Conflicts

COURSE OUTLINE IN CONFLICTS OF LAWBy: Atty. Enrique V. dela Cruz, Jr.

CONFLICTS OF LAW

By: Atty. Enrique V. dela Cruz, Jr.1

PART ONE: INTRODUCTION

I. Scope and Conflict of Laws: Nature, Defi-nition and Importance

A. Diversity of Laws, Customs and Practices

PRIL: that part of municipal law which cov-ers cases with a foreign element.

Hilton vs. Guyot(1895)

FACTS: Defendants were sued in France, and the French court rendered judgment against them. Plaintiffs sued defendants on the French judgment in the US. The US court held the French judgment con-clusive.

HELD: No law has any effect, of its own force, beyond the limits of the sovereignty form which its authority is derived. The extent to which the law of one nation, as put in force within its terri-tory xxx shall be allowed to operate within the dominion of another nation, depends upon xxx “the comity of na-tions.”

Comity of nations is the recognition which one nation allows within its terri-

1 Atty. Dela Cruz is an MCLE lecturer and a Bar Re-viewer at the Jurist Bar Review Center and the Cos-mopolitan Review Center. He teaches law at UST, FEU and the Bulacan State University. He obtained his Master of Laws (with Distinction) from the London Metropolitan University, and a Postgraduate Diploma in International Trade Law from the University Col-lege London (UCL), U.K., both as a Chevening scholar of the British government. He completed a Postgradu-ate Fellowship on Leadership and International Rela-tions from the John F. Kennedy School of Government, Harvard University, USA. He also holds a Masters in Public Management degree from the Ateneo School of Government. He obtained his Bachelor of Laws de-gree (with honors) and an AB Legal Management de-gree (cum laude) from the University of Santo Tomas as a Rector’s Scholar. He is on his 3rd term as an elected Councilor of Baliuag, Bulacan and the current Vice-President (Luzon) of the Philippine Councilors League. He is also a Partner at the Ponce Enrile Reyes & Manalastas (PECABAR) Law Office in Makati City.

tory to the legislative, executive or judi-cial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.

The reasonable, if not necessary conclu-sion appears to us to be that judgments rendered in France, or in any other for-eign country, by the laws of which our own judgments are reviewable upon the merits, are not entitled to full credit and conclusive effect when sued upon in this country, but are prima facie evidence only of the justice of the plaintiff’s claim.

B. Definition

Second Edition of Jurisprudence: private in-ternational law is that part of the law of each state or nation which determines whether, in dealing with a legal situation, the law of some other state or nation will be recognized, given effect or applied.

Distinguished from Public International Law and other disciplines:

Public International Law

Private International Law

Principally governs states in their rela-tionships amongst themselves

Principally governs individuals in their private transactions which involves a for-eign element

As to sources of law:

Codified in Art. 38 of the Statute of Inter-national Court of Jus-tice

Generally derived from the internal law of each state and not from any “interna-tional” law extrane-ous to municipal law

As to persons involved:

Governs only states and internationally-recognized organiza-tions

Governs individuals or corporations

As to transactions:

Involves state-to- Relates to private

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state or government-to-government mat-ters

transactions be-tween individuals

As to remedies:

In case of violation, a state may resort to 1) diplomatic protest2) peaceful means of settlement (diplo-matic negotiations, arbitration or concili-ation)3) adjudication by fil-ing a case before in-ternational tribunals4) use force short of war, or eventually go to war

All the remedies are provided by munici-pal laws of the state, such as resort to courts or administra-tive tribunals

C. Object, Function and Scope

Object and Function of Conflict of Laws: to provide rational and valid rules or guide-lines in deciding cases where the parties, events or transactions are linked to more than one JD.

Conflict of law rules aim to promote stabil-ity and uniformity of solutions provided by the laws and courts of each state called upon to decide conflicts cases.

Scope: covers the entire range of laws as it cuts across the subjects of JD of local courts or tribunals, the law on evidence or proof of foreign law, the personal law of in-dividuals and juridical entities, naturaliza-tion law, laws on domicile and residence, family relations, contracts, torts, crimes, corporation law and property law.

3 Issues in Conflict of Laws:

1) Issue of adjudicatory JD: determines the circumstances that allow for a legal order to impose upon its judiciary the task of de-ciding multi-state and multinational dis-putes

2) Issue of choice-of-law: refers to the prob-able sources from which the applicable law of the controversy may be derived

3) Recognition and enforcement of foreign judgments: study of situations which justify recognition by the forum court of a judg-

ment rendered by a foreign court or the en-forcement of such within the forum

II. A Brief History and Development of Con-flict of Laws

A. Roman Law

♦ Ius gentium In PIL, it means the law of nationsIt is used in the early Roman em-

pire to mean the body of rules devel-oped by the praetor peregrinus to re-solve disputes between foreigners or between foreigners and Roman citizens

It includes Greek legal doctrines and concept of bona fides as ius civile only applies t Roman citizens

♦ Italian City StatesThe rise of this city states

prompted intensive study of conflict of laws

- Bartolus: Father of Conflict of Laws; formulated Theory of Statutes

Because Northern Italy was divided into several city states each having their own laws on private matters, the “Statute” was applied to problems of choice of law.

Statute is classified into:a. real – applied to immovable

property within the stateb. personal – followed the person

even outside the domicile and governed questions on per-sonal status, capacity and movables

c. mixed – contracts, if entered into by the different nationals

♦ 16th century, France

Charles Dumoulin – advocated a method to determine what law would govern contracts between different na-tionals

Bertrand D’Argentre – formulated the principle of universal succession fol-lowed in the Spanish Civil Code and adopted in the Phil. Civil Code

♦ Netherlands

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Ulrich Huber – first used the term, con-flict of laws

Dutch jurists asserted that State has no obligation to apply a foreign law unless imposed by treaty, by comitas gentium or on consideration of courtesy and ex-pediency.

Dutch jurists led by Huber developed territorial principle where the laws of every state may operate only within its territorial limit but such sovereign state may recognize that a law, which oper-ated in the country of its origin, shall retain force everywhere provided that it will not prejudice its subjects.

Comitas Gentium was readily accepted because of increasing international transactions.

Ius Commune, applied by Italian and French jurists, was a supranational law based on Roman law and which be-came the continental European com-mon law.

Nations codified their national laws which included conflict of laws provi-sions.

Ex. French Civil Code of 1804

- became the pattern for Civil Codes of Spain, Belgium and Romania

- nationality law principle (con-tained in Art. 15 of our CC) was provided in Art. 3 of the French Code

♦ 19th Century

Justice Joseph Story – relied on the Eu-ropean continental theorists’ concept of territorial sovereignty and founded conflict of laws on the principle of comity of nations.

Frederich Carl Von Savigny- founder of modern private IL -application of foreign law was not due to comity but the resultant benefits for everyone concerned- advocated situs theory (seat of legal relationship): every ele-

ment of transaction be governed by the law of the place with which said element has the most substantive

connection

Pascuale Mancini

- advanced nationality theory in matters concerning status, capac-ity and private interests of the in-dividual

B. Modern Developments

♦ Neo-Statutists

- followed Italian theory: when 2 or more independent laws are appli-cable to a Conflict problem, the method so devised determines what law shall prevail

♦ Internationalists

- there should be a single body of rules that can solve problems in-volving a foreign element

♦ Territorialists

- law of the State applies to per-sons and things within the State, therefore, no foreign law is ap-plied.

- Branch: only rights vested or ac-quired under foreign law are rec-ognized in the forum but not for-eign law itself

♦ 1969

- 2nd Restatement of Conflict of Laws, adopted by American Law Institute under Prof. William Reese, proposed that in the ab-sence of statutory law, law to be applied in Conflict case, is the law of the most significant relation-ship.

Conflict of Laws in the Philippines

Spanish Civil Code enforced in the Philip-pines until 1950 contained the principles adopted from the French Civil Code (Code of Napoleon) particularly the nationality law principle. Art 16, par. 1, which applies lex situs rule was adopted from Art. 10 of Spanish CC while par. 2 represents the sys-tem of universal succession. Art. 17, par. 1 follows lex loci contractus. But there was no significant jurisprudence on the subject.

Conflict of Laws was included in law cur-riculum by UP College of Law in 1911 (no less!). Until 1950s, law teachers predomi-nantly used foreign law books and deci-sions by American courts.

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In the Bar, it used to be a separate subject along with PIL but when it was revised, PIL was included in Pol Law while PRIL was merged with Civil Law. But, this does not mean that PRIL is a part of civil law as this mindview tends to limit the perspective and scope of analysis required for conflicts problems.

Now, more problems in Conflict have arisen esp. with Filipinos engaging in foreign busi-ness transactions, and in international air transport and foreign tort claims and labor contracts for OFWs.

III. Sources of Conflict of Laws

A. Codes and Statutes

Conflict of Laws (CL) originated in continen-tal Europe was most laws were codified.

Primary sources of law are found in the civil codes of different countries:

1. Roman code codified principles of ius gentium.

2. Code of Napoleon contained specific rule on personal law of individual, this was followed by several codes (Netherlands, Romania, Italy, Portu-gal, Spain)

3. The German civil Code contained many provisions on Conflict of Laws.

4. Switzerland also enacted Laws on cases involving foreign elements.

5. Greece enacted a Civil Code with CL rules which became a model in other countries

6. The Code of Bustamante (in South America) was patterned after the Code of Napoleon

Conflict Laws of the Philippines

Spanish Civil Code was enforced in the Philippines on December 7, 1889 until the Philippine Civil Code’s effectivity on August 30, 1950 which contained the provisions on conflict of laws of the earlier code.

Spain’s Code of Commerce, having some provisions on foreign transactions, were also enforced in the Philippines on Dec 1, 1888.

One basic source of law is the 1987 Consti-tution which contains principles on nation-ality and comity.

Special statutes were also enacted to gov-ern cases with foreign elements, to wit:

1. Corporation Code2. General Banking Act3. Foreign Currency System Act4. Phil Foreign Law Guarantee Corp5. Retail Business Regulation Act6. Anti-Dummy Law7. Nationalization of Rice and Corn In-

dustry Act8. Insurance Code9. IP Code10. Patent Law11. Trademark Law12. COGSA13. Salvage Law14. Public Service Act15. Civil Aeronautics Act16. Phil Overseas Shipping Act17. Investment Incentives Act18. Export Incentives Act19. RA 7722

B. Treaties and International Con-ventions

The Philippines has entered into a number of treaties and international conventions which deal with private international law since it became a Republic.

Some of these treaties/conventions are: 1. Convention on Intl Civil Aviation,2. Warsaw Convention,3. Convention on Offenses Committed

on Board Aircraft4. Convention on the Suppression of Un-

lawful 5. Acts against Civil Aviation6. UN Convention COGSA7. Convention on Consent to Marriage,

etc8. Convention on Traffic of Persons9. Convention on Elimination of Discrimi-

nation against Women10. Convention on Political Rights of

Women11. IC on the Suppression of Traffic of

Women and Children12. Convention on World Intellectual Prop-

erty Organization13. Berne Convention on Protection of Lit-

erary and Artistic Works

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14. Paris Convention on Protection of In-dustrial Property.

Although many Hague Conventions on Pri-vate International Law were concluded since 1951, which dealt with issues on:

• Personal status

• Patrimonial family status

• Patrimonial status such as agency and trusts

The Philippines is a signatory to the Con-vention on Recognition of Foreign Judg-ment on Civil and Commercial Matters and has ratified the 1993 Convention in Re-spect of Inter-Country Adoption only.

C. Treatises, Commentaries and Stud-ies of Learned Societies

In interpreting statutes and codes involving CL, courts resort to works of distinguished jurists and studies of learned societies.

Distinguished writers in continental Europe include Huber Manreas, Savigny (whose work was translated into English by Guthrie), and Weiss.

Distinguished American and English writ-ers, on the other hand, include Beale, Cavers, Cheatham, Currie, Ehrenzweig, Goodrich, Gussbaum, Story, Wharton, Cheshire, Graveson.

The American Law Institute published 2 studies on CL: Restatement of the Conflict of Laws and a Second Restatement with William Reese as Reporter.

D. Judicial decisions Decisions of courts are the most important source of CL rules and form the main bulk of source of conflict rules. According to Graveson: “This branch of law is more completely judge-made than al-most any other. In its application, judges have to deal with “All Manner of People” more than any other branch. The claim of justice for right as a basis for conflict of laws is supported not only by the terms of the judicial oath but by judicial dicta in judgments”.

PART TWO: JURISDICTION AND CHOICE OF LAW

IV. Jurisdiction

Jurisdiction may mean either a) judicial or b) legislative jurisdiction. (This part talks of judicial jurisdiction)

Judicial JD – the power or authority of a court to try a case, render judgment and execute it in accordance with law.

Legislative JD – the ability of the state to promulgate laws and enforce them on all persons and property within its territory.

4 Major Questions in Analyzing a Conflict of Laws Problem:

1) Has the court JD over the person of the defendant or over his prop-erty?

2) Has the court JD over the subject matter (“competency”)?

3) Has the suit been brought in the proper venue in cases where a foreign element is involved?

4) Is there a statute or doctrine un-der which a court otherwise quali-fied to try the case may or may not refuse to entertain it?

A. Basis of Exercise of Judicial Juris-diction

Bases of Judicial Jurisdiction (3 groups):

1) JD over the person (based on fo-rum-defendant contacts)

2) JD over the res (based on forum-property contacts)

3) JD over the subject matter

1. Jurisdiction over the Per-son

This is acquired by the voluntary appear-ance of a party and his submission to au-thority.

Over the person of the plaintiff: acquired the moment he invokes the aid of the court by filing a suit.

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Over the person of the defendant: acquired when he enters his appearance or is served with the legal process within the state.

When he or his lawyer appears in court, he gives consent to the forum’s exercise of JD over him, except where the appearance is for the purpose of protesting the JD over him.

A non-resident plaintiff who files a suit is deemed to consent to the court’s exercise of JD over subsequent proceedings arising out of his original cause of action (counter-claims).

JD over the defendant may be had by per-sonal or substituted service of summons.

Gemperle vs. Schenker(1967)

FACTS: Paul Schenker (Swiss citizen and resident) filed a complaint against Gem-perle through his wife Helen Schenker, for enforcement of subscription to shares of stock. Gemperle filed a suit against Paul for damages, saying that Paul caused allegations to be published at-tacking his reputation and bringing him into public hatred and discredit as a busi-nessman. Schenker’s defense: court has no JD over the person of Paul.

HELD: Jurisdiction was acquired by the lower court over the person of Paul through service of summons addressed to him upon Helen, it appearing from the answer that she is the representative and attorney-in-fact of her husband in the civil case.

Jurisdiction:1) over the person

a) voluntary appearance b) submission to authority

rule: in substituted service, the premise is that the defendant is within the territorial JD of the court

exception: Gemperle case – because Helen is legally authorized to file a case in behalf of Paul, she is also authorized to receive summons

2) over the property

a) in rem – the situs could “bind the world”

b) quasi in rem

basis of JD: presence of the property within the territory

3) over the subject-matter - WON the court has competence to hear the case and render judgment; the court’s JD must be properly in-voked (provided for by statute)

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2. Jurisdiction over the Prop-erty

JD over the property results from:

a) seizure of the property under a legal process

b) the institution of legal pro-ceedings wherein the court’s power over the property is recognized and made effec-tive

This kind of JD is referred to as in rem JD; the situs could “bind the world” and not just the interest of specific persons.

Basis of exercise of JD: the presence of the property within the territorial JD of the fo-rum.

Quasi in rem JD: affects only the interests of particular persons in that thing (ex. Qui-eting of title). (actions against a person in respect of the res)

In these 2 proceedings, all that due process requires is that the defendant be given ad-equate notice and opportunity to be heard (which are both met by service of sum-mons by publication).

Pennoyer vs. Neff(1878)

FACTS: Neff, a California resident, owned land in Oregon which was sold under a Sheriff’s deed to satisfy a money judg-ment against him. The service of sum-mons was made by publication. He is su-ing for recovery of said land, alleging that the sale was invalid for lack of JD of the Oregon court over him.

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Notes!


HELD: Substituted services by publica-tion, or in any other authorized form, may be sufficient to inform parties of the object of the proceedings taken where property is once brought under the con-trol of the court by seizure or some equivalent act to any proceedings autho-rized by law upon such seizure for its condemnation and sale.

But where the entire object of the action is to determine the personal rights and obligations of defendants, that is, where the suit is merely in personam, construc-tive service in this form upon a non-resi-dent is ineffectual for any purpose.

The important thing to prove is what kind of action is involved (to determine suffi-ciency of form of service to be used)

International Shoe Co. vs. Washing-ton

(1945)FACTS: The state of Washington sued In-ternational Shoe Co. (a Delaware corpo-ration with principal place of business in Missouri) to collect the tax laid upon the exercise of the privilege of employing salesmen within the state. International Shoe’s defense is that its activities within the state, consisting merely of exhibiting samples and soliciting orders and noth-ing more, were not sufficient to manifest its “presence” there; hence the state courts had no JD over it.

HELD: The SC of Washington has JD over International Shoe. Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he should have certain minimum con-tacts with it, such that the maintenance of the suit does not offend “traditional notions of fair play and substantial jus-tice”. (Minimum contacts so that the suit will not offend traditional no-tions of fair play and substantial justice.)

The demands of due process regarding the corporation’s “presence” may be met by such contacts of the corporation with the state of the forum as to make it rea-sonable xxx to require the corporation

with defend the particular suit which is brought there.

Its “presence” can be manifested only by such activities carried on in its behalf by those who are authorized to act for it.

Mullane vs. Central Hanover Bank & Trust Co.

(1950)FACTS: In an action for judicial settle-ment of accounts of Central Hanover Bank as trustee of a common trust fund, some of the beneficiaries who are non-residents of NY were notified only by publication in a local newspaper.

HELD: When notice is a person’s due, process which is a mere gesture is NOT due process. The means employed must be such as one desirous of actually in-forming the absentee might reasonably adopt to accomplish it. Within the limits of practicability, notice must be such as is reasonably calculated to reach inter-ested parties.

In Mullane, the manner notice was given should reasonably result in informing the affected partner; when conditions do not allow such notice, the form chosen should not substantially be “less likely to bring home notice than other of the feasible and customary substitutes.”

Shaffer vs. Heitner(1977)

FACTS: Heitner, a non-resident of Dela-ware with 1 share of stock in the Dela-ware corporation Greyhound, sued Grey-hound and its officers for allegedly violat-ing its duties. Pursuant to the case, Heit-ner filed a motion for sequestration of the defendants’ stocks in Greyhound. The stocks, while not physically present in Delaware, are considered to be there in view of it being the place of incorpora-tion.

HELD: The Delaware court cannot exer-cise JD just because the stocks are statu-torily present in Delaware. The property (stocks) is not the subject matter of the litigation nor is the underlying cause of

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action related to the property. Also, the facts in CAB does not demonstrate that defendants have purposefully availed themselves of the privilege of conducting activities within the forum state in a way that would justify bringing them before a Delaware court.

In Shaffer, the minimum contacts and fun-damental fairness test should be satisfied regardless of whether the proceedings are in rem, quasi in rem or in personam.

Traditional basis for the exercise of judicial JD is the state’s physical power over per-sons and property within its territory; this is why in in rem proceedings, it can exercise JD over property situated in the state re-gardless of whether it could otherwise ex-ercise JD over the persons whose interest would be affected by the decision.

In the US, there is a shifting trend from the-ory of territorial power to considerations of minimum contacts and fundamental fair-ness. This approach 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 non-resident status.

Distinction, Shaffer and International Shoe: while International Shoe requires minimum contacts between the defendant and the forum, Shaffer demands that minimum contacts exist among the forum, defendant and the cause of action.

