform Money Judgment Recognition Act of the US, a foreign judgment need not be recognized if:

MANDATORY(1) Defendant in the proceedings did not receive notice of the proceedings in sufficient time to be able to defend himself;(2) Judgment obtained by FRAUD;(3) Lack of jurisdiction over SUBJECT MATTER by foreign court;DISCRETIONARY (1) Foreign judgment conflicts with another final and conclusive judgment(2) Proceeding in the foreign country was contrary to an agreement of the parties under which the dispute in question settled otherwise than the proceeding in that court;(3) Doctrine of forum non conveniens, in the case of jurisdiction based only on personal service (to further restrain the use of “presence” as cornerstone for exercise of jurisdiction)

2. In many Hague Conventions, other grounds include:(1) Violation of the ordre public of the recognizing state(2) Failure to comply with due process requirements

F. MODERN DEVELOPMENTS IN ENFORCEMENT OF FOREIGN JUDGMENTS

1. Hague Conference on Private International Law Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters> applicable regardless of nationality of the parties> non-refusal provision on the ground solely that the State of origin applied a law other than the rules that would have applicable according to PRIL rules of the state addressed

2. EEC Convention of 1968> for civil and commercial matters

3. Uniform Foreign Money-Judgments Recognition Act> applicable to any foreign country judgment that is final and conclusive and enforceable when rendered even though an appeal is pending or it is subject to appeal.

G. PROCEDURE FOR ENFORCEMENT1. SUMMARY PROCEEDING

Followed in most civil law countries Validation proceeding:

authenticated copy of foreign judgment validated by clerk of court

2. JUDGMENT REGISTRATION Authenticated copy filed in the registrar’s office with the

proofs required

3. PETITION Followed in common law countries and in the

Philippines The rules are silent as to what initiatory procedure must

be undertaken in order to enforce a foreign judgment in the Philippines. But there is no question that the filing of a civil complaint is an appropriate measure for such purpose.

conflicts finals reviewer 2009-10a

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