The change in the conceptual foundation of JD from territorial power to fairness does not significantly affect proceedings in rem, which are suits where the property itself is the object of the controversy. The physical presence of the property within the state establishes the state’s paramount interest in adjudicating a claim over it and provides the necessary minimum contacts.

Long-Arm Statutes

Long-arm statutes specify the kinds of con-tacts upon which JD will be asserted. Some long-arm statutes broadly authorize courts to assert JD in any case not inconsistent with the Constitution, leaving it to the court to define its limitations on a case-by-case basis.

3. Jurisdiction over the Sub-ject-matter

Subject-matter JD is allocated among the courts by constitutional and statutory laws, according to the nature of the controversy, thereby determining the competence of the court to try and decide a case.

It is not enough that a court has a power in abstract to try and decide the case; it is necessary that said power be properly in-voked xxx by filing a petition.

Subject-matter JD cannot be conferred by consent of the parties.

Idonah Perkins vs. Roxas(1941)

FACTS: Eugene Perkins filed a complaint against Benguet Consolidated for the re-covery of declared dividends, but Benguet withheld payment upon the op-posing claim of Idonah Perkins, wife of Eugene. Idonah sets up a NY judgment declaring her to be the sole owner of the Benguet shares and allege that such judgment is res judicata.

HELD: The CFI has jurisdiction over the case, despite the presence of the NY judgment. Whether or not the trial judge in the course of the proceedings will give validity and efficacy to the NY judgment set up by Idonah in her cross-complaint is a question that goes to the merits of the controversy and relates to the rights of the parties as between each other, and not to the jurisdiction of the court. The fear that the trial judge may render judgment annulling the final judgment of the NY court is not a ground to deny the lower court of JD. The test of JD is whether or not the tribunal has power to enter upon the inquiry, not whether its conclusion in the course of it is right or wrong.

“Presence”/Jurisdiction:1) Traditional Views

a) Pennoyer – actual physi-cal presence

2) Modern Views

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Notes!


a) Int’l. Shoe – contact be-tween the forum and the corporation (even in the absence of an actual of-fice, etc.)

b) Mullane – disregards strict distinction between in rem and in personam

c) Shaffer – minimum con-tacts between the proper-ties and forum; funda-mental fairness test

Long-arm statutes: already identify what are the bases of JD.

✪ Jurisdiction and choice of law do not mean the same thing.

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B. Ways of Dealing with a Conflicts Problem

The court may deal with a conflicts prob-lem, by:

1) dismissing the case for lack of ju-risdiction or on the ground of fo-rum non conveniens

2) assuming jurisdiction and apply-ing either forum or foreign law

1. Dismiss the case

Doctrine of Forum non ConveniensThis doctrine requires the court to dismiss the case on the ground that the contro-versy may be more suitably tried else-where. This phrase literally means “the fo-rum is inconvenient.”

Reasons for applying forum non conve-niens:

1) to prevent abuse of the court’s processes (prevent harassment of defendant, dissuade a non-resi-dent plaintiff from choosing the forum because of larger jury ver-dicts, etc.)

2) burdensome on the court or tax-payers (severe backlog of cases)

3) local machinery is inadequate to effectuate a right (no way for court to secure evidence and at-tendance of witnesses)

4) avoid global forum shopping

English and Scottish courts have applied FNC when there was “another available and more appropriate forum, in which the ends of justice would be better served in view of the interests of all parties, by eliminating the vexatious or oppressive character of the pending proceedings and by removing any unfairness to either party which would result from trial in the forum seized of the case.”

Heine vs. New York Insurance Co. (1940)

FACTS: An action for recovery on life in-surance policies made and issued in Ger-many was filed by German citizens in Oregon against a NY corporation.

HELD: The Oregon court may refuse to exercise JD. The courts of Germany and New York are open and functioning and competent to take JD of the controver-sies, and service can be made upon the defendants in either of such JDs. To re-quire the defendants to defend the ac-tions in Oregon would impose upon them great and unnecessary inconvenience and expense. The courts of this country are established and maintained primarily to determine controversies between its citizens and those having business there, and manifestly the court may protect it-self against a flood of litigation over con-tracts made and to be performed in a foreign country, where the parties and witnesses are nonresidents of the forum, and no reason exists why the liability, if any, cannot be enforced in the courts of the country where the cause of action arose, or in the state where the defen-dant was organized and has its principal offices.

In re: Union Carbide(1986)

FACTS: An industrial disaster in a chemi-cal plant of Union Carbide in Bhopal, In-dia caused deaths and injuries to a num-ber of residents. India enacted the

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Bhopal Gas Leak Disaster Act, which au-thorized the government (Union of India) to represent the victims. The UOI filed a complaint in NY in behalf of the victims. Union carbide moved to dismiss on the ground of forum non conveniens.

HELD: Indian courts have JD, not US courts. Even if UCC has domicile in the US, this loses significance because it gave its consent to Indian JD. Moreover, the findings of the court show that the proof bearing on the issues to be tried is almost entirely located in India (principal witnesses and documents, detailed de-signs, implementation of plans, safety precautions, etc.).

Wing On Company vs. Syyap(1967)

FACTS: Syyap failed pay Wing On, a NY-based partnership, its obligation for a contract of purchase of clothing material. Wing On filed an action in the Philippines against Syyap, but Syyap contends that the trial court should have declined JD on the ground of forum non conveniens.

HELD: Forum non conveniens is inappli-cable. Unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should be rarely dis-turbed, and furthermore, the considera-tion of inadequacy to enforce the judg-ment, which is one of the important fac-tors to be considered in the application of said principle, would precisely consti-tute a problem to the plaintiff if the local courts decline to assume JD on the basis of said principle, considering that defen-dant is a resident of the Philippines.

There is no existing catalogue of circum-stances that will justify sustaining a plea of forum non conveniens but, in general, both public and private interests should be weighed.

When the forum is the only state where JD can be obtained over the defendant and, in addition, some relation with the parties exists or when the forum pro-vides procedural remedies not available in another state, the forum court may not resist imposition upon its JD.

Bank of America vs. CA(2003)

FACTS: The spouses Litonjua are en-gaged in the shipping business; they ex-ecuted a contract where Bank of America was made the trustee of their busi-nesses. But the businesses suffered losses in the hands of the bank, so the spouses filed a case for damages for breach of trust and accounting of rev-enues in the Philippines. Bank of America filed a Motion to Dismiss on the ground of forum non conveniens.

HELD: While it is within the discretion of the trial court to abstain from assuming JD on the ground of forum non conve-niens, it should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance; and the propriety of dismissing a case based on this princi-ple of forum non conveniens requires a factual determination, hence it is more properly considered a matter of defense.

The SC also held in Philsec. Investment vs. CA that the doctrine of FNC should not be used as a ground for a motion to dismiss because Sec. 1 Rule 16 of ROC does not include said doctrine as a ground.

Forum non conveniens:1) prevent abuse of court processes2) burdensome on the court/taxpay-

ers3) prevent global forum shopping

✪ FNC is not something that auto-matically applies; its application rests in the sound discretion of the court

✪ in Wing On vs. Syyap. Prof. Pan-galangan does not agree with the holding that “unless the bal-ance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be dis-turbed”, because in the first place, it was the plaintiff who chose that forum.

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2. Assume Jurisdiction

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Notes!


When the court assumes JD, it may apply forum law or foreign law, although forum law should be applied whenever there is good reason to do so because the forum law is the basic law.

Factors which justify the application of in-ternal law:

1) A specific law of the forum decrees that internal law should apply

Examples of this are Art. 16 of Civil Code (lex nationale governs testate and intes-tate succession of the person whose suc-cession is under consideration); Art. 829 of the Civil Code (revocation of wills outside RP); and Art. 819 (prohibition on joint wills by Filipinos).

✪ Example: prohibitory or mandatory laws of the forum

2) The proper foreign law was not properly pleaded and proved

Our courts may not take judicial cog-nizance of any foreign law; hence, failure to plead and prove foreign law leads to the presumption that it is the same as forum law.

✪ Under the Rules of Court, the foreign law may be proved by:

a) official publicationb) certification form the officer

with official custody, under seal, and the Phil. Embassy must certify that such officer has official custody, etc.: that it is the law in force at the time etc., etc.

Fleumer vs. Hix(1930)

FACTS: Fleumer, the special administra-tor of the estate of Hix, appealed the de-nial of the probate of Hix’s will, alleging that since the will was executed in West Virginia by a resident therein, West Vir-ginia law should govern.

HELD: The courts of the Philippines are not authorized to take judicial notice of the laws of the various States of the

American Union. Such laws must be proved as facts. Here the requirements of law were not met. There was no show-ing that the book from which an extract was taken was printed or published un-der the authority of the state of West Va. as provided in the Code of Civil Proce-dure; nor was the extract from the law attested by the certificate of the officer having charge of the original.

Philippine Trust Co. vs. Bohanan(1960)

FACTS: The will of Bohanan was admitted to probate; in the probate he was de-clared to be a citizen of Nevada. In the hearing for the proposed project of parti-tion, Nevada law was not introduced. Bo-hanan’s widow questioned the validity of the will under Philippine law; however, if Nevada law was to be applied, the will would be valid.

HELD: The law of Nevada, being a for-eign law, can only be proved in our courts in the form and manner provided for by our Rules. However, it has been found that during the hearing for the mo-tion of the widow Bohanan for with-drawal of her share, the foreign law was introduced in evidence by her counsel. In addition, the other heirs do not dispute the provisions of the Nevada law. Under these circumstances, the pertinent laws of Nevada can be taken judicial notice of by the court, without proof of such law having been offered at the hearing of the project of partition.

As the validity of the testamentary dispo-sitions are to be governed by the na-tional law of the testator, the order of the court approving the project of parti-tion in accordance with Nevada law must be affirmed.

3) The case falls under any of the exceptions to the applica-tion of foreign law

a) The foreign law is contrary to an important public policy of the forum

b) The foreign law is penal in na-ture

c) The foreign law is procedural in nature

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d) The foreign law purely fiscal or administrative in nature

e) The application of the foreign law will work undeniable injus-tice to the citizens of the fo-rum

f) The case involves real or per-sonal property situated in the forum

g) The application of the foreign law might endanger the vital interest of the state

h) The foreign law is contrary to good morals

V. Choice of Law

A. The Correlation between Jurisdic-tion and Choice of Law

1) The factors that justify exer-cise of judicial jurisdiction maybe the same factors used to determine choice of law

2) if the forum applies its inter-nal law because it has a real interest, the outcome of the case will be foreordained by the forum

- plaintiff will choose forum who has real interest in applying its in-ternal law

3) generally, forum will apply its internal law so plaintiff will bring suit where internal law is favorable to him

BUT these are 2 diff. concepts. A court may exercise jurisdiction but apply foreign law or not exercise jurisdiction but the state’s internal law will be applied.

B. Approaches to Choice of Law

Ideally, the object of all choice of law theo-ries must be justice and predictability.

1. Traditional Approaches

- theories that emphasize simplic-ity, convenience and uniformity

a. vested rights theory

- advanced by Prof. Beale (1st Re-statement)

- an act done in a foreign jurisdic-tion gives rise to a right if the laws of that state provides so. The right vests and he can bring suit in any forum he chooses.

- The forum refers law of the place of the “last act” necessary to complete the cause of action. (place of injury)

- If place of the last act creates no legal right, although forum court creates such right if act is done within its territory, it will not en-force the right.

Gray vs. Gray(1934)

FACTS: Wife (W) sued husband (H) for damages in New Hampshire where they are residents. Accident happened in Maine. Maine bars suit between spouses.

HELD: The effect of the prohibition in Maine is to divest the W of any cause of action against H. If there is a conflict be-tween lex fori and lex loci, lex loci gov-erns in torts in respect to the legal effect and incidents of the act.

The status as spouses is determined by New Hampshire law but the incidents of that status is governed by the law of the place of the transaction (Maine).

Alabama Great Southern Railroad vs. Carroll

(1892)FACTS: Carroll is an employee of Al-abama RR. Both are residents of Al-abama. C was injured in the course of work bec. of negligence of co-EE in Mis-sissippi. Mississippi bars recovery. Al-abama makes employer liable. Suit is filed in Alabama.

HELD: There can be no recovery in one sate for injuries to the person sustained in another unless the infliction of the in-juries is actionable under the law of the state in which the injuries were received.Although it is claimed that the negligent conduct was done in Alabama, the injury sustained creates the cause of action and not the negligence. (law of the place of injury)

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Criticisms to the Approach: failure to re-solve conflicts cases with considerations of policy and fairness.

b. Cook’s Local Law The-ory

- treat conflicts cases as a purely domestic case that does not in-volve a foreign element

- power of a state to regulate within its territory has no limita-tion except as imposed by its own positive law

- criticism: appeals to narrow-mined who favors an exaggerated local policy bec a sovereign can do as they please, depreciating the practical and equitable con-siderations that should control the case.

c. Caver’s Principles of Preference

- 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 par-ties.

- Caver’s principles have a territori-alist bias; it looks to the place where the significant events oc-curred or where the legal relation-ship is centered.

- Court should: 1) scrutinize the event/ transac-

tion giving rise to the issue2) compare carefully the prof-

fered rule of law & the result of its application with the rule of the forum & its effect

3) appraise these results from the standpoint of justice be-tween the litigants or of con-siderations of social policy

2. Modern Approaches

a. Place of the Most Signifi-cant Relationship

-identifies a plurality of factors:

i. needs of the interstate and intl system

ii. relevant policies of the concerned states

iii. relevant policies of other interested states

iv. protection of justified ex-pectations of the parties

v. basic policies underlying the particular field of law

vi. certainty, predictability and uniformity of result

vii. ease in the determina-tion and application of law to be applied

Examples of application:

i. torts – place of injury, place of tortious con-duct, domicile, residence or nationality of parties, place where relationship is entered

ii. contracts – choice of law of the parties, place of contracting, place of per-formance, domicile, resi-dence, nationailty, place of incorporation and place of business

Auten vs. Auten(1954)

FACTS: Spouses were married and lived in England. H left and went to NY. Spouses executed support agreement in NY. H failed to pay support. W sued H for legal separation. W sued in NY to enforce agreement. H claimed that legal separa-tion suit, extinguished liability under NY law.

HELD: English law should govern the par-ties. England has all the truly significant contacts while the nexus to NY is entirely fortuitous.

England is the seat of marital domicile and the place where W & children were to be, it has the greatest concern in defining and regulating the rights and duties existing under the agreement and the circumstances that affect it. Whereas NY is only the place of the agreement and where the trustee, where moneys will be paid for the account the W & chil-dren, had his office.

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In applying the “grouping of contacts” theory, courts, instead of regarding as conclusive the intention of the parties or the place of making or performance, lay emphasis rather on the law of the place which has the most significant contacts with the matter in dispute.

Haag vs. Barnes(1961)

FACTS: Barnes & Haag had an affair in NY. H became pregnant. After giving birth, H went to Chicago. Parties entered into a support agreement in Chicago. The agreement contained a choice of law clause (Illinois). H & child went back to live in NY. H filed support action in NY against B. Under NY law, agreement is not binding. B’s defense: Illinois agree-ment bars suit.

HELD: Suit is barred by the prior support agreement. Court found that Illinois has the most significant contacts. It is what the parties intended to apply, the place of performance, the place of business of B & the agents and the place where sup-port are being made compared to NY whose contacts are of less weight & sig-nificance. (place of liaison & residence of H & child)

Criticisms to approach: no standard to evaluate the relative significance/impor-tance of each contact such that court may use approach to support any preconceived result without explaining its real motives.

b. Interest Analysis

- resolve conflicts cases by looking at the policy behind the laws of the involved states and the inter-est each state has in applying its own law.

- Tasks of the court:1st: determine whether the case in-volves a true, false or apparent conflict (false conflict: only one state has an actual interest in hav-ing the law applied and the failure to apply the other state law will not impair its policy)2nd: if there is apparent or true con-flict, court should take a second look on the policies and interests of the states. If only one has a real in-

terest, the other is insubstantial, then there is false conflict. If both have real interests in applying their law, then the apparent conflict is a true conflict.

Babcock vs. Jackson(1963)

FACTS: Babcock & Jackson, NY residents, met a car accident in Ontario thru J’s fault. B sued J in NY for damages. Ontario bars recovery under a guest statute. NY does not have a similar rule.

HELD: B should be allowed to recover. NY had a greater & more direct interest than Ontario. NY’s policy is to afford compensation to a guest against tortfea-sor host while Ontario’s policy is to pre-vent fraudulent collusion to the prejudice of Ontario defendants-insurance compa-nies. Thus, Ontario had no interest in denying a remedy to a NY guest against a NY host.

The rule on tort claim is:Where the issue involves standard of conduct, law of the place of the tort is controlling, but as to other issues, court must apply the law of the state which has the strongest interest in the resolu-tion of the issue presented.

Criticisms to Approach: not all state legisla-tures publish reports that explain the back-ground and purpose of the laws, thus court is left to speculate on the purpose of the law and not all reflected policy or had a purpose other than to decide cases.

✪ Pangalangan on Interest analysis: why consider what the state wants when interests of individuals are in issue?

c. Comparative Impairment

- subordination of the state objective which would be least impaired

- How? Court should weigh conflicting interests and apply the law of the state whose interest would be more impaired if its laws were not fol-lowed

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Notes!


d. Trautman’s Functional Analysis

- this approach looks into:1) the general policies of the

state beyond those reflected in substantive law

2) policies and values reflecting effective and harmonious re-lationship between states

ex. Reciprocity, advancement of multistate activity, protect-ing justifiable expectations, evenhandedness and effective-ness.

- after determining these policies, court should then weigh the rela-tive strength of a state policy

- HOW? Court should consider whether the law of a state reflects an “emerging” or “regressing” pol-icy.

e. Leflar’s Choice-Influenc-ing Considerations

5 major choice-influencing considera-tions

1) predictability of results2) maintenance of interstate and

int’l order3) simplification of the judicial

task4) application of the better rule

of law5) advancement of the forum’s

governmental interest

- court should prefer a law that make good socioeconomic sense and are sound in view of present day conditions

- Criticism: no principled or objec-tive standard to determine “better rule”.

Traditional approaches do not consider pol-icy; all modern approaches look at policy.______________

VI. The Problem of Characterization

A. Characterization and the Single-Aspect Method

Single-aspect method: choice of law theo-ries traditionally concentrated on one ele-ment of a situation to connect case to par-ticular legal community.Goal: simplicity, convenience, uniformity

Multi-aspect method: modern approach by which all important factors (non/territorial) are analyzed.

The applicable law is arrived at by elabo-rating policies & purposes underlying rules, and the needs of international intercourse.

Goal: just resolution of case

The Philippines follows single-aspect method. Our conflicts rules are mostly found in the Civil Code.

Art 15: Laws relating to family rights & du-ties, or to the status, condition and legal capacity of persons are binding upon citi-zens of the Philippines, even though living abroad.

Art 16: Real property as well as personal property is subject to the law of the coun-try where it is situated.

However, intestate and testamentary suc-cession, both with respect to the order of succession and to the amount of succes-sional rights and to the intrinsic validity of testamentary provisions shall be regulated by the National law of the person whose succession is under consideration, what-ever may be the nature of the property and regardless of the country wherein said property may be found. (AOI)

Art 17: The forms and solemnities of con-tracts, wills, and other public instruments shall be governed by the laws of the coun-try in which they are executed.

When the acts referred to are executed be-fore 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 inef-fective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

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Notes!


The rules specify geographical location in accordance with traditional approach. The problem with this: inherent rigidity, unjust decisions.

Solution: Characterization, Renvoi, Escape devices

Characterization: the process by which a court assigns a disputed question to an area in substantive law. It is a part of legal analysis and a pervasive problem since at least 2 jurisdictions with divergent laws are involved.

Two Types of Characterization:

1. Subject-matter Character-ization

This calls for classification of a factual situ-ation into a legal category. It is significant in a single-aspect method because the le-gal category to which an issue is assigned determines governing law

Gibbs vs. Gov’t. of PI(1933)

FACTS: Spouses Allison & Eva were resi-dents & citizens of California owning parcels of land in Manila. Eva died. Alli-son, as administrator files petition to de-clare lands in his favor pursuant to Cali-fornia law. California Civil Code provides that upon wife’s death previous to hus-band, community property belongs abso-lutely to husband.

HELD: California Civil Code will not apply. The law of the place where land is situ-ated governs its descent, alienation &transfer & for the effect & construction of wills & other conveyances.

As mandated by Philippine law, the lands were acquired as community property in the conjugal partnership. The wife was vested with a title equal to that of her husband. Upon her death, if there are no obligations of the decedent, her share in the conjugal property is transmitted to the heirs by succession.

Though the court was silent on the matter of characterization, it had the task of cate-gorizing the issue as one involving:

b) property to be governed by lex situs, or

c) succession to be governed by decedent’s national law (Cali-fornia)

Characterization problems are considered a threat to traditional choice-of-law theories whose aims are uniformity & predictability of results.

Problems:

A) C, is adopted in the Philippines by a for-mer Filipino citizen and moves to the US with her adoptive mother, M. By M’s laws, C will not be an heir. Will C be entitled to an intestate share in M’s estate?

The court would have to decide whether it is a Q relating to

1. Legality & effects of adoption: law of state where legal relationship of adoption was established or where the adoption decree was granted shall govern; or

2. Succession: adopter’s personal law shall prevail

B) Principal authorizes a person to act as his agent in another country. Agent com-mits a negligent act. What law will deter-mine the principal’s liability? It depends on the court’s characterization of the case as:

1. Contractual: law of the place where the contract of agency was entered into; or

2. Tortious: law of the place where tortuous conduct or injury occurred

2. Substance-Procedure Di-chotomy

Directs the court to the extent it will apply foreign law.

If issue substantive: court may apply for-eign lawIf issue procedural: follow forum law

Why apply forum law to matters of proce-dure?

One of the main goals of a rational system of CL rules: Rights & Duties of parties aris-ing from a legal situation shall not be sub-stantially varied because the forum in w/c action is brought.

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Courts of all civilized states now seek to protect parties, by referring to foreign law, against a substantial change of position be-cause of fortuitous circumstance that suit was brought in that forum.

The means provided for compulsion, or the limitation upon compulsion are in most cases of equal practical importance to the declaration of the validity of the plaintiff’s claim.

Such all inclusive reference to foreign law is never made. It would be too burdensome on the part of the forum and administration of justice will be delayed. Thus, it is neces-sary to limit the scope of reference to for-eign law.

This limitation excludes phases of the case which make the administration of foreign law inconvenient or violative of local policy. In such instances, local rules of the forum are applied & are classified as matters of procedure.

Grant vs. Mcauliffe(1953)

FACTS: Plaintiffs, Grant, et al., (California residents) were injured in Arizona when their vehicle collided with that of Pullen’s (California resident), who died of acci-dent. The suit against estate of Pullen filed by Grant to recover damages was dismissed because under Arizona law- “a tort action not commenced before the death of the tortfeasor must be abated”. But under California law, an action for tort survives the death of tortfeasor.

HELD: Survival statutes are procedural. Thus, California (forum) law applies. Fo-rum law governs if issue is procedural. Under California Civil Code the action out of a wrong resulting to a physical injury shall not abate because of the death of the wrongdoer. Plaintiff’s cause of action survives Pullen’s death.

The reaction to Grant was generally nega-tive. It was criticized as being based on an erroneous characterization greatly influ-enced by “sympathy”. Other view: Correct result but arrived at us-ing dubious method.

Currie: The court availed of one of several escape devices - characterization. It char-acterized the problem differently, such pro-ducing the result previously recognized as the sound result.

This device is not ideal. It is better if courts could expressly state the considerations that helped them determine the results and indicate clearly how these considera-tions will be used in other cases.

No objective standard has been suggested. An attempt to explain the court decision in terms of “demands of justice” or “social pol-icy” would create uncertainty & arouse crit-icism.

Procedural issues are governed by forum law so that the court will not be unduly bur-dened by task of studying peculiarities of another legal system. It must be noted, though, that some matters cannot be clearly defined as procedural or substan-tive.

Two Issues whose classification (as proce-dural or substantive) is debatable:

1) Statute of FraudsIt is considered substantive if words of law relate to forbidding the creation of obliga-tion. One that forbids the enforcement of the obligation is characterized as proce-dural Marie vs. Garrison: Defendant maintains that the NY Statute of Frauds affects the remedy upon a contract w/in its terms—a rule prescribing evidence & deemed a rule of procedure. Garrison claims that rules of the forum must be followed. Marie claims that NY law was constructed as a rule of substance going into existence of contract; determined by lex loci contractus.

Issue: Whether a contract declared ‘void’ by a stature still subsists as a contract w/ the only effect of depriving party of a rem-edy or mere evidence.Held: It was a word of substance because the statute provided that the contract of sale of any interest in land shall be void un-less it was in writing ex contrario to a law stating that ‘no action shall be brought’ of the requirement was not complied with.

2) Statutes of Limitations (SL) & Borrowing Statutes

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Statutes of limitations are traditionally clas-sified as ‘procedural’ because they only barred the legal remedy w/out impairing the substantive right involved.

Thus, a suit can still be maintained in an-other JD w/c has a longer SL. However, cer-tain SL’s have been classified as substan-tive for conflicts purposes if providing a shorter period for certain claim types fall-ing w/in wider class covered by the general SL.

Specificity test: to determine whether an SL is substantive or procedural.

An SL of a foreign country is treated as “substantive” when limitation was directed to newly created liability so specifically as to warrant saying that it qualified the right

Borrowing statutesPurpose: Many states, the Philippines among others, have passed borrowing statutes to eliminate forum-shopping.

However, in the case of Cadalin, the court said that to enforce the borrowed statute would contravene public policy on protec-tion of labor.

Cadalin vs. POEA Administrator(1994)

FACTS: Cadalin et al. instituted a class suit with the POEA for money claims aris-ing from their recruitment by AIBC and BRII for pretermination of employment contracts. Under Bahrain law where some of the complainants were de-ployed, the prescriptive period for claims arising out of a contract of employment is one year.

HELD: Even though a law on prescription may be considered as substantial or pro-cedural, its characterization as either be-comes irrelevant when the country of the forum has a “borrowing statute.” Said statute has the practical effect of treat-ing the foreign statute of limitation as one of substance. Under the ROC of the Philippines, it is provided that “if by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philip-pines.” The Bahrain law on prescription should apply. However, it cannot be en-

forced as it would contravene the public policy on the protection to labor. Philip-pine law will then be applied.

B. Depecage

From depecer, which means “to dissect.”

Different aspects of a case involving a for-eign element may be governed by different systems of laws.

Von Mehren & Trautman: A man dies intes-tate domiciled in state A & w/ movable properties in State B. How will the man’s estate be divided? State A conflict rules refer to laws of domi-cile. Intestate law of State B gives the widow a definite share in the estate of de-ceased. But the determination of WON the woman claiming the share is a “wife” is re-ferred to family law, not laws on succes-sion.

Issues of law governing movable properties & successional rights of spouse are of pri-mary importance, embodying substance of claim. Validity of marriage ‘affects solution because it answers a preliminary or inci-dental Q.

The presence of an incidental Q is one in-stance which calls for the employment of depecage.

Merits of Depecage:This technique allows other relevant inter-ests of parties to be addressed. Thus, it permits courts to arrive at a functionally sound result w/out rejecting the methodol-ogy of the traditional approach. This nu-anced single-aspect method employs de-pecage by choice.

Haumschild vs. Continental Casualty(1959)

FACTS: Haumschild and Gleason were married in Wisconsin, their domicile. Haumschild was injured in California while riding a motor truck driven by Gleason. Their marriage was later an-nulled. An action for recovery of dam-ages was filed by Haumschild in Wiscon-sin. Continental alleges that under Cali-fornia law, a spouse is immune from suit by the other spouse.

18


HELD: The law of the domicile ought to be applied in any issue of incapacity to sue based upon family relationship. The policy reason for denying the capacity to sue (preventing family discord) more properly lies within the sphere of family law, where domicile usually controls the law to be applied, than it does tort law, where the place of the injury generally determines the substantive law which will govern.

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

The 1969 Restatement 2d adopted de-pecage & set out a number of factors to be considered in choosing the applicable law:

a. needs of interstate & international system

b. relevant policies of the forum

c. relevant policies of other inter-ested states & the relative inter-ests of those states in the deter-mination of a particular issue

d. protection of the justified expec-tations of the parties

e. the basic policies underlying the particular field of law

f. certainty, predictability, unifor-mity of results, and

g. ease in determination & applica-tion of law to be applied

The consideration of any elements & ac-ceptance by courts of depecage help ease restrictions of single aspect method.

Courts not compelled to apply entire law to all aspects of case…that might produce egregious results. Cutting up the case issue by issue is fair & reasonable.

But even if a useful tool in modern choice-of-law analysis, the express reference to depecage in case law, both in US & the Phil still uncommon.

VII. The Problem of Renvoi

A. Definition

Renvoi – a procedure whereby a jural mat-ter 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 to the law of the forum or a third state.

Remission: reference is made back to the law of the forum

Transmission: reference to a third state

Renvoi has been employed in cases where the domiciliary and nationality laws are ap-plied to the same individual in issues in-volving succession, domestic relations and real properties.

Renvoi:

B. Various ways of dealing with the Problem of Renvoi

4 Ways of Dealing with the Problem of Ren-voi (Prof. Griswold):

1) if the conflicts rules of the forum court refer the case to the law of another state, it is deemed to mean only the “internal” law of that state (internal law: that which would be applied to a do-mestic case that has no conflict-of-laws complications) – rejects the renvoi

2) the court may accept the renvoi and refer not just to another state’s “internal” law but to the

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renvoi(remission)

Conflict-of-laws rule

Internal lawArt. 16 CC

State BState A (RP)


“whole” law (includes choice-of-law rules applicable in multi-state cases)

Aznar vs. Garcia(1963)

FACTS: The will of Edward Christensen, a domiciliary of the Philippines, was admit-ted to probate, and a project of partition was proposed. Edward’s illegitimate child opposed the project of partition on the ground that the distribution of the estate should be governed by Philippine law. The lower court found that Edward was a US citizen; hence the successional rights and intrinsic validity of the will should be governed by California.

HELD: Philippine law should apply. Art. 16 of the Phil. Civil Code provide that the national law of the decedent governs the validity of his testamentary dispositions. Such national law means the law on con-flict of laws of the California code, which authorizes the reference or return of the question to the law of the testator’s domicile. The conflict of laws rule in Cali-fornia precisely refers back the case, when a decedent is not domiciled in Cali-fornia, to the law of his domicile (the Philippines in the CAB). The Phil. court must apply its own law as directed in the conflict of laws rule of the state of the decedent.

3) by desistance or mutual dis-claimer of JD – the same result as the acceptance of the renvoi doc-trine but the process used by the forum court is to desist applying the foreign law.

4) “foreign court” theory – the forum court would assume the same po-sition the foreign court would take were it litigated in the foreign state

Disadvantage to renvoi: if both courts fol-low the same theory, there would be no end to the case since the courts would be referring it back to each other. It gives rise to situations that have been invariably de-scribed as resembling “revolving doors,” a “game of lawn tennis,” a “logical cabinet of mirrors” or a “circulus inextricabilis.”

Annesley, Davidson vs. Annesley(1926)

FACTS: The testatrix, a British subject, was a domiciliary of France according to British law, but not according to French law. She made a will in English form. In the will she disposed of all her property in favor of her daughter, and stipulated that she had no intention of abandoning her domicile in England. If she was a domiciliary of France, she could only dis-pose of 1/3 of her personal property.

HELD: The domicile of the testatrix at the time of her death was French. Applying English law, the fact of her residence in France coupled with animus manendi showed her intention to abandon her English domicile even if she had not complied with the formalities required under French law to become a French domicile.

According to French municipal law, the law applicable in the case of a foreigner not legally domiciled in France is the law of that person’s nationality, which is British. But British law refers the ques-tion back to French law, the law of the domicile. And according to French law, the French courts, in administering the movable property of a deceased for-eigner 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 domi-ciled, will apply French municipal law, even if he had not complied with the French requirements for acquisition of domicile.

Options which the forum court may do:a) accept the renvoi (apply forum

law)b) reject the renvoi (apply the inter-

nal law of the foreign state)c) desistance/mutual disclaimerd) “foreign court” theory

- the difficulty with the foreign court theory is that the forum court will have to anticipate or guess how the foreign court will act.

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Notes!


✪ Renvoi is optional, based on the discretion of the court and the facts of the case.

_______________

C. Usefulness of Renvoi

Renvoi has been used to avoid unjust re-sults.

University of Chicago vs. Dater(1936)

FACTS: Mr. and Mrs. Price executed a trust deed and promissory notes in favor of University of Chicago, for a loan se-cured by Mr. Price and Mr. Dater. They were residents of Michigan; the mort-gage and the notes were also signed there and sent by mail to Chicago. In a suit filed by the University in Michigan against the spouses Dater and Mrs. Price (Mr. Price having died earlier), the court ruled that there was no cause of action against Mrs. Price, because under Michi-gan law a married woman has no capac-ity to enter into an obligation such as this, hence the note and trust deed were void. The question is which law should be applied, Michigan or Illinois law.

HELD: Under the law of Illinois, the ca-pacity of Mrs. Price is governed by Michi-gan law (as held in the similar case of Burr vs. Beckler, where the court said that since the contract was completed in Florida, that state governed her capacity to contract). In this case, the contract was complete in Michigan, and it governs her capacity to contract. Since she was not competent to contract under Michi-gan law, her note and trust deed were void.

In the Dater decision, Michigan protected the interest of a Michigan wife especially since Illinois disclaimed any desire in apply-ing its law. Also, uniformity of results was promoted in spite of discrepancies in the choice-of-law rules of the involved states. With renvoi, the Dater decision was made dependent on substantive law and not on the incidental law of the forum.

Objections to Renvoi

Critics: 1) renvoi would place the court in a

“perpetually-enclosed circle form which it would never emerge and that it would never find a suitable body of substantive rules to apply to a particular case.” The theoreti-cal problem presented is that ren-voi is workable only if one of the states rejects it and that it achieves harmony of decisions only if the states concerned do not agree on applying it the same way.

Griswold: the objection is based on a false premise; as long as remission is to the state’s internal law alone there will be a stop to the “endless chain of reference.”

2) Courts may be unnecessarily bur-dened with the task of identifying the choice-of-law rules of another state.

Pangalangan: from a practical perspective, the forum court will not use renvoi if, in the first place, it cannot ascertain what the conflict-of-law rules of the foreign state are.

Inapplicability of Renvoi in a False Conflict

US Restatement (Second) of Conflict of Laws: renvoi to be used when there is a disinterested forum, to ensure that only the laws advancing the policies of the inter-ested states will be applied. If the choice-of-law rules of the state to which reference is made refers the case back to the forum state, the court may use this situation to determine if both states have an interest in having their laws applied or if there is merely a false conflict.

Pfau vs. Trent Aluminum Co.(1970)

FACTS: Trent (a New Jersey domiciliary) agreed to drive Pfau (a Connecticut domiciliary) to Missouri. While in Iowa, they had a vehicular accident causing in-juries to Pfau. Pfau filed suit in New Jer-sey against Trent Aluminum Co. (regis-tered owner of the car) for the damages he sustained while a passenger in Trent’s car. The defense of Trent Alu-minum was that Iowa law is applicable, which provides that the host-driver is not

21


liable to his passenger-guest for ordinary negligence.

HELD: Connecticut and New Jersey law both allow passenger-guest recovery. It appears that Connecticut’s substantive law allowing a guest to recover form his host’s ordinary negligence would give it a significant interest in having that law applied to this case. Since Iowa has no interest in this litigation, and since the substantive laws of Connecticut and New Jersey are the same, this case presents a false conflict and the Connecticut plain-tiff should have the right to maintain an action for ordinary negligence in New Jer-sey.

Bellis vs. Bellis(1968)

FACTS: The probate of the will of Texas citizen and domiciliary Amos Bellis was opposed by his 3 illegitimate children in the Philippines for depriving them of their compulsory legitime. However, the trial court ruled that under Art. 16 of the Phil. Civil Code, the national law of the decedent is to be applied in testamen-tary succession. The law of Texas did not provide for legitimes.

HELD: Texas law should apply. The dece-dent was both a national and a domicil-iary of Texas, so that even assuming Texas has a conflict of law rule providing that the law of the domicile should gov-ern, the rule would not result in a refer-ence back (renvoi) to Philippine law, but would still refer to Texas law.

VIII. Notice and Proof of Foreign Law

A. Extent of Judicial Notice

It is the party whose cause of action or de-fense depended upon the foreign law who has the burden of proving the foreign law.

Foreign law is treated as a question of fact that should be properly pleaded and proved

In the Phils., judicial notice may be taken of a foreign law with which the court is evi-dently familiar. (Delgado vs. Republic) Such

familiarity may be because the law is gen-erally known such as American or Spanish Law from which Phil law was derived or the judge had previously ruled upon it in other cases.

In US, courts are allowed to take judicial knowledge of the law of sister states.

B. Proof of Foreign Law

Foreign law may be proved by presenting either of the ff:

1. an official publication of the law2. a copy of the law attested by the

officer having legal custody of the record or by his deputy. If the record is not kept in the Philip-pines, it must be accompanied with a certificate that such officer has the custody (by the consular officer of the Phil embassy in said state and authenticated by his seal of office)

Proof of documents executed abroad: any public document executed abroad to be used in the Phils must be duly authenti-cated by the Phil. consul attaching his con-sular seal

Depositions of non-residents in a foreign country: they may be taken—

1) on notice before a secretary of embassy or legation, consul gen-eral, consul, vice-consul, or con-sular agent of the Phils.

2) before such person or officer as may be appointed by commission or under letters rogatory.

3) before such person which the par-ties have stipulated in writing

PCIB vs. Escolin(1974)

FACTS: Case bet. the administrators of the estates of Hodges spouses. W’s ad-ministrator sought the application of Texas law. H’s administrator also used the Texas law but arrived at a different conclusion.

HELD: Case remanded for parties to present proof of the applicable Texas law. The question of what are the appli-cable laws of Texas is one of fact and not

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of law. Foreign laws may not be taken ju-dicial notice of & have to be proven like any other fact in dispute between the parties in any proceeding with the rare exception in instances when the laws are within the actual knowledge of the courts, such as when:

a. they are well and generally known

b. they have been actually ruled upon in other cases before it and none of the parties claim otherwise

In Re Estate of Johnson(1918)

FACTS: In the hearing for the probate of the will of J, alleged to be made in accor-dance with the laws of Illinois, TC judge took judicial notice of the said foreign law.

HELD: Trial court judge erred in taking judicial notice.

ο The judge cannot take judicial no-tice of the acts of the Legislative Department of US particularly the various laws of the American states.

ο Likewise, Phil. courts cannot take ju-dicial notice of the same under “matters of public knowledge”.

ο The proper rule is to require proof of the Statute whenever it is deter-minative of the issue/s in Phil. courts.

Effects of Failure to Plead and Prove For-eign Law

Forum court may:1. dismiss the case for inability to estab-

lish cause of action

2. apply law of the forum (courts con-clude that by failing to adduce proof, parties acquiesce to the application of the forum law since it is the basic law)

3. assume foreign law is the same as law of the forum (processual pre-sumption)

First approach: Dismiss the case

Walton vs. Arabian Oil Co.(1956)

FACTS: Walton, US citizen, was injured in Saudi Arabia. His complaint did not al-lege the Saudi Arabia law nor did he proved the same during the trial. TC ruled in favor of defendant as he did not take judicial notice of S. Arabian law.

HELD: Because of failure to prove the foreign law, plaintiff loses.Plaintiff has the burden of proving the law of Saudi Arabia from which he shall base his claim because under NewYork law, where action was instituted, lex loci delicti is the substantive la applied in tort cases.A court abuses its discretion under the New York Civil Practice Act if it takes ju-dicial notice of the foreign law when it is not pleaded esp. when the party who had the burden to prove the same has not assisted the court in judicially learn-ing it.

ο The applicable tort principles neces-sary to establish plaintiff’s claim are not rudimentary. In countries where common law does not prevail, these principles may not exist or maybe vastly different.

Second approach: apply forum law, con-clude that parties acquiesce to its applica-tion.

Leary vs. Gledhill(1951)

FACTS: Leary instituted this action in New Jersey to recover the loan con-tracted in France against G. G moved to dismiss on the ground that L’s proof were insufficient as there is no pleading or proof of the law of France where the transaction occurred.

HELD: L can recover despite failure to prove French law. Altho the court recog-nizes the fact that France adopts civil law rather than common law principles, the cause of action of L may still be pur-sued, as there are 3 presumptions that the court may apply in the CAB. These are:

1, French law is the same as law of the

forum

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2. French law, like all civilized countries, recognizes certain fundamental principles (taking of a loan creates obligation to repay)

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

The third presumption does not present any difficulties for it to be universally applied regardless of the nature of the controversy. This is more favored by the authorities and has been followed in Sturm v. Sturm.In CAB, Rights of the parties are to be determined by New Jersey laws which permit recovery on the facts proven.

Zalamea vs. CA(1993)

FACTS: Zalamea filed action for dam-ages against TWA. RTC awarded actual and moral damages. CA denied award of moral damages because there was no fining of bad faith and because over-booking was an allowed practice in US airlines.

HELD: CA was wrong. The US law or reg-ulation authorizing overbooking was not proved in accordance with our laws.ο TWA relied solely on the statement

of its agent that the Code of Fed. Regulations of Civil Aeronautics Board allows overbooking.

ο No official publication of the said code was presented as evidence.

Written law maybe evidenced by an official publication thereof or by a copy attested by the officer having legal custody of the record or by his deputy, accompanied by a certificate (made by a Phil. consular officer and authenticated by his seal of office) that such officer has legal custody.

Third approach: processual presumption

Miciano vs. Brimo(1924)

FACTS: Action for partition of estate of Brimo, a Turkish citizen. Oppositor claims that proposed partition is contrary to Turkish law but he failed to prove &

present evidence on the said Turkish law.

HELD: In the absence of evidence on for-eign law, they are to be presumed the same as those of the Phils. Oppositor, himself, acknowledges that the foreign law was not proven when he asked for opportunity to present evidence. He was granted ample opportunity to present competent evidence and there was no GAOD when the court refused to grant him another opportunity.

Suntay vs. Suntay(1952)

FACTS: A will executed in Amoy by the deceased is sought to be allowed in the Phils. The will was allegedly recorded and probated by a district court in Amoy.

HELD: Will cannot be allowed. Silvino was unable to adduce the necessary proof under Secs. 1-3 of Rule 78 in order to probate the will in the Philippines, specifically:a. the fact that the municipal court of

Amoy is a probate courtb. the procedural law of China regard-

ing probate of willsc. the legal requirements for the exe-

cution of a valid will

Although there were unverified answers of the Consul General of China, his an-swers are inadmissible because:a. he does not qualify as an expert on

Chinese law on probate procedure (usu. attend to trade matters), and

b. if admitted, the adverse party will be deprived of their right to cross-examine him

Thus, in the absence of proof, it may be presumed that the probate laws of China are the same as ours and the will in question does not comply with our pro-bate laws.

CIR vs. Fisher(1961)

FACTS: Spouses Stevenson are British subjects. H dies leaving W as sole heir. CIR assessed estate tax on the whole properties of the spouses because Eng-lish law does not recognize conjugal partnership.

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HELD: English law cannot be applied. The pertinent English law that allegedly vests in husband full ownership of properties acquired during the marriage was not proved by CIR (petitioner). In the ab-sence of proof, the Court is justified in in-dulging in “processual presumption” in presuming that the law of England on the matter is the same as our law.

Board of Commissioners vs. CID(1991)

FACTS: Board sought the deportation of G who is alleged to be an alien. Mar-riages of G’s grandfather and of G’s fa-ther all performed in China were not properly proven.

Only self-serving testimonies were al-legedly presented. Also, marriages are claimed to be void according to Chinese law.

HELD: In the absence of evidence to the contrary, foreign laws are presumed to be the same as those of the Phils. In CAB, there being no proof of Chinese law on marriage, the presumption arises. The Phils. adhere to the presumption of valid-ity of marriage (A.220 FC) He who as-serts the marriage is not valid under our laws bears the burden of proof to present the foreign law.

In deciding whether to apply forum law or to dismiss the case/rule against the party who failed to prove the foreign law, court must consider the ff: factors

a. degree of public interest involvedb. accessibility of foreign law materials

to the partiesc. possibility that plaintiff is merely fo-

rum shoppingd. similarities between forum law and

foreign law on the issue involved

C. Exceptions to the Application of Foreign Law

1) The foreign law is contrary to an important public policy of the fo-rum

2) The foreign law is procedural in nature

3) Issues are related to property (lex situs)

4) The issue involved in the enforce-ment of foreign claim is fiscal or administrative

5) Foreign law or judgment is con-trary to Good Morals

6) The application of Foreign law will work Undeniable Injustice to the Citizens of the Forum

7) The Foreign law is Penal in Char-acter

8) The application of the Foreign law might endanger the Vital Interests of the State

These exceptions fall under 3 main cate-gories:

1: when local law expressly so provides2: when there is failure to plead and prove the foreign law or judgment3: when the case falls under the excep-tions to the rule of comity

1. The foreign law is con-trary to an important pub-lic policy of the forum

“public policy”: no subject or citizen can lawfully commit any act which has a ten-dency to be injurious to the public or against the public good.

“public policy technique”: court declines to give due course to a claim existing under a foreign law because it considers the nature of the claim unconscionable or its enforce-ment will violate a fundamental principle of justice, good morals or some deep-rooted tradition.

dismissal on the ground of public policy is not dismissal on the merits and plaintiff can go elsewhere to file his claim.

Pakistan Intl Airlines v. Ople(1990)

FACTS: 2 Filipino stewardess-employees of PIA filed a case for illegal dismissal against their employer in DOLE. PIA’s de-fense is that under the contract of em-ployment, the parties agreed that the EE-ER relationship shall be governed by the contract (which provided that Pak-istan law shall apply) and not the Labor Code.

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HELD: Public Interest standard was ap-plied. Pakistan law cannot be invoked to prevent the application of Phil labor laws and regulations to the subject matter of the case. The ER-EE relationship is much affected with public interest, such that otherwise applicable Phil laws and regu-lations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship.Also, PIA did not undertake to plead and prove the contents of the Pakistan law on the matter; it must therefore be pre-sumed to be the same as applicable pro-visions of Phil law.

Criticisms: courts using public policy excep-tion can disregard the applicable law reached and replace it with forum law to arrive at its desired result without having to provide the rigorous legal analysis re-quired to explain the shift. Courts engage in “intolerable affectation of superior virtue”.

2. The foreign law is proce-dural in nature

Procedural or remedial laws are purely in-ternal matters peculiar only to the State. It would be impractical for the court to adopt the procedural machinery of another state such as rules on venue, forms and plead-ings. Any individual who submits himself to the jurisdiction of the law of the forum must follow the forum’s rules of procedure.

Problem: courts are tasked to characterize the problem as to whether it is substantive or procedural law which can be difficult at times, ex. If issue involves statute of limita-tions or statute of frauds

3. Issues are related to prop-erty (lex situs)

The universally-accepted rule is that as to immovable property, it is governed by the law of the place where it is located.

Phil Civil Code also applies lex situs to per-sonal property. It also applies to cases of sale, exchange, barter, mortgage or any other form of alienation of property.

WHY? 3 reasons:

a. land & its improvements are within the exclusive control of the State & its officials are the ones who can physically deal with them

b. following a policy-centered ap-proach, immovables are of great-est concern to the state in which they are situated

c. demands of certainty & conve-nience

4. The issue involved in the enforcement of foreign claim is fiscal or adminis-trative

State is not obliged to enforce the revenue law of another.

Revenue laws affect a state in matters as vital to its interests as penal laws. No court ought to hear a case which it cannot prose-cute without determining whether these laws are consonant with its own notions of what is proper.

Opposition to exception: person should not be permitted to escape his obligations in maintaining the government by crossing state lines.

5. Foreign law or judgment is contrary to Good Morals

“contra bonos mores” - acts having mis-chievous or pernicious consequences or against true principles of morality.

ex. Hiring for killing, bribery of public officials, marriage between ascendants and descendants

6. The application of Foreign law will work Undeniable Injustice to the Citizens of the Forum

7. The Foreign law is Penal in Character

Statute is not “penal” not by what the statute is called by the legislature but whether it appears, in its essential charac-ter and effect, a punishment of an offense against the public.

Penal statutes are all statutes which com-mand or prohibit certain acts, and establish

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penalties for their violation and even those which, without expressly prohibiting certain acts, impose a penalty upon their commis-sion. Revenue laws are not classed as pe-nal laws although there are authorities to the contrary.

This exception is partly remedied under the international law of extradition on the basis of jurisdictional cooperation and assis-tance.

8. The application of the For-eign law might endanger the Vital Interests of the State

PART THREE: PERSONAL LAW

IX. Nationality

A. Importance of a Personal Law

The individual’s nationality or domicile serves as permanent connection b/w indi-vidual & state. Thus, what is assigned him is a personal law allowing courts to exer-cise jd or determine the governing choice-of-law rule on a specific situation or trans-action involving him.

Personal law follows the individual. It gov-erns transactions affecting him most (mar-riage, divorce, legitimacy, capacity to con-tract).The need for personal law arose w/ Italian Medieval city states. Domicile was the only relevant basis for personal law. Law of nationality first used in Napoleon Code, then in Austrian Code, which said that laws concerning states & capacity gov-ern all cities irrespective of residence.

Merits & Demerits of Nationality as Per-sonal Law

Merits:1) used to establish link b/w indi-vidual & state, because laws of each state presumed to be made for an “ascertained population” .

-since laws considered physical, moral qualities of citizens, laws

should apply to citizens wherever they are

2) an individual’s nationality is eas-ily verifiable from documents.

Demerits:1) Problems arise with regard to:

a. stateless personsb. persons with multiple nationali-

tiesc. states w/ diverse legal systems

having no single national law

2) a person’s ties to his nation may be so attenuated if he has lived in another country.

- unreasonable for his national law to govern him if he has no shared sense of identity.

Importance of Nationality in the Philippines

Most civil law countries follow the national law theory.

Phil SC: Nationality law theory is a conflict of laws theory by virtue of which JD over the particular subject matter affecting a person, such as status of a natural born person, is determined by the latter’s na-tionality.

Art 15 CC expresses the nationality princi-ple.Art 15: “Laws relating to family rights & du-ties, or to status, condition & capacity of persons are binding upon citizens of the Philippines even though living abroad.”

This notion that a person’s private rights should be determined by his political alle-giance & not by his physical location, owes its origin to the awareness of national iden-tity born in the French revolution,

B. Determination of Nationality

Each state has prerogative to determine who are its nationals or citizens by its own municipal law.

The Hague Convention on Conflict of Na-tional laws: “It is for each state to deter-mine who are its nationals. This shall be recognized insofar as consistent w/ int’l.

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convention, int’l. customs, & the principles of law generally recognized w/ regard to nationality”.

Art 2. Hague Convention: Question on pos-session of nationality of a particular state “shall be determined in accordance w/ the law of that state.

Who are Filipino citizens? (Philippine Con-stitution, Art IV)

1) Those who are citizens of Philip-pines at time of the adoption of this Constitution

2) Those whose fathers or mothers are citizens of the Philippines

3) Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon reach-ing the age of majority; and

4) Those who are naturalized in ac-cordance w/ law

1. Natural-born Citizens

Two principles w/c may be followed:

jus soli: looks to the law of the place of one’s birth to determine one’s nationality (followed in many common law countries).

jus sanguinis: rule of descent or blood. Fol-lowed in the Philippines, articulated in the Constitution.

Natural born citizens: citizens of the Philip-pines from birth w/out having to perform any act to acquire or perfect citizenship.

Concept broadened by the Constitution to include “those born before January 17, 1973, of Filipino mothers, who elect Philip-pine citizenship upon reaching the age of majority”.

Talaroc vs. Uy(1952)

FACTS: Uy was elected mayor of Manti-cao, but one of the defeated candidates filed a petition for quo warranto, alleging that Uy was a Chinese citizen and there-fore ineligible for the office.

HELD: Uy is a Filipino citizen, following the citizenship of his mother, who reac-

quired her Filipino citizenship upon the death of her Spanish husband. A wife re-verts to her former status upon dissolu-tion of the marriage by the death of her husband, and where the widowed mother herself thus reacquired her for-mer nationality, her children (she being their natural guardian) should follow her nationality with the proviso that they may elect for themselves upon reaching majority.

Co vs. Electoral Tribunal of the House of Representatives

(1991)FACTS: Ong Jr. ran as representative of the 2nd district of Samar and was pro-claimed the winner. The losing candi-dates filed election protests, claiming that Ong Jr. was not a natural-born citi-zen.

HELD: Ong Jr. is a natural-born Filipino. He could not have been expected to have formally or in writing elected citi-zenship upon reaching majority, because he was already a citizen. His mother was a natural-born citizen, and his father was naturalized when Ong Jr. was only 9 years old. The filing of a sworn state-ment or formal declaration is a require-ment for those who still have to elect cit-izenship. For those already Filipinos when the time to elect came up, there are acts of deliberate choice which can-not be less binding. Election is both a for-mal and an informal process, and it has been held that participation in election exercises constitute a positive act of election of Philippine citizenship.

2. Citizens by Naturalization

Naturalization confers to an alien a nation-ality after birth by any means provided by the law.

In the Philippines, naturalization is by judi-cial method, under CA 473, as amended RA 530.

The naturalization process was relaxed un-der Marcos’ regime. Liberal method, sum-mary inquiry. This, however, is no longer in force.

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Qualifications for Applicants for Naturaliza-tion

1) Petitioner must not be less than 21 years of age on date of hear-ing of petition

2) He must have, as a rule, resided in the Philippines for a continuous period of not less than 10 years

o Why the 10 yr residence requirement?

So government can ob-serve applicant’s conduct & ensure he imbibes princi-ples & spirit of our Consti-tution.

o When may period be re-duced to 5 years?

a) applicant honorably held of-fice under the Phil gov’t. or under any of its political sub-divisions

b) applicant has established a new industry or introduced a useful invention in the Phil

c) Married to a Filipino womand) Engaged as teacher in a pub-

lic or recognized private school not for exclusive in-struction of children of per-sons w/ particular nationality in any of the branches of edu-cation for a period of 2 years

e) Born in the Philippines

3) Must be of good moral character, & believe in the principles underlying the Phil Constitution &

must have conducted himself in a proper & irreproachable manner during entire period of residence here in his relations w/ the constituted govern-ment as well as w/ the community in w/c he is living

o “Proper & irreproachable” imposes a higher stan-dard of morality than “good moral character”

o How to prove “irreproach-able conduct”? By compe-tent evidence such as tes-timony of 2 character wit-nesses well known in

community w/ high repu-tation for probity.

The law requires moral character of highest degree. Being merely a “law-abiding citizen is inadequate.

4) Must own real estate in the Phil worth not less than P5,000, Phil currency, or must have lucrative trade., profession, or lawful occu-pation

Yu Kian Chie vs. Republic(1965)

FACTS: Yu Kian Chie, a Chinese national, applied for naturalization, but the Solici-tor General opposed the petition on the ground that Yu failed to prove that he had a lucrative income.

HELD: The petition should be denied. His true income (outside of allowances and bonuses which are merely contingent) is only P150 a month, which amount does not come up to the category of lucrative, especially considering that he is a mar-ried man.

o What does “lucrative trade, profession, or lawful occupa-tion” mean?

Substantial gainful employment or the obtaining of tangible receipts

lucrative employment: appreciable margin of income over expenses in order to provide for adequate sup-port for himself & his family in case of sickness, unemployment, disabil-ity to work.

o Requirement of ownership of real property: At odds w/ Art XII, Sec. 7 Phil Constitution: “Save in cases of hereditary succession, no private lands shall be transferred or con-veyed except to individuals qualified to acquire or hold lands of the public domain.”

o Exceptions to prohibition on ownership of land:

a) Save in cases of heredi-tary succession, no private lands shall be transferred or conveyed except to individuals qualified to

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acquire or hold lands of the public domain - Testamentary succession is not covered by the exception provided in the Constitution.

b) Sec. 2, BP 185 allowing a natural-born citizen who lost his Fil-ipino citizenship to be a transferee of a private land for residential pur-poses (not in excess of 1,000 sq. m. urban or 1 ha rural land)

c) SC broadened exception to prohibition by applying In Pari Delicto doctrine, excluding from the ban the alien vendee who later becomes a naturalized Filipino

o Additional exceptions thru judicial decisions have been criticized for inviting violation of the Constitu-tion & disregarding a fundamental policy of allowing no one to reap benefits from an unlawful act.

5) Must be able to speak & write English or Spanish & any one of the principal Philippine languages

6) Must have enrolled his minor chil-dren of school age in any of the public schools or recognized pri-vate schools where Phil history, government & civics are taught or prescribed as part of curricu-lum during entire period of resi-dence required of him, prior to hearing of his petition for natural-ization as citizen.

o Children must learn & imbibe cus-toms, traditions & ideals of Fil-ipinos so they’ll become law-abid-ing citizenship.

o Compliance & affirmative show-ing…otherwise, denied.

o Non-compliance because of in-sufficient finances: denied.

Disqualification for Naturalization

General Rule: Burden of proving disqualifi-cation is upon the state.

But SC held that petitioner must prove he has none of disqualifications.

The law must be strictly construed against applicant because naturalization is a privi-lege, not a right.

Possible causes for Disqualification:1) crime involving moral turpitude (act

of bareness, vileness, depravity in private and social life in general; contrary to conduct of honesty, modesty or good morals)

2) if applicant does not deal with and receive Filipinos in his home and visit Filipino homes in a spirit of friendship and equality without dis-crimination

3) applicant’s conduct of keeping wife and children in a neighboring coun-try and only visiting them (lack of sincere desire to embrace Filipino customs and traditions)

4) if it is not fully established that appli-cant’s nation grants reciprocal rights to Filipino citizens

C. Procedure for Naturalization

The following are the steps for naturaliza-tion:

a) a declaration of intention to be-come a citizen must first be filed, unless the applicant is exempted from this requirement (Secs. 5 and 6, Com. Act No. 473).

b) The petition for naturalization must then be filed (Sec. 8, Com Act No. 473)

c) After publication in the Official Gazette or newspaper of general publication the petition will be heard (Sec. 9, Com. Act No. 473 as amended)

d) If the petition is approved, there will be a rehearing two years after the promulgation of the judgment awarding naturalization (Sec. 1, Rep., Act No. 530)

e) The last step will be the taking of the oath of allegiance to support and defend the Constitution and the laws of the Philippines (Sec. 11, Com. Act No. 473, amended)

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Declaration of Intention

When: One year before petition is filed With whom: File with office of the Solicitor

GeneralHow: Declaration under oath of bona fide intention to become Philippine citizen

Exemptions to Filing of Declaration of In-tention:

1) persons born in the Philippines and who have received their pri-mary and secondary education in public or private schools recog-nized by the Government, and not limited to any race or nationality

2) those who have resided continu-ously in the Philippines for a pe-riod of thirty years or more before filing their application

3) the widow and minor children of an alien who declared his inten-tion to become a citizen of the Philippines and dies before he is actually naturalized.

Requirement is mandatory, absolute pre-requisite to naturalization. Failure is fatal. Void for noncompliance with law.

Watt vs. Republic: In cases where petition is exempt, statement to his exemption and reasons should appear on the petition so the public maybe prepared to object to any evidence on this regard.

Which court has jurisdiction?RTC of province has exclusive jurisdiction on which petitioner has resided for at least one year immediately preceding filing of person.

Effect of Naturalization on Wife and Chil-dren

Section 15, C.A. 473 states that::“Any woman who is now or may hereafter be married to a citizen of the Philippines, and who might herself be lawfully natural-ized shall be deemed a citizen of the Philip-pines.

Minor children of persons naturalized under this law who have been born In the Philip-pines shall be considered citizens thereof.A foreign-born minor child, if in the Philip-pines at the time of naturalization of the parent, shall automatically become a Philippine citizen, and a foreign-born minor child, who is not in the Philippines at the time the parent is naturalized, shall be deemed a Philippines citizen only during his minority, unless he begins to reside permanently in the Philippines when still a minor, in which case, he will continue to be a Philippine citizen even after becoming of age.

A child born outside of the Philippines after the naturalization of his parent shall be considered a Philippine citizen, unless within one year after reaching the age of majority, he fails to register himself as a Philippine citizen at the American Con-sulate of the country where he resides, and to take the necessary oath of allegiance.”

Vivo vs. Cloribel(1968)

FACTS: Chinese wife, Chua and her mi-nor children arrived in the Phils from Hkong. Her husband applied for natural-ization in the Phils. Wife and children ap-plied for indefinite extension of stay. Sec of Foreign Affairs allowed the change of their status from temporary visitors to special non-immigrants for 2 years. Com-missioner of Immigration refused their extension. The Foreign Affairs Sec. de-nied their appeal and they were advised to leave the Phils. Chua filed action for mandamus to implement the first ruling of the Secretary but this was denied. Chua

HELD: The wife, under Sec. 15 of the Re-vised Naturalization Law, will not auto-matically become a Filipino citizen upon her husband’s naturalization as she must still show that she possesses all the qual-ifications and none of the disqualifica-tions for naturalization. But her having misrepresented that she will stay for a brief period but her intention was really to stay for a long time, demonstrated her incapacity to satisfy the qualifications under Sec. 2 which provides that she must be of good moral character and must have conducted herself in a proper

31


and irreproachable manner during the entire period of her stay. She also failed to satisfy the requirement of continuous residence for 10 years in the Philippines (actual stay: Oct. 16 ’60 – June ’62)

As to the children: The law requires that they must be dwelling in the Philippines at the time of the naturalization of the parent. Since prior to their father’s natu-ralization, they were already required to leave the country, they cannot be said to be lawfully residing here.

Also, they cannot be allowed to extend their stay. The period of stay of tempo-rary visitors cannot be extended without first departing form the Islands. They cannot also claim that they should be al-lowed extension until the father’s oath taking because their allowed stay was for a definite period up to a fixed day.

Moy Ya Lim vs. Commissioner of Im-migration

(1971)FACTS: In 1961, Lau, a Chinese, was per-mitted to stay in the Philippines for 1 month to visit her grandfather. After re-peated extensions, she was allowed to stay until Feb. 1962. However, on Jan. 1962 she married a Filipino. Commis-sioner ordered her to leave and sought her deportation. Spouses filed appeal in SC.

HELD: Under Sec. 15 of CA 473, an alien woman marrying a Filipino, native born or naturalized, becomes ipso facto a Fil-ipina provided she is not disqualified to be a citizen of the Phils under Sec. of the same law. Likewise, an alien woman married to an alien who is subsequently naturalized here follows the Philippine citizenship of her husband the moment he takes his oath as Filipino, provided, that she does not suffer from any of the disqualifications under Sec. 4.

This ruling reversed a prior decision of the SC (Burca vs. Republic) which held that the alien woman married to a Filipino must first file a petition for citizenship alleging that she possesses all the qualifications and none of the disqualifications mandated by law.

No Judicial Declaration of Philippine Citizen-ship

A declaration of Phil citizenship may not be granted in an action for declaratory relief nor under the Civil Code provision (Art. 412) on correction of entry in the Civil Reg-istry.

But the rule was relaxed in later decisions. A petition for correction of errors in the en-try of the Civil Registry even for a change of citizenship or status may be granted pro-vided that an appropriate action is made wherein all parties who may be affected by the entries are notified and represented and there is a full blown adversary pro-ceeding.

Tan Yu vs. Republic: There can be no action or proceeding for the judicial declaration of the citizenship of an individual.

D. Loss of Philippine Citizenship

CA 63, as amended by RA 106, provides that a Filipino citizen may lose his citizenship in any of the following ways:

1) Naturalization in foreign coun-tries

Frivaldo vs. COMELEC(1989)

FACTS: Frivaldo was elected governor of Sorsogon and assumed office. The League of Municipalities of Sorsogon filed for annulment of his election on the ground that he is a US citizen and there-for incapable of holding public office. Frivaldo admitted that he was a natural-ized US citizen in 1983 but he underwent naturalization only to protect himself from then Pres. Marcos. Sol Gen sup-ported respondent’s contention that he is a US citizen because he did not repa-triate himself after his naturalization in the US

HELD: Frivaldo lost his Filipino citizen-ship. If Frivaldo really wanted to disavow his US citizen citizenship & reacquire Phil. citizenship, he must do so under our laws. Under CA 63, Phil. citizenship may be reacquired through:

1. direct act of Congress2. naturalization3. repatriation

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The alleged forfeiture of US citizenship because of his active participation in the elections is between him and the US; it could not have resulted to automatically restoring his Filipino citizenship which he earlier renounced. At most, he could be said to be a stateless individual. Also, al-though the Special Committee to hear repatriation cases under LOI 270 has not yet been convened, F should have waited for such or seek naturalization by legislative or judicial process.

Frivaldo vs. COMELEC(1996)

FACTS: Frivaldo took his oath of alle-giance under PD 725 on June 30 ’95, much later than he filed his certificate of candidacy. He now claims Filipino citi-zenship through a valid repatriation

HELD: Frivaldo reacquired his Filipino cit-izenship and is now eligible to assume the office as governor. Law does not specify any particular date or time when candidate must possess citizenship un-like that of residence and age. It can also be said that Frivaldo’s repatriation retroacted to the date of his filing his ap-plication in Aug. 1994.

Labo vs. COMELEC(1989)

FACTS: Labo was elected mayor of Baguio. Lardizabal filed a petition for quo warranto alleging that Labo is not a citi-zen.COMELEC declared that he was a cit-izen but the CID ruled that he is not since the Australian Govt said that he is still a naturalized Australian citizen.

HELD: Labo is not a citizen of the Phils because he lost the same by performing the ff acts under CA 63:1. naturalization in a foreign country2. express renunciation of citizenship3. subscribing to an oath of allegiance

to support the Consti and laws of a foreign country.

Even if it is to be assumed that his natu-ralization was annulled because his mar-riage to an Australian was found to be bigamous, this does not automatically restore his citizenship. He must reac-quire it by direct act of Congress, by repatriation or by naturalization. None of these methods were done. Under PD

725, repatriation may be done by apply-ing with the Special Committee on Natu-ralization and if the application is ap-proved, applicant must make an oath of allegiance to the Republic of the Phils be-fore a certificate of registration is issued by the CID.

2) Express renunciation of citizen-ship

Aznar vs. COMELEC(1990)

FACTS: Osmeña filed a COC for provincial governor of Cebu but was declared ineli-gible (upon petition of Aznar) for being a US citizen, as shown by an Alien Certifi-cate of Registration. Osmeña alleges that he is a Filipino citizen being the child of a Filipino, holder of a Phil. passport, a resi-dent of the Phils. since birth, and a regis-tered voter.

HELD: Osmeña is a Filipino citizen. Aznar failed to present proof that O lost his citi-zenship by any of the modes under CA 63; he merely relied in the Alien Certifi-cate of Registration in concluding that O has been a naturalized US citizen. Phil. courts are only allowed to determine who are Filipino citizens, but have no power to determine who are persons considered as American citizens under US laws. Also, the mere fact that he has an ACR does not mean that he is no longer a Filipino; the renunciation needed to lose Phil. citizenship must be “express.”

3) By subscribing to an oath of alle-giance to support the constitution or laws of a foreign country upon attaining twenty one years of age or more, subject to certain excep-tions

4) by rendering service to, or ac-cepting 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 ple-nary pardon or amnesty has been granted

6) in the case of a woman, upon her marriage to a foreigner, if by

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virtue of the laws in force in her husband’s country, she acquires his nationality

7) cancellation of the certificate of naturalization

The Judge may cancel the naturalization certificate issued and the registration in the Civil Registry, upon motion made in proper proceedings by Sol Gen, on any of the following grounds:

a) if it shown that said naturalization certificate was obtained fraudu-lently or illegally;

b) if the person naturalized shall, w/in the 5 yrs next following the is-suance of said certificate, return to his native country or to some foreign country & establish his permanent residence there;

Provided that the fact that person natu-ralized remain for 1 year in his native country of former nationality, or 2 years in any country, shall be consid-ered as prima facie evidence of his in-tention of taking up his permanent resi-dence therein

c) If the petition was made on an in-valid declaration of intention

d) If it is shown that the minor chil-dren of the person failed to gradu-ate from recognized public or pri-vate high school where the re-quired subjects are taught, through the fault of the parents either by neglecting to support or by transferring them to another school.

Certified copy of decree canceling cer-tificate forwarded to the Office of the President & the Solicitor General.

e) If it is shown that the naturalized citizen allowed himself to be used as dummy in violation of the Con-stitution or law requiring Philip-pine citizenship as a requisite for exercise, use or enjoyment of a right, franchise or privilege.

Only a Grant of Political Privilege:

Judgment directing issuance of certificate of naturalization is a mere grant of political

privilege. Neither estoppel nor res judicata may be invoked to bar the state from initi-ating an action for cancellation or nullifica-tion of certificate of naturalization issued.

If shown to have been obtained by fraud or illegal means, the certificate may be can-celled. Decision in naturalization case does not constitute res judicata.

Republic vs. Li Yao(1992)

FACTS: Li Yao was a naturalized Filipino citizen, but the Sol Gen filed a petition to cancel his certificate of naturalization on the ground that he obtained such certifi-cate through fraudulent means. One of the grounds was tax evasion.

HELD: A certification of naturalization may be cancelled if it was subsequently discovered to have been obtained by misleading the court upon any material fact. And a naturalization proceeding is not a judicial adversary proceeding, such that a decision therein is not res judicata as to any matter that would support a judgment canceling a certificate of natu-ralization on the ground of illegal or fraudulent procurement thereof.

E. Problems in Applying the Nationality Principle

1. Dual or Multiple Citizen-ship

Each state determines who its nationals are in accordance w/ the rule in the Hague Convention on Conflict of National Laws.

Questions on WON a person possesses the nationality of a certain state are to be de-termined in accordance w/ the state’s in-ternal law.

It is possible that a person can be claimed as national of 2 or more states.

Situations w/c may result to dual national-ity: Application of jus soli & jus sanguinis

1) Child born of

o parents who are nationals of country applying jus sanguinis

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o in a country applying jus soli

has dual nationality

2) Filipino citizen who marries an alien may acquire citizenship of his or her spouse if the spouse’s na-tional law so allows.

But a Filipino citizen 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 tak-ing an oath of allegiance to the spouse’s country or by express renunciation.

3) Another instance of dual or mul-tiple nationality is the case of an in-dividual who is naturalized citizen of another state but has not effec-tively renounced his former nation-ality.

In determining rights of an individual who may claim multiple nationality in a third state, the ICJ applied principle of “effective nationality.”

Nottebohm Case(1955)

FACTS: Liechtenstein brought a case against Guatemala in the ICJ for breach of its obligations under international law and asking for reparations in behalf of Nottebohm. It is the position of Liechten-stein that Nottebohm acquired Liechten-stein citizenship which would entitle him to its diplomatic protection.

HELD: Liechtenstein is not entitled to ex-tend protection to Nottebohm, because when N applied for naturalization, there is nothing to indicate that such applica-tion was motivated by any desire to dis-sociate himself from the Government of his country, Germany. He had been set-tled in Guatemala for 34 years, and it was the main seat of his interests and business activities.

In contrast, his actual connections with Liechtenstein were extremely tenuous. No settled abode and no prolonged resi-dence at the time of application; the ap-plication shows that he was a mere visi-tor and his visit is of a transient charac-ter. There is an absence of any bond of attachment between N and L and, on the

other hand, the existence of a long-standing and close connection between him and G, a link which his naturalization in no way weakened.

Oh Hek How vs. Republic(1969)

FACTS: Oh Hek How, a Chinese citizen, applied for naturalization in the Philip-pines which was granted. A certificate of naturalization was issue in his favor but the Government appealed, claiming that it was issued before the Minister of the Interior of Nationalist China issued the permission for a valid renunciation of Chinese citizenship. Oh Hek How argues that such permission is not among the requirements under our law for the natu-ralization of an alien.

HELD: The permission of the Minister of the Interior of China is required before a certificate of naturalization can be issued in favor of Oh Hek How. The question of how a Chinese citizen may strip himself of that status is necessarily governed by the laws of China, not that of the Philip-pines. As a consequence, a Chinese na-tional cannot be naturalized as a citizen of the Philippines, unless he has com-plied with the laws of China requiring previous permission of its Minister of the Interior for renunciation of nationality.

2. Statelessness

Understood in two senses:

a) De jure stateless person: refers to an individual who has been stripped of his nationality by his own former government w/out having opportunity to acquire an-other.

Problem of statelessness began during WW II & worsened under Nazi regime in Germany & in USSR.

b) De facto stateless person: individ-ual possessed of a nationality but whose country does not give them protection outside their own territory.

- commonly called “refugees”.

Vietnam War: Masses of people escaped from Vietnam, Cambodia, and Laos without

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any travel documents, identity papers or any form of identification normally granted by government.

Conventions to Alleviate Problems of State-less Persons:

1) 1951 Geneva Convention on Status Refugees

-provided some basic rights of stateless persons

2) 1954 UN Conference on the Elimina-tion or Reduction of Future Stateless-ness

3) Convention on the Reduction of Statelessness

- enumerates conditions under w/c an individual would not lose his or her nation-ality upon the risk of becoming stateless should a new nationality not be proved: i.e. divorce, adoption, naturalization, expatria-tion.

Convention also prohibits states from de-priving nationals of identity:

1) as punishment or 2) as discriminatory instrument for

political, religious or ethnic rea-sons

Major objective: Remedy situation of chil-dren born w/out acquiring any nationality, i.e. when a child is born in a country follow-ing jus sanguinis principle of parents who are citizens of a jus soli country.

Convention mandates that:*jus sanguinis country grant its nationality to a person born w/in its territory if he would otherwise be stateless.

*jus soli country to extend its nationality to a person who would otherwise be consid-ered stateless when one of his parents is a citizen of the contracting state.

Kookooritchkin vs. Solicitor General(1948)

FACTS; Kookooritchkin, a native-born Russian who claims to be a stateless refugee, filed a petition for naturaliza-tion. The petition was granted, for which the SolGen appealed, saying that Kookooritchkin is not a stateless person.

HELD: K is a stateless person. His testi-mony, aside from being uncontradicted, is supported by the well-known fact that the ruthlessness of modern dictatorships has scattered throughout the world a large number of stateless refugees or displaced persons, without country and without flag. Knowing the history, nature and character of the Soviet dictatorship, it would be technically fastidious to re-quire further evidence of K’s claim that he is stateless than his testimony that he owes no allegiance to the Russian Com-munist government and, because he has been at war with it, he fled from Russia to permanently reside in the Philippines.

X. Domicile

A. Definition

Municipal law concept of domicile (Art. 50, CC):

natural persons: the place of habitual resi-dence juridical persons: determined by the law creating or recognizing it; and in its ab-sence shall be understood as the place where their legal representation or place of business is.

Conflict-of-laws definition of domicile (Re-statement): 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.

Justice Story: the place of true, fixed per-manent home and principal establishment, and to which, whenever he is absent, he has the intention of returning.

A person may live in a place where he is not domiciled. To acquire a domicile, there must be concurrence of 1) intention to make it one’s domicile and 2) physical presence.

“Residence” simply requires bodily pres-ence. It is a relatively more permanent abode of a person, while residence applies to a temporary stay of a person in a given place (Koh vs. CA).

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Notes!


Domicile is permanent in nature; it is not as transient and temporary as residence.

2 Requisites for domicile:1) physical presence2) intent – actual intent, not merely floating intent

✪ In order to establish new domicile, it is not necessary to prove intent to stay indefinitely, as long as the intent to abandon the old domicile is apparent.

✪ In domicile of choice, intent is im-portant

✪ In constructive domicile, there is no intent because the domicile is chosen by the law for the person

✪ The motive for leaving and the length of stay in the new domicile is not relevant in the determina-tion of domicile of choice

✪ Habitual residence: “bridge” be-tween residence and domicile

_______________

Caasi vs. CA(1990)

FACTS: Miguel ran for mayor of Bolinao and won. His opponent filed a petition for disqualification, alleging that Miguel is a green card holder and hence, a perma-nent resident of the US and not of Boli-nao.

HELD: Miguel’s possession of a green card disqualified him from running for mayor. His application for immigrant sta-tus and his possession of a green card are conclusive proof that he is a perma-nent resident of the US despite his occa-sional visits to the Philippines.

A candidate who is a green card holder must have waived his status as a perma-nent resident or immigrant of a foreign country in order to be qualified to run for elective office in the Philippines. In this case, there is no proof that he had waived his status as a permanent resi-dent or immigrant of the US before he ran for election as mayor of Bolinao; hence he was disqualified to run for that office.

Uytengsu vs. Republic(1954)

FACTS: Uytengsu was born in the Philip-pines of Chinese parents. He went to the US to study; but in one of his vacations in the Philippines he applied for natural-ization, during the pendency of which he returned to the US to finish his studies. Upon his return, his application was granted; the Government appealed the grant because under the law an appli-cant for naturalization is required to re-side continuously in the Phils. from the date of filing of the petition up to the time of his admission to Philippine citi-zenship. Uytengsu’s defense is that since he has been domiciled in the Philippines during the period of his application, he was also a resident for that period.

HELD: “Residence” and “domicile” each has, in strict legal parlance, a meaning distinct and different from each other. The essential distinction between resi-dent and domicile is this: the first in-volves the intent to leave when the pur-pose for which he has taken up abode ceases, while the other has no such in-tent, the abiding is animo manendi. They are not to be held synonymous; resi-dence is an act, while domicile is an act coupled with intent. The question of domicile is not involved in determining whether a person is a resident of a state or country.

B. Merits and Demerits of Domicile

Merits:

1) preferred primary connection be-tween a person and a state be-cause it satisfies the very purpose for having a personal law (in com-mon law countries) – it provides an adequate basis for him to exer-cise rights therein and the state to impose duties on him

2) also suitable for countries with a federal system of government – the law of the domicile is the law of the place where the individual lives

Demerits:

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1) one’s domicile is not ascertain-able without first resorting to the courts to establish whether or not there is animo manendi

2) the notion of domicile differs widely in different states (some distinguish between domicile and residence; others attribute differ-ent meanings of domicile for dif-ferent purposes)

3) if the law of domicile of origin is given overriding significance, it may create the problem of atten-uated connection (similar to the use of nationality as personal law)

The Philippines follow the nationality law theory, but there are instances when our courts refer to the domicile of an individual in order to determine his rights or obliga-tions. Example is

1) when the litigant is an alien whose country of origin follows the domiciliary principle; or

2) where the situation concerns state-less persons, or those with dual or multiple nationalities; or

3) when an alien domiciled in the Philippines executes a will abroad.

C. General Rules on Domicile

1) No person shall be without a domicile; his domicile of origin prevails until the acquisition of a new one.

2) A person cannot have two simul-taneous domiciles (a person can have only one domicile for a given purpose or a given time under the law of a particular state, but it should not be assumed that that determination will be binding on other states or on the same state for other purposes).

3) Domicile establishes a connection between a person and a particular territorial unit.

4) The burden of proving a change of domicile is upon whoever al-

leges that a change has been se-cured.

Romualdez-Marcos vs. COMELEC(1995)

FACTS: Imelda Marcos filed her Certifi-cate of Candidacy for representative of 1st District of Leyte. A petition to disqual-ify her was filed on the ground that she lacked the 1-yr resident requirement as provided for in the Constitution. In her COC, she placed “7 months” as length of residence.

HELD: For purposes of election law, resi-dence is synonymous with domicile. Mere absence of an individual from his permanent residence without the inten-tion to abandon it does not result in a loss or change of domicile.

While Marcos held various residences for different purposes during the past four decades, none of these purposes un-equivocally point to an intention to aban-don her domicile of origin in Tacloban, Leyte. She did not lose her domicile of origin upon her marriage to Pres. Mar-cos; what she gained was actual resi-dence.

Ujano vs. Republic(1966)

FACTS: Ujano was a naturalized US citi-zen who returned to the Philippines as a visitor and petitioned to reacquire Philip-pine citizenship. The petition was denied because he did not have the required residence.

HELD: Residence, for naturalization pur-poses, has been interpreted to mean the actual or constructive permanent home or domicile. He cannot be said to have established his domicile here although he is actually present because his al-lowed stay as a visitor is only temporary and he must leave when the purpose of his coming is done.

In re Dorrance’s Estate(1932)

FACTS: Dorrance was born in Pennsylva-nia. He worked and resided in New Jer-sey, transferred to Philadelphia and then

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returned to New Jersey. Later he was able to buy an estate in Pennsylvania, where he stayed with his family until his death. During his lifetime he expressed that he intends to remain a domiciliary of New Jersey. Pennsylvania assessed in-heritance tax on his estate.

HELD: He was domiciled in Pennsylvania at the time of his death. A man cannot retain a domicile in one place when he has moved to another, and intends to re-side there for the rest of his life, by any wish, declaration or intent inconsistent with the facts of where he actually lives and what he means to do.

D. Kinds of Domicile

3 Kinds of Domicile:

1) Domicile of origin: a person’s domicile at birth. A legitimate child’s domicile is that of his fa-ther, while an illegitimate child’s is that of his mother.

2) Domicile of choice: also called vol-untary domicile, is the place freely chosen by a person sui ju-ris. There must be concurrence of physical presence in the new place and unqualified intention to make that place one’s home.

A problem deciding the issue of domicile of choice is the degree of permanence of abode.

Difference between domicile of origin and domicile of choice: lies in a) conditions nec-essary for abandonment and b) capacity for revival.

Reverter or revival doctrine: presumption that domicile of origin revived once the domicile of choice is given up, before a new one is required.

Velilla vs. Posadas(1935)

FACTS: Velilla, the administrator of the estate of Moody, appealed the inheri-tance tax assessed against the estate on the ground that the decedent was not domiciled in the Philippines. Moody went to Calcutta and Paris before his death, and he died in India.

HELD: He was a domiciliary of Manila. Domicile in the Civil Code is defined as the place of habitual residence, which was Manila in the CAB. There was no statement from Moody, oral or written that he adopted a new domicile while he was absent from Manila. To establish abandonment, he must show his deliber-ate and provable choice of new domicile coupled with actual residence and de-clared or proved intent that it should be his permanent abode. This was not proven.

White vs. Tennant(1888)

FACTS: White and his wife lived in West Virginia, but agreed to sell their house there with the declaration, intent and purpose of making Pennsylvania their home. Upon reaching Penn., they had to go back to West Va. on account of the wife’s illness but White went to Penn. ev-eryday to look after his stock. Upon his death, the administrator paid the whole of the estate to the widow according to West Va. law. However, if Penn. law was applied, ½ of the estate would go to White’s siblings. The law of his domicile governs the distribution of his estate.

HELD: Pennsylvania was his domicile at the time of his death. Two things must concur to establish domicile—the fact of residence, and the intention of remain-ing. These two must exist in combina-tion. When one domicile is definitely abandoned, and a new one selected and entered upon, length of time is not im-portant; one day will be sufficient, pro-vided the animus exists.

3) Constructive domicile: domicile assigned to persons incapable of choosing their own domicile by operation of law. Includes minors, mentally disabled, married women.

Minors or infants are indubitably incapable of choosing their own domicile. Their domi-cile automatically changes when their fa-ther’s domicile changes. Minors take the domicile of their mother upon the death of their father.

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A person who has a mental disability is also assigned a constructive domicile. It is pre-sumed that a person with a mental disabil-ity cannot acquire a domicile of choice be-cause of his inherent inability to decide where to make his home.

Special Problems in Domicile of Choice vis-à-vis Constructive Domicile

1) domicile of people kept under physical or legal compulsion

2) domicile of married women seek-ing to acquire separate domicile from their husbands

People under Compulsion: traditional view is that he is in that place not as a result of his volition. Examples are military person-nel, prisoners and people with disabilities who are confined in institutions.

Caraballo vs. Republic(1962)

FACTS: Caraballo, an American staff sergeant in the US Air Force stationed in Clark Air Base, filed a petition for adop-tion of a Filipino child. The petition was denied on the ground that he was not qualified to adopt, him being a non-resi-dent alien.

HELD: Actual or physical presence or stay of a person in a place, not of his free and voluntary choice and without in-tent to remain there indefinitely, does not make him a resident of the place. Caraballo is disqualified to adopt be-cause he is a non-resident alien. His stay in the Philippines is only temporary, and is merely the result of his assignment as staff sergeant.

In recent decisions, courts have held that a person under compulsion should not be barred from proving that he has developed the required unqualified intention to estab-lish his permanent abode in such place. The fact of compulsion is reduced to just one of the factors in determining whether intent, in fact, exists.

Married Women: based on the concept of unity of identity of spouses, the wife was presumed to take the domicile of the hus-band.

Go Chen and Go Lek vs. Collector of Customs(1932)

FACTS: Tan Bon, a Chinese citizen, en-tered the Philippines as the wife of a Chi-nese merchant. She asked her minor children from a previous marriage to join her here, but they were not allowed en-try.

HELD: The minor children cannot enter the Philippines. A Chinaman’s Chinese wife and her minor children do not enter the Philippine Islands through their own right, but by virtue of the right of the husband and father. Since Tan Bon did not enter the Philippines by her own right but by virtue of her husband, she is not entitled to bring in her minor children by another Chinaman who never had le-gal residence in the Archipelago. The mere fact of their being children of Tan Bon confers on them no right of entry, inasmuch as she herself did not enter of her own right, and they cannot base their right on hers.

De La Vina vs. Villareal and Geopano(1920)

FACTS: Geopano filed a complaint in CFI Iloilo against de la Vina, her husband, for divorce on the ground of infidelity. De la Vina opposed, saying that CFI Iloilo has no JD over the case considering that he resides in Negros, such that Geopano must also be considered a Negros resi-dent, because the domicile of the wife follows that of the husband.

HELD: CFI Iloilo has JD. Where the hus-band has given cause for divorce, the wife may acquire another and separate domicile from that of her husband.

*There are exceptions to the rule that the domicile of the wife is determined by that of her husband, one of which is that the wife may acquire another and sepa-rate domicile from that of her husband where the theoretical unity of husband and wife is dissolved, as it is by the insti-tution of divorce proceedings; or where the husband has given cause for divorce; or where there is a separation of the par-ties by agreement, or a permanent sepa-

40


ration due to desertion of the wife by the husband or attributable to cruel treat-ment on the part of the husband; or where there is a forfeiture by the wife of the benefit of the husband’s domicile.

Modern view (married women): dispenses with the presumption that the wife’s domi-cile is the same as her husband’s. Each party establishes his or her own domicile completely independent of each other. As a result, the wife need not show that her hus-band has given cause for divorce or legal separation to have a separate domicile.

XI. Principles on Personal Status and Ca-pacity

A. Definition

Personal capacity

ο Includes both condition and ca-pacity

ο Embraces matters as the begin-ning and end of personality, ca-pacity to have rights, capacity to engage in legal transactions, pro-tection of personal interests, fam-ily relations, also transactions of family law such as marriage, di-vorce, separation, adoption, legiti-mation and emancipation, and succession.

Juridical capacity: fitness of a man to be the subject of legal relations

Capacity to Act: power to do acts with legal effects

ART. 37, Civil Code:Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every natural person and is lost only through death. Capacity to act, which is the power to do acts with legal effect, is ac-quired and may be lost.

In case of Filipinos, Art. 15 of the CC states that personal status and capacity follows the nationality principle.

In case of aliens, courts may refer to their national law or domiciliary law.

Recto vs. Harden(1959)

FACTS: H engaged the services of R, as counsel in her suit against her husband for support and for preservation of her rights in the conjugal partnership in con-templation of a divorce suit. However, the spouses entered into a compromise agreement to defeat the claim of R in at-torney’s fees. H moved to dismiss on the ground of invalidity of the contract of service because divorce is contrary to Phil law.

HELD: R should be paid his fees. H spouses are US citizens and their status and the dissolution thereof are governed by the laws of the United States, which sanction divorce. Therefore, contract is not contrary to public policy.

B. Legislative Jurisdiction Distin-guished from Judicial Jurisdiction

Status once established by the personal law of the party, is given universal recogni-tion.

Status, capacity, and rights and duties, brought into existence by State A and con-ferred in a natural or juridical person under its jurisdiction, should be recognized by State B, without any exception or qualifica-tion imposed by the latter, except by some definite or protected rule of municipal law.

- Aliens can sue and be sued in our courts even on issues relating to sta-tus and capacity. However, the appli-cable law is their personal law.

Barnuevo vs. Fuster(1913)

FACTS: Fuster and Yanez separated. Af-ter 10 years, Y filed for divorce on the ground of F’s adultery. Court granted de-cree of divorce. Fuster contests jurisdic-tion of the court to issue the said decree.

HELD: Phil court has jurisdiction. The au-thority and jurisdiction of courts are not a matter of private law of persons but of the public or political law of the nation. The jurisdiction of courts and other mat-ters of procedure are of public nature

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and are submitted to the territorial prin-ciple.

Note: The doctrine is no longer controlling. Divorce is considered a violation of public policy so that courts cannot issue the same.

C. Beginning and End of Personality

The determination of the exact moment personality begins is referred to the indi-vidual’s personal law.

Art. 40, CCBirth determines personality; but the con-ceived child shall be considered born for all purposes that are favorable to it, provided it be born later with the conditions speci-fied in the following article.

Art. 41, CCFor civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother’s womb. How-ever, if the fetus had an intra-uterine life of less than 7 months, it is not deemed born if it dies within 24 hours after its complete delivery from the maternal womb

Geluz vs. CA: SC did not allow for recovery of damages for the injury and death of a conceived child which is still in the mother’s womb. Art. 40 cannot be invoked since it expressly limits the provisional per-sonality by imposing the condition that the child should be subsequently born alive.Civil personality is commenced at birth and is extinguished by death. A declaration of death issued by a competent court is con-sidered valid for all purposes.

Limjoco vs. Intestate Estate of Fragante: HELD: SC ruled that the estate of a de-ceased applicant can be granted a CPC to avoid injustice or prejudice resulting from the impossibility of exercising such legal rights & fulfilling such legal obliga-tions of the decedent as survived after his death unless the legal fiction, that the estate is considered a person, is in-dulged.

D. Absence

The domestic laws of states do not treat absentees alike.

Three ways of dealing with the problem:

1. there is a rebuttable presumption that a person is dead after he has been absent for a number of years

2. a person’s unexplained absence is ju-dicially investigated and established which results in legal effects similar to those of death

3. a judicial decree shall have to be is-sued declaring a person dead before legal effects of death can take place

*Phil law follows the rebuttable presump-tion (1).

Art. 390, CCAfter the absence of 7 years, it being un-known whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession.

The absentee shall not be presumed dead for the purpose of opening his succession till after the absence of 10 years. If he dis-appeared after the age of 75 years, an ab-sence of 5 years shall be sufficient in order that his succession may be opened.

Art. 391, CC

The ff. shall be presumed dead for all pur-poses, including the division of estate among the heirs:(1) a person on board a vessel lost during

sea voyage, or an airplane which is missing, who has not been heard of for 4 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 miss-ing for 4 years

(3) A person who has been in the danger of death under other circumstances and his existence has not been known for 4 years

However, for specific purposes, our laws re-quire that a declaration of death be issued before certain legal effects of death arise ex. Contracting a subsequent marriage but the periods are reduced to 2 years.

The legal effects of absence and restric-tions on his capacity are determined by his personal law.

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E. Name

A person’s name is determined by law and cannot be changed without judicial inter-vention.(Art. 376, CC) Case law shows that courts have allowed petitions on grounds that the name—

1. is ridiculous or tainted with dishonor or extremely difficult to pronounce

2. when the change is necessary to avoid confusion

3. when the right to a new name is a consequence of change in status

4. a sincere desire to adopt a Filipino name to erase signs of a former alien nationality which unduly hamper so-cial and business life

Confusion as to one’s paternity has been held to justify the court’s denial of a peti-tion for change of name.

Whether an alien’s change of name is valid depends solely on his personal law.

F. Age of Majority

The legal disability and rights attached to minority are aspects of personal status. It is the individual’s personal law which de-termines whether he has reached the age of majority.

RA 6809 lowered the age of majority from 21 – 18 years but parental consent for con-tracting marriage is still required until the age of 21.

G. Capacity

A person’s ability to act is governed by his personal law. Rules on capacity of an indi-vidual to bind himself by contract with other persons or by unilateral acts are the very core of the rules that identify his legal position. The incapacities attached to his legal status go with him wherever he is.

The general rule on capacity is subject to several exceptions. These include liability in tort, which is subject to the law of the place of the tort and the restrictions on the contracting capacity of a married woman.

Insular Government vs. Frank(1909)

FACTS: Insular Govt entered into an em-ployment contract with Frank in Illinois when he was still a minor under Phil law but not under Illinois law. Frank breached the contract so IG sued him.

HELD: Illinois law should apply. Matters bearing upon the execution, interpreta-tion and validity of a contract are deter-mined by the law of the place where the contract is made.

This case should have been resolved as a capacity case instead of as a contract case (characterization).

PART FOUR: CHOICE OF LAW PROBLEMS

XII. Choice of Law in Family Relations

Man & woman may decide to marry in a country other than that of their nationality & come home. Issue of validity of marriage & legal consequences may be raised (Legal consequences such as personal & property relations, status & rights of children, use of surname & right to inherit).

Family law is an area of substantive law which reflects strong policies of state often based on values highly held by society. Family relations give rise to grave individ-ual & societal concerns.

A. Marriage

Family Code Definition:Art 1. “Marriage is a special contract of per-manent union b/w man & woman entered into in accordance w/ law for the establish-ment of conjugal & family life.

It is the foundation of the family & an invio-lable social institution whose nature, con-sequences & incidents are governed by law & not subject to stipulation except that marriage settlements may fix property re-lations during the marriage w/in limits pro-vided by this Code.”

Juxtaposed w/ Art15 CC, w/c states that questions on family rights, duties, status, conditions & capacity are governed by lex

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Notes!


nationalii, the importance of such definition is realized.

Marriage is a special contract as distin-guished from an ordinary contract:

1) entered into by a man & a woman2) both at least 18 years of age3) solemnized by a person specifi-

cally authorized by law4) a permanent union unless one

party dies, or marriage is annulled or declared void in special circum-stances

5) cannot be abrogated, amended or terminated by one or both parties at will

6) nature & consequences as well as incidents are governed by law & not subject to stipulation by par-ties unlike ordinary contracts

7) violation of marital obligations may give rise to penal or civil sanctions while breach of condi-tions of ordinary contract can be ground for an action for damages

1. Philippine Policy on Mar-riage and the Family

Art XV. Sec. 2: Marriage as an inviolable so-cial institution, is the foundation of the family & shall be protected by the state.

Presumption of validity: The Philippines es-tablishes a presumption of validity to give stability to marriage especially in Conflicts of Law problems.

Art 220. CC. In case of doubt, all presump-tions favor the solidarity of the family. Thus every intendment of law or facts lean to-ward the validity of marriage, the indissolu-bility of marriage bonds, legitimacy of chil-dren, the community of property during marriage…

Goal: Guide courts, strengthen family, & emphasize state interest in its preservation

2. Extrinsic Validity of Marriage

This is governed by lex loci celebrationis.

Extrinsic validity covers questions on for-malities or external conduct required of parties for legally valid marriage.

Art 2. Hague Convention on Celebration & Recognition of Validity of Marriages: Formal

requirements governed by law of state of celebration.General rule: All states recognize as valid marriages celebrated in foreign countries if the formalities prescribed there were com-plied with.

PHILIPPINES, Formal Requirements of Mar-riage

Art 3. FC sets the ff requirements:

1) Authority of solemnizing officer2) Valid marriage license except in

cases provided in Ch 2 of this title3) Mariage ceremony w/c takes

place w/ the appearance of con-tracting parties before the solem-nizing officer & their personal dec-laration that they take each other as husband & wife in the presence of not less than 2 witnesses of le-gal age

Lex Loci Celebrationis (expressed in Art 26 FC): “All marriages solemnized outside the Philippines in accordance w/ the laws in force in the country where they were sol-emnized, and valid there as such, shall also be valid in this country…”

Adong vs. Cheong Seng Gee(1922)

FACTS: The late Cheong Boo’s estate is being claimed by Cheong Seng Gee, who says that he is the legitimate child of the decedent with Tan Dit, whom the dece-dent allegedly married in China.

HELD: The validity of the Chinese mar-riage cannot be recognized. There is no competent testimony what the laws of China in the Province of Amoy concern-ing marriage were in 1895. There is lack-ing proof so clear, strong and unequivo-cal to produce a moral conviction of the existence of the alleged Chinese mar-riage.

People vs. Mora Dumpo(1935)

FACTS: Dumpo married Hassan, and then married Sabdapal without having her previous marriage annulled. As a de-fense to an allegation of bigamy, Dumpo claimed that her 2nd marriage was void

44


because her father did not consent thereto.

HELD: Dumpo is not guilty of bigamy. The 2nd marriage was null and void be-cause the consent of her father was not obtained. It is an essential element of bigamy that the alleged 2nd marriage, having all the essential requisites, would be valid were it not for the existence of the first.

Wong Woo Yu vs. Vivo(1935)

FACTS: Wong Woo Yu alleged before the Board of Special Inquiry that she was al-legedly married to a Filipino, Blas, in a ceremony in China. The new Board or-dered Wong to be excluded from the country, on the ground that her marriage to Blas was bereft of substantial proof.

HELD: Wong should be excluded. Art.15 of our Civil Code provides that the laws relating to family rights or to the status of persons are binding upon Philippine citizens, though living abroad. Even if the marriage of Wong to Blas before a vil-lage leader is valid in China, the same is not one of those authorized in our coun-try. Under Sec. 4 of Gen. Orders 68 (now Art. 71 CC), a marriage contracted out-side the Philippines which is valid under the law of the country in which it was celebrated is also valid here; but there was no proof presented on the applicable law of China. Therefore it may be pre-sumed to be the same as our law.

Apt vs. Apt(1947)

FACTS: The marriage of the Apts (both Germans) was celebrated in Argentina by proxy. The wife, a domiciliary of Eng-land, filed a petition for the nullification of their marriage on the ground that proxy marriages are not valid in England. It is, however, valid in Argentina.

HELD: The marriage is valid. The English law on marriage is locus regis actum. If a marriage is good by the laws of the country where it is effected, it is good all the world over, no matter whether the

proceeding or ceremony which consti-tuted marriage according to the law of the place would or would not constitute marriage in the country of domicile of one or other of the spouses. Since the marriage was performed in Buenos Aires and in accordance with its laws, and since proxy marriage is only a form of the ceremony and not an essential requi-site, the marriage should be upheld.

Exceptions to Lex Loci celebrationis: The Civil Code (Art 71) enumerates bigamous, polygamous or incestuous marriages as ex-ceptions to the lex loci celebrationis rule.

The Family Code (Art 26) widens these ex-ceptions.

A foreign marriage although valid in the foreign country where it was entered into will be void in the Philippines if:

1) either or both parties are below 18

2) it is bigamous or polygamous3) a subsequent marriage is per-

formed w/out recording in the Civil Registry & registry of Proper-ties the judgment of annulment or declaration of nullity of first mar-riage, the partition o& distribution of the properties of the spouses & the delivery of presumptive le-gitimes

4) there was a mistake as to identity of the contracting party

5) one of the contracting parties was psychologically incapacitated to comply with the essential marital obligations

6) the marriage is incestuous 7) marriage is void by reason of pub-

lic policy

Note that the exceptions put in issue the parties’ capacity to enter into marrriage, thus, relating to a substantive requirement. Since the personal law of the parties gov-erns questions of intrinsic validity of mar-riages b/w Filipinos abroad, the above enu-merations are exceptions to the lex loci celebrationis precisely because they are controlled by lex nationalii.

3. Intrinsic Validity of Marriage

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Intrinsic requirements refer to capacity or general ability of a person to marry, for in-stances defined by requirements of age & parental consent, but it does not refer clearly to an individual’s being permitted to marry a specific person or person of a de-terminate class.

What law controls intrinsic requirements?

The parties’ personal laws—either domicile or nationality. Municipal laws of each state provides sub-stantive requirements of marriage.

Philippine Law sets the following substan-tive or essential requisites:

1) Legal capacity: must be 18 years of age & not barred by any im-pediment to marry each other

2) Consent freely given: in the pres-ence of an authorized solemnizing officer

Matrimonial consent: Parties are, at least, not ignorant that the marriage is a perma-nent union.

Mixed marriages: the law that governs sub-stantive validity is national law of parties.

Art 38. FC.: Though valid in a foreign coun-try certain marriages may be void in the Philippines on grounds of public policy, such as the ff:

1) b/w collateral blood relatives, whether legitimate or illegitimate up to the 4th civil degree

2) b/w step-parents & stepchildren3) b/w parents-in-law & children-in-

law4) b/w adopting parent & adopted

child5) b/w surviving spouse of adopting

parent & adopted child6) b/w surviving spouse of adopted

child & adopter7) b/w adopted child & legitimate

child of adopter8) b/w adopted children of same

adopter9) b/w parties where one, w/ inten-

tion to marry the other, killed the person’s spouse or his or her own spouse

Marriages Between First Cousins:

Marriage of 1st cousins is no longer incestu-ous but still void ab initio on the ground of public policy.

It is submitted that our prohibition against marriage of 1st cousins be limited only to Filipino nationals because many countries allow such marriages.

Marriages b/w foreigners whose national laws allow marriage of 1st cousins should be considered as valid in the Phil under the principle that the lex nationalii controls ca-pacity & presumption in favor of validity of marriage, as expressed in Art 220.

Hague Convention on validity of Marriages allows a contracting state to refuse recog-nition of the marriage if:

1) one of spouses was already mar-ried (unless marriage has subse-quently become valid by virtue of dissolution or annulment of previ-ous marriage)

2) spouses were related to one an-other by blood or by adoption, in the direct line or as brother or sis-ter

3) one of spouses had not attained the minimum age required for marriage nor acquired the neces-sary dispensation

4) one of the spouses did not have the mental capacity to consent

5) one of the spouses did not freely consent to the marriage

Sottomayor vs. de Barros(1877)

FACTS: Sottomayor and de Barros are both Portuguese and first cousins. Under Por-tuguese law they are incapable of contract-ing marriage. They were married in Lon-don. Sottomayor filed a petition to have the marriage declared invalid.

HELD: The marriage is invalid. The law of a country where marriage is solemnized must decide all questions relating to the validity of the ceremony by which the mar-riage is alleged to have been constituted; but as regards questions on personal ca-pacity, it must depend on the law of the

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domicile, and if the laws of any country prohibit its subjects within certain degrees of consanguinity from contracting marriage and treats such as incestuous, this imposes on the subjects a personal incapacity which continues to affect them so long as they are domiciled in said country and renders such marriage invalid wherever it may have been solemnized.

In re May’s Estate(1920)

FACTS: Fannie is Sam’s niece by half blood; they are both Jewish and NY resi-dents. NY prohibits marriage between uncle and niece, so they went to Rhode Island, where such marriage is also pro-hibited except where the parties are Jew-ish (the Jewish faith allow such mar-riages). After the ceremony they went back to NY to live there.

HELD: The marriage is valid. The legality of a marriage between persons sui juris is to be determined by the law of the place where it is celebrated. The general principle is that the rights dependent upon nuptial contracts are to be deter-mined by the lex loci, subject to 2 excep-tions: 1) cases within the prohibition of positive law, and 2) cases involving polygamy or incest in a degree regarded generally as within the prohibition of nat-ural law. As to the first exception, there is no “positive law” in New York which serves to interdict the marriage in Rhode Island of Sam and Fannie, and as to the second exception, their marriage was not offensive to the public sense of morality, it being allowed by the Jewish faith.

Instances Where Recognition of Validity of Marriage May be Withheld:

Christianity prohibits polygamous & inces-tuous marriages but care must be taken to confine doctrine to cases deemed incestu-ous by general consent of all Christendom.

The state may resort to ultimate escape device- contravention of a public policy to w/hold recognition of validity of a foreign marriage.

Rule: Marriages manifestly incompatible with the ordre public of the state of nation-ality of parties may be refused recognition.

However, commentators argue that when the non/existence of marriage is merely a preliminary Q arising incidentally in a case involving an issue not profaning mores of forum (such as tax, property or succession law) the rule above should not be applied. In ReDalip Singh: two women claimed that they were lawfully wedded wives of Singh, a native of India who died intestate in Cali-fornia. They claim to have been lawfully married to him in India over 50 yrs ago while domiciled there in accordance w/ law of the Jat community.

Under California laws, only 1st wife recog-nized as legal widow. Wives argue that the polygamous marriages should be held valid on strength of Art 63 CC: “All marriages contracted w//out the state, w/c would be valid by the laws of the country in w/c the same were contracted are valid in this state”.

Court, citing English & American cases: Polygamous marriages can be recognized in English law “so as to confer on the ‘wives’ the status of a wife for the purposes of Sec. 10 of British Nationality & Status of Aliens Act or for purposes of succession, & upon the children the status of legitimacy. Marriages Celebrated by a Consular OfficialArt. 9 of the relevant Hague convention: Marriage celebrated by a diplomatic agent or consular official in accordance with his state law shall be considered valid as long as it is not prohibited by the state of cele-bration

Philippine law: Marriage of Filipino nation-als shall be officiated by Philippine consul general, consul or vice consul (in w/c case the formal & extrinsic requirements of a valid marriage license & due publication & registration under Philippine law have to be complied with).

This is said to apply to marriage b/w Fil-ipino national & an alien provided the alien complies with marriage requisites under his/her national law.

Additional requirements for:

1) aliens - submission of a certificate of legal capacity to contract mar-riage issued by diplomatic/con-sular office

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2) stateless persons or refugees- submission of affidavit stating cir-cumstances showing legal capac-ity to contract marriage

4. Effects of Marriage

Personal Relations between the Spouses

These include mutual support, fidelity, re-spect, cohabitation & right of wife to use husband’s family name)

What is the governing law? National law of parties

If spouses are of different nationalities, generally, the husband’s national law may prevail as long as it is not contrary to law, customs, & good morals of the forum.

Art 69 Family Code: Husband & wife have the right to fix family domicile.

• Court, for compelling reasons, may exempt spouse from living with the other.

Djumantan vs. Domingo: Filipino marries Indonesian. They go to Philippines w/ inten-tion of staying here permanently. Subject of petition: Effect of marriage on wife’s right to stay in the Philippines.

There is no law guaranteeing aliens mar-ried to Filipino citizens the right to be ad-mitted, much less to be given permanent residency, in the Philippines.

“The fact of marriage by an alien to a citi-zen does not withdraw her from operation of immigration laws governing admission & exclusion of aliens. Marriage of an alien woman to Filipino citizen does not ipso facto make her a Filipino citizen & does not excuse her from her failure to depart from the country upon expiration of her ex-tended stay here as alien”.

Restatement 2nd: The wife who lives w/ her husband has the same domicile as his un-less special circumstances of wife make such result unreasonable.

But, in Ch VIII on Domicile, some legal au-thorities consider the assignment of con-structive domicile to the wife as invidious discrimination on basis of gender.

Property Relations of Spouses

Hague Conventions on law Applicable to Matrimonial Property: The internal law des-ignated by spouses before marriage or in absence thereof the internal law of state in w/c both spouses fix their habitual resi-dence is the governing law on matrimonial property regimes.

Art 80. Family Code: In the absence of a contrary stipulation in a marriage settle-ment, property relations of spouses shall be governed by Philippine laws, regardless of the place of the celebration of the mar-riage & their residence.

This rule shall not apply:

1) If both spouses are aliens

2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines & exe-cuted in the country where the property is located

3) With respect to the extrinsic validity of contracts entered into in the Phil but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity

Art 80 generally follows lex rei sitae. What law will govern the property relations of spouses where one is a Filipino citizen 7 the other a foreigner? It would still be gov-erned by Philippine law. Change of nationality after MarriageIf one or both spouses change nationality subsequent to marriage, property regime remains unchanged because of principle of immutability.

Hague Convention on Matrimonial Property Regimes. Art 7: The applicable law contin-ues notwithstanding any change of their nationality or habitual residence.

extrinsic validity: refers to formal requi-sites, apply lex loci celebrationis

intrinsic validity: refers to essential requi-sites, apply personal law of the parties

✪ In Adong and Wong Woo Yu, the Court did not apply the Philippine policy of presumption of validity of marriage.

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Notes!


✪ Question: is a proxy marriage be-tween Filipinos in a state allowing such marriages valid? Pangalan-gan: Yes, because it is merely a formal requisite (lex loci celebra-tionis apply)

________________

B. Divorce and Separation

Divorce: Absolute or Limited

Absolute: termination of legal relationship b/w spouses by an act of law.

Limited: (Legal separation) separation form bed & board w/c does not effect the disso-lution of marital ties. But it modifies the incidents of marriage by relieving spouses of duty of living w// each other.

This does not necessarily affect economic rights & duties since the court may order one to provide for support. For such pur-pose, it is essential that court has JD over respondent spouse & the property sought to be affected by decree.

Local law governs legal consequences of divorce of spouses, nationals of same coun-try, who marry, are domiciled & divorce.

If any of above factors connected to an-other state… conflicts problem arises.

Divorce jurisdiction:

Basis of JD of some countries: Domicile of one of the parties or matrimonial domicile

Ratio: Divorce, being a matter of state concern, should be controlled by “law of place w/ w/c person is most intimately con-cerned, place where he dwells.

Due process requires that forum court have a substantive contact w/ the relationship w/c it will decide won to dissolve.

Hague Convention Relating to Divorce & Separation: The granting of divorce or sep-aration must comply w/ the national law of spouses & the law of the place where the application for divorce is made.

Some laws in PRiL have made

1) the right to separation or divorce depend on the national law of the spouses &

2) grounds for divorce subject to law of forum

provided the parties were domiciled there.

Grounds for divorce are dictated by lex fori. Thus, many states refuse to recognize for-eign grounds for divorce unless it corre-sponds w/ a ground justified by forum law. This is followed whether the traditional or policy centered choice of law approach is used.

1. Divorce decrees obtained by Filipinos

Divorce decrees obtained abroad have no validity, not recognized in Philippine juris-diction.

BUT a marriage b/w a Filipino & a foreigner is susceptible to divorce if the divorce was validly obtained by the alien spouse (Art 26 par 2).

Effects:1. alien is capacitated to remarry2. Filipino spouse shall likewise have

the capacity to remarry under Philippine law

Effect of Provision (Art 26): partial recogni-tion in the Phil of absolute divorce.

o note: Divorce should be obtained only by alien spouse. Otherwise, Art 26 is inapplicable.

o Provision is to remedy the uneven status of Filipino nationals whose alien spouses obtained divorce abroad & remarried while the Fil-ipino spouse remained married to them in eyes of Philippine law.

Tenchavez vs. Escaño(1965)

FACTS: Vicenta and Pastor were married without the knowledge of her parents. Vi-centa went to the US to obtain a divorce, which was granted by the Nevada Court; she married an American and subse-quently acquired American citizenship. Pastor sued Vicenta for legal separation

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and damages. Vicenta’s defense is that there was a valid divorce issued by the Nevada court.

HELD: The divorce decree obtained in the US is not valid, because at the time it was issued, Vicenta, like Pastor, was still a Filipino citizen. She was then subject to Philippine law. Philippine law cannot rec-ognize a foreign decree of absolute di-vorce between Filipino citizens, for this would violate declared public policy.

Van Dorn vs. Romillo(1985)

FACTS: Van Dorn, a Filipina, married American Upton. Ten years later they were divorced in the US; subsequently, van Dorn remarried. Upton filed an ac-tion against Van Dorn in the Philippines, asking for an accounting of certain al-leged conjugal properties.

HELD: The divorce decree is valid and binding upon Upton. Even if divorce is not valid in the Philippines for being con-trary to public policy, only Philippine na-tionals are covered by the policy against absolute divorces. Aliens may obtain di-vorces abroad, which may be recognized in the Philippines provided valid accord-ing to their national law.

Pilapil vs. Ibay Somera(1989)

FACTS: Pilapil and Geiling were married in Germany, but were later divorced. A few months later, Geiling filed a com-plaint for adultery which was dismissed; it was refiled by the fiscal.

HELD: Geiling has no legal standing to commence the adultery case because the person who initiates the adultery case must be an offended spouse, mean-ing he must still be married to the ac-cused spouse at the time of the filing of the complaint. Because of the divorce decree, Geiling is no longer the husband of Pilapil; hence he had no more legal standing to commence the adultery case (no longer an offended “spouse”).

Quita vs. Court of Appeals(1998)

FACTS: Quita and Padlan were married in the Philippines, but Quita filed for divorce in California which was granted. She re-married twice after the divorce. Upon Padlan’s death, Quita made claims upon his estate as the surviving spouse and heir of Padlan, alleging that since Padlan was a Filipino citizen, he remained mar-ried to her in spite of the divorce decree.

HELD: Quita’s right to inherit from Padlan depends on her citizenship at the time the divorce was decreed. If she was no longer a Filipino citizen at the time of their divorce, the divorce would be valid as to her and will be recognized in the Philippines, and she would lose her right to inherit.

✪ Tenchavez: 2 Filipinos, divorced abroad – not recognized in the Philippines (Art. 15 CC, nationality principle)

✪ Van Dorn: 1 Filipino, 1 foreigner, divorced abroad – recognized (Art. 15 CC, estoppel)

✪ Pilapil: 1 Filipino, 1 foreigner – rec-ognized (nationality principle)

________________

2. Validity of Foreign Di-vorce between Foreigners

Hague Convention on Recognition of Di-vorce & Legal Separation:

A foreign divorce will be recognized in all contracting states if at the date of institu-tion of proceedings:

a) Respondent or petitioner had his habitual residence there, or

b) Both spouses were nationals of this state, or

c) If only the petitioner was a na-tional, he should have his habitual residence there

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Notes!


US Full Faith & Credit Clause of Constitu-tion: A sister state has the duty to recog-nize a divorce pronounced in a sister state, when both spouses are domiciled there.

If only the plaintiff is domiciled there: Other conditions (i.e. service of process to defen-dant) must be fulfilled

Effect of Divorce Rendered by a Foreign Country: not covered by Full faith & credit clause

o but would be recognized under the same circumstance that a sis-ter state’s divorce decree is given recognition.

paramount consideration: jurisdiction of foreign court based on parties’ domicile.

Philippine Law on Recognition of Foreign Divorce Decree: No provision on recogni-tion of divorce decree b/w non-Filipinos;

o but such will be recognized under international comity, provided it does not violate a strongly held policy of the Philippines

C. Annulment and Declaration of Nullity

Effect: Affects status & domestic relations of parties.

Distinction from Divorce

Divorce Annulment and Nul-lity

The ground occurs after marriage cele-bration

Based on defects present at time of celebration

Grounds for Annulment & Nullity:

o States w/ traditional choice-of-law approach: follow the lex loci cele-brationis

o States w/ policy-centered ap-proach: follow the law of state of marital domicile (considered to have the most significant interest in status of persons)

In both approaches, lex fori (which is cru-cial in divorce) does not play substantial role because the action turns on the valid-ity of the marriage.

Note that in either traditional or policy-cen-tered approaches, lex fori is not used; re-call that lex fori can be used in divorce.

Both lex loci celebrationis and law of mari-tal domicile can provide jurisdictional basis, but only one can be a choice-of-law in the determination of the annulment decree.

Which states can claim adequate jurisdic-tional basis to hear a conflicts annulment or nullity case?

a) state where marriage was cele-brated

b) place of marital domicile

Wheaton vs. Wheaton: Even a court which acquires personal JD over parties can grant an annulment case (US case).

Sample conflicts Annulment Case

o M&F, domiciliaries of STATE A, both 18 years old

o marry in STATE B w/out knowledge of their parents

o suit for annulment was brought in STATE C (place of M’s residence)

State C can exercise JD over the case but what is the governing law?

• Traditional choice-of-Law rules: will find sufficient ground for the challenge

If the lex loci celebrationis (STATE B) requires parental consent for a valid marriage

• Most Significant Relationship Approach: will not yield a ground for annulment.

State C can conclude that since law of STATE A (state of marital domicile) gives people their age full capacity to marry, no ground for annulment

The Choice of Law rule of STATE C will be irrele-vant

D. Parental Relations

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What law determines legitimacy of a child? Personal law of parents - either domicile or nationality.

Most countries: father’s personal lawGerman law: law of head of family

Law on parental relations include:

o Paternity

o Filiation

What law governs legitimacy of child in the Philippines? National law of the parents.

If parents are of different nationality: na-tional law of father is controlling.

In the PHILIPPINES:

o Personal law of the child is the na-tional law of the father if the child is legitimate or legitimated.

o Personal law of the child is the na-tional law of the mother if the child is illegitimate.

o Legitimacy of the child deter-mined by the national law of the father if both parents are not Fil-ipino.

In the UNITED STATES:as per Second Restatement On Legitimacy of the American Law Institute

o Child is legitimate if this is his sta-tus under the local law where the parent is domiciled when the child’s legitimacy is claimed OR when the parent acknowledged the child as his own.

Parental Authority over the Child-from concept of patria potestas of Roman law

What law controls? Father’s personal law controls rights & duties of parents & chil-dren.

o Art. 211 FC: Reference to father’s personal law may result in joint exercise of parental authority

o Art. 176 FC: Personal law could grant parental authority to mother of illegitimate children

Scope of Parental Authority:

1) care & rearing

2) action a parent may file against another for child custody

3) requirements for parental consent of child’s marriage

E. Adoption

Definition: The act by which relations of pa-ternity & affiliation as legally existing b/w persons not so related by nature.

It is a judicial act w/c creates b/w 2 persons a relationship similar to that w/c results from legitimate paternity & affiliation.

Early societies considered it as a means of perpetuating a house or cult threatened by extinction.

Original purpose: solace for childless or people who lost children

Recent time: broader, more humane aim

Social & moral purpose: extend protection of society (in the person of adopter) to the orphan.Thus, persons eligible to adopt expanded

What law governs? lex domiciliiThe adoption process affects status of par-ties, necessarily governed by lex domicilii.

What if prospective adoptive parent is domiciled in one state & the child is domi-ciled in another? Twin problems of juris-diction and choice-of-law.

o If the main object of adoption is the welfare of the child, the per-sonal law of the child is the best choice-of-law to govern his rights

o But the personal law of the child cannot be successfully used to in-voke jurisdiction if his domicile is merely constructive or if he is a citizen of a state but he doesn’t reside there.

Child’s personal law as basis for exercise of jurisdiction weakened in situations where child’s domicile is:

o merely constructive, or

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o if he is a citizen of a state but he doesn’t reside there (there is little basis for court to protect child in-terest competently)

The continuous movement of people in & out of countries should also be factored in.

Can an alien adopt a child in the Philip-pines?General Rule: not allowedReason: Different family orientation, cul-tures, customs & traditions could pose problems of adaptation for child.

Exceptions:

o Art 184. Aliens who have some re-lationship with the child by con-sanguinity or affinity

o RA 8552 (Domestic Adoption Act Of 1998)

These two introduced significant changes in adoption law.

Change Pertinent to Conflict Law

1) Aliens who have resided in the Philippines for 3 years prior to the date of filing the application for adoption, and maintains resi-dency until decree of adoption is granted QUALIFIED TO ADOPT

2) Other requirements: a) certification of legal ca-

pacityb) certification that the State

law would allow entry of the adoptee as an adopted child of the adopter.

These other requirements may be waived if the adoptee is related by consanguinity or affinity to the

o adopter, or

o his/ her spouse as specified by law.

RA 8043:Before this, adoption of Filipino children by foreigners was done pursuant to Rules & Regulations on Foreign Adoption & bilateral agreements.

RA 8043 regulate the adoption of Filipino children by

o aliens, or

o Filipino citizens permanently residing abroad.

RA 8043 was passed in compliance with our treaty obligation as a signatory to the Hague Convention on Protection of Chil-dren & Cooperation In Respect of Inter-country Adoption.

Convention pursues modern concept of adoption: After possibilities of adoption for placement of child within state of origin have been exhausted, intercountry adop-tions may be placed in the best interest of the child.

Republic of the Philippines vs. CA(1993)

FACTS: Hughes is married to Lenita, a Fil-ipina who was later naturalized as an American citizen. They filed a petition to adopt the 3 nephews and niece of Lenita, which was granted.

HELD: Hughes is not qualified to adopt since he does not fall under the excep-tions in Art. 184 of the Family Code. While Lenita, as a former Filipino, is qual-ified to adopt under that provision, the adoption decree still cannot be granted because of the requirement in Art. 185 that spouses must jointly adopt. They cannot do this in CAB because Hughes is not qualified under the law.

Effects Of Adoption

What law governs rights of adopted child & other effects of legal adption? (law that governed the creation of adoption)

2 different legal orders depending on which law governed the creation of adoption:

1) If Personal law of adopter applied—same law governs effects of adoption.

2) If personal law of child applied—such law will cease to regulate the resulting parent-child rela-tions; it will yield to the personal law of adopting parents.

Philippine courts:

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o Adoption relates to a civil rights of adopted child

o Does not effect changes in po-litical rights, including eligibil-ity to acquire adopter’s citi-zenship

In the Philippines, principles of enforce-ment & recognition of a foreign judgment governs, because the decree granting an adoption is in the form of a foreign judg-ment.

Uggi Lindamand Therkelsen vs. Re-public(1964)

FACTS: Therkelsen (a German) and his wife Erlinda (a Filipino), filed a petition to adopt Erlinda’s natural child. The appli-cation was denied on the ground that an alien cannot adopt a Filipino unless the adoption would make the Filipino minor a citizen of the alien’s country.

HELD: The application should be granted. Being a permanent resident here, Therkelsen is not disqualified to adopt under our laws; to deny the application on the above stated ground would be to impose a further requisite on adoptions by aliens beyond those required by law. The citizenship of the adopter is a matter political, not civil in nature, and the ways in which it should be conferred lay out-side the ambit of the Civil Code.

Ng Hian vs. Collector of Customs(1916)

FACTS: Marcosa married Ng Chion Te. She adopted his 2 children by a previous marriage and brought one of them to the Philippines to study. The child, Ng Hian, was refused entry into the Philippines.

HELD: Ng Hian may enter the Philippines by virtue of being adopted by one who has a right to do so. In the case of Ex Parte Fong Yim, it was held that a Chi-nese merchant domiciled in the US has the right to bring into this country with his wife minor children legally adopted by him in China, where it is shown that the adoption was bona fide, and that the children have lived as members of his family and have been supported by him for several years.

XIII. Choice of Law in Property

A. The Controlling Law

The first issue to resolve in conflicts cases involving property is whether it is a mov-able or an immovable, because upon this determination will depend the controlling legal system.

Immovables: regulated by lex situs; under-lying this is the characterization of immov-able property as an isolated object of rights so that the interests of various persons are determined by the law of the place where the land is situated.

The connecting factor is the immovable it-self and not the parties concerned.

Movables: not necessarily governed by the lex situs; its transfer may be controlled by the a) lex domicilii, b) lex situs, or c) lex loci actus (the proper law of transfer).

Lex domicilii: the rights over the movables are governed by the law of the owner’s domicile.

Lex situs: the state where the property is situated has the sole power to decide the validity and effects of the transfer of prop-erty. Also, the parties’ legitimate expecta-tions are protected. The rationale for this is that being physically part of the country, it should be subject to the laws thereof. The situs is the place most closely and signifi-cantly related to the issue in question.

Alternatives to lex domicilii and lex situs:

a) Lex loci actus: law of the place where the transaction was com-pleted

b) the proper law of the forum: law of the state which has the most real connection with the transfer

In the Philippines, real and personal prop-erty are “subject to the law of the country where it is situated” (Art. 16 CC). a problem regarding classification will arise only when the property is located in a foreign country which has a law that distinguishes between real and personal property.

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For real property, there is very little room for choice of law, because of the emphasis on lex situs.

Why?1) Property physically a part of the

particular state, and that state can exercise JD over it (traditional approach)

2) There is need for reliable records (to protect the sanctity of records)

________________

B. Capacity to Transfer or Acquire Property

This is governed by the law of the place where the property is located.

Llantino vs. Co Liong Chong(1990)

FACTS: The Llantinos leased real prop-erty to Chong, a Chinese national (but subsequently naturalized as a Filipino), for 60 years. The Llantinos filed an action to quiet title, claiming that the lease con-tract was invalid for circumventing the constitutional prohibition on the acquisi-tion of land by aliens.

HELD: The lease contract was valid, and Chong had the right to hold by lease the property involved although at the time of execution of the contract, he was still a Chinese national. In CAB there was no option to buy the leased property in fa-vor of Chong. There is nothing in the record to indicate any scheme to circum-vent the constitutional prohibition.

Aliens are not completely excluded by the Constitution from use of lands for residential purposes. Since their resi-dence in the Philippines is temporary, they may be granted temporary rights, such as a lease contract which is not for-bidden in the Constitution. The only in-stance where a lease contract may be considered invalid is where there are cir-cumstances attendant to its execution which are used as a scheme to circum-vent the constitutional prohibition.

Cheesman vs. IAC(1991)

FACTS: Thomas Cheesman (an Ameri-can) was married to a Filipina, Criselda. The spouses later separated; but Thomas brought this action to annul the sale of real property made by Criselda in favor of Padilla. He alleged that the sale is void for lack of his consent. The property sold was bought by Criselda using her per-sonal funds, and was registered in her name only.

HELD: The sale was valid. He has no ca-pacity to question the sale of the prop-erty by his wife on the theory that in do-ing so he is merely exercising the pre-rogative of a husband in respect of con-jugal property. This would permit indirect controversion of the constitutional prohi-bition. If the property were to be de-clared conjugal, this would accord to the alien husband an interest and right over the land, which is not granted to him un-der the Constitution.

C. Extrinsic and Intrinsic Validity of Conveyances

The lex situs law applies to the following:

1) formalities of a contract to convey property

2) the essential validity of the trans-fer (unless the lex intentionis is clearly established)

3) the effects of the conveyance or properties

D. Exceptions to the Lex Situs Rule

3 Exceptions to the Lex Situs rule:

1) where the transaction does not affect transfer of title to or owner-ship of the land (proper law: lex intentionis or lex voluntatis)

Liljedahl vs. Glassgow(1921)

FACTS: Bailey secured a debt payable in Iowa to Liljedahl; as security, he mort-gaged his land in Colorado. Bailey sold this land to Glassgow, with the provision in the deed of sale that the grantee agrees to pay the mortgagee. Glassgow sold the land to a third party. Under Iowa

55

Notes!


law, Glassgow became bound to pay the mortgage, but not under Colorado law.

HELD: Iowa law should apply, and Glass-gow should pay Liljedahl. Instruments of conveyance, as they relate primarily to title, are to be construed according to the law of the situs. But personal covenants or agreements in instruments of conveyance will be given effect ac-cording to the law of the place where the same is executed and to be performed.

2) in contracts where real property is offered by way of a security for the performance of an obligation such as loan, where the security is merely an accessory contract (the principal contract is governed by the rules on ordinary contract, while the accessory contract on the land is governed by the rule of lex situs)

3) testate or intestate succession and capacity to succeed, which are governed by the national law of the decedent

Under a policy-centered approach, the fo-rum court is not bound to look to the law of the situs when the situs of the movable property at the time of the transfer was in-significant or accidental.

Also, when the issue involves considera-tions other than the validity and effect of the transfer itself, the courts may look to the law of another state which has a real interest in applying its law.

Rudow vs. Fogel: since the issue did not re-late to land title but to whether the con-veyance would result in a constructive trust among family members, the law applicable is the law of the domicile of the trustor and trustee instead of the lex situs of the prop-erty.

E. Situs of Certain Properties

1. Situs of Personal Property for Tax Purposes

The maxim mobilia sequuntur personam cannot be applied to limit the right of the state to tax property within its JD. It yields to established facts of legal ownership, ac-

tual presence, and control elsewhere, and cannot be applied if it would result in in-escapable and patent injustice.

2. Situs of Money

Leon vs. Manufacturers Life Insurance: hav-ing been endorsed in an annuity in Canada under a contract executed in that country, Canada was the situs of the money, hence the probate court of Manila has no JD over the funds.

3. Situs of Debts

2 Kinds of Movable Property:

1) choses in possession – embraces all types of tangible physical ob-jects

2) choses in action – refers to intan-gible objects

a) mere rights of actions b) rights represented by a

document (capable of de-livery and susceptible to negotiation as a separate legal entity)

Harris vs. Balk(1905)

FACTS: Harris and Balk are both North Carolina domiciliaries. Harris owed Balk a sum of money. When he was in Balti-more he was served a writ of garnish-ment, it appearing that Balk has a debtor there. He paid pursuant to the writ, but when he returned to N. Carolina, Balk sued him for recovery of his indebted-ness. Harris pleaded the recovery of the Maryland judgment.

HELD: The attachment of Harris’ debt is valid, and the North Carolina court should give credit to the Maryland judg-ment. The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes. He is as much bound to pay his debt in a foreign state when therein sued upon his obligation by his creditor, as he was in the state where the debt was contracted.

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Prof. Beale: this decision did injustice to the creditor, as he has no power to fix the per-sonal presence of his debtor at one place or another. It is unjust to submit the credi-tor’s claim to the accident of the debtor’s presence in one state or another.

4. Situs of Corporate Shares of Stocks

Under the Corporation Code (Sec. 63), shares of stock are personal property and may be transferred by delivery of the cer-tificate or certificates indorsed by the owner or his attorney in fact. But such transfer shall not be valid until recorded in the books of the corporation in the manner provided.

CIR vs. Anglo California National Bank

(1960)FACTS: The Collector of Internal Revenue assessed deficiency income taxes against Calamba Sugar Estates for the capital gains on the sale of Pampanga Sugar Mills shares of stock. The sales were conducted in SF, California, and payments were made there.

HELD: CSE not liable for income tax on the capital gains. The government can-not impose income taxes on capital gains where the sale took place outside its territorial JD. Foreign corporations may be levied income taxes only on in-come derived from sources within the Philippines. With respect to capital gains, the place of the sale (which in CAB is California) is also the place or source of the capital gain.

F. Patents, Trademarks, Trade Name, and Copyright

The Philippines is a party to the Union Con-vention for the Protection of Industrial Property; said convention states in Art. 8 that a “trade name shall be protected in all the countries of the Union without the obli-gation of filing of registration, whether or not it forms part of the trade name.”

Western Equipment and Supply Co. vs. Reyes; although Western equipment has

not done business in the Philippines, it has the right to protect its reputation. The right to the use of the company’s corporate and trade name is a property right which may be asserted against the whole world.

RA 8293 (Intellectual Property Code): appli-cant cannot register marks “well known in-ternationally and in the Philippines, whether or not it is registered here, xxx and is used for identical or similar goods or services.”

Under Sec. 3 of the IPC, any foreign corpo-ration which is a national or domiciliary of a country which is a party to a convention, treaty or agreement relating to intellectual property rights to which the Philippines is also a party or extends reciprocal rights to our nationals by law “shall be entitled to benefits to the extent necessary to give ef-fect to any provision of such convention…”

Philips Export vs. CA(1992)

HELD: A corporation’s right to use its cor-porate 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 tangi-ble 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 de-feated by subsequent appropriation by another corporation in the same field.

Emerald Garment Mfg. vs. CA(1995)

FACTS: H. D. Lee Co., a foreign corpora-tion, filed a petition for cancellation of registration of the trademark “Stylistic Mr. Lee” used on items of clothing by Emerald Garments, alleging that it so closely resembled H. D. Lee’s trademark as to cause confusion, mistake and de-ception on the public as to the origin of the goods.

HELD: A foreign corporation may have the capacity to sue for infringement irre-spective of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the question of whether they have an exclusive right over their symbol as to justify issuance

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of the xxx writ will depend on actual use of their trademarks in the Philippines.

XIV. Choice of Law in Contracts

Contract: meeting of the minds between 2 persons whereby one binds himself, with respect to the other, to give something or render some service. Parties are bound not only to those expressly stipulated but also to all the consequences which according to their nature, may be in keeping with good faith, usage and law.

As a gen. rule, unless provided by law or in the agreement, a contract is obligatory in whatever form it may have been entered into provided that all the es-sential requisites for validity are present.

Principal purposes of contract:1. protect the reasonable expectations

of the parties to the contract2. secure stability in commercial trans-

actions

A. Contracts Involving a Foreign Ele-ment

States, in their municipal laws, have differ-ent rules on the formalities of a contract, the capacity of parties, and the essential requisites for the intrinsic validity of con-tracts, interpretation and the law governing execution. Forum court should be aware if there is a law that parties have in mind when they entered into a contract.

Interpretations of contracts are applied only when the lex loci intentionis cannot be ascertained.

Unlike family law, contract law does not re-flect strong state policies or values.

B. Extrinsic Validity of Contracts

Lex loci celebrationis governs the formal or extrinsic validity of contracts. A contract is valid as to form if in accordance with any form recognized as valid by the law of the country where made, and that no contract is valid which is not made in accordance with the local form.

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

As to Contracts entered into by cablegram, telex or fax: Art. 1319, CC states that ac-ceptance made by letter or telegram does not bind the offeror except from the time it came to his knowledge. The contract is pre-sumed to have been entered into the place where the offer was made.

C. Intrinsic Validity of Contracts

Intrinsic validity refers to nature, contents and effects of the agreement.

Art. 1318, CC: requisites of a contracta. consent of the contracting partiesb. object certainc. cause of the obligation

There are 3 possible laws that will govern intrinsic validity of contracts:

1. law of the place of the making2. law of the place of performance3. law intended by the parties

1. Lex Loci Contractus

This refers to the law of the place where the contract is made. This is the place where the last act is done which is neces-sary to bring the binding agreement into being so far as the acts of the parties are concerned.

Advantages:a) relative ease in establish-

ing place of contracting

b) in applying it consistently, certainty and stability are achieved.

Disadvantage: it will lead to unjust results when the place of making is entirely inci-dental or casual and has no significant rela-tionship with the contract or its perfor-mance.

2. Lex Loci Solutionis

This refers to the law of the place of the performance. All matters relating to time,

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place, manner of performance, sufficiency of performance and valid excuses for non-performance are determined by lex loci so-lutionis because it is undoubtedly related to the contract in a significant way.

Macmillan & Bloedel vs. Valderama & Sons(1964)

FACTS: Valderama & Sons, thru an n agent, entered into a contract for pur-chase of railroad equipment with Macmil-lan in Canada. Valderama failed to get an import license because the Import Control Comm failed to act on his appli-cation. Macmillan suffered damages be-cause it had to cancel the freight en-gagement.

HELD: Lex loci solutionis applies. The general rule governing the validity & construction of a contract & the rights and liabilities thereunder is that the law of the place of performance applies.

In case of conflict in determining validity, nature and obligation and effect of con-tract, lex loci solutionis prevails over lex loci contractus.

The laws of Canada, which is the place of performance, should apply. The failure of the Import Control Comm. to act on the application of import license cannot con-stitute a legal excuse for his failure to perform his obligations under the con-tract.

3. Lex Loci Intentionis

This refers to the law intended by the par-ties. When the parties stipulate that the contract be governed by a specific law, such will be recognized unless there are cogent reasons for not doing so e.g. the choice-of-law provision is contrary to a fun-damental policy of the forum.

Also construction and interpretation of con-tracts may be agreed upon by parties.

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

Art, 1370, CCIf the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of the stipulations shall control.

The law looks at the acts of the parties and the surrounding circumstances which may possibly have exerted some influence upon their actions and then assumes that their intentions are in harmony with such acts and circumstances.

Parties are presumed to contemplate to en-ter into a valid contract. The court should apply the law that will sustain the contract.

D. Capacity to Enter into Contracts

The capacity to enter into contracts is gov-erned by the rule on status and capacity (personal law). In countries that follow the nationality principle, the national law pre-vails (art. 15, CC). In countries that follow the domiciliary principle, law of their domi-cile governs.

E. Choice of law Issues in Conflicts Contracts Cases

1. Choice of Forum Clause

The parties may stipulate on the venue of the suit in case of litigation concerning the contract.

It is a general rule that plaintiff has the op-tion to choose the venue where the suit is to be filed in action in personam. However, a case arising from the contract will be liti-gated only in the forum chosen by the par-ties if the choice of forum clause specifi-cally identifies it as the only venue.

Sec. 80, Sec. 3, Restatement Second. If the parties have agreed in writing that an ac-tion shall on a controversy be brought only in another state and it is brought in a court of this state, the court will dismiss or stay the action, unless:

1. the court is required by statute to entertain the action

2. plaintiff cannot secure effec-tive relief in other state for reasons other than delay

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3. the other state would sub-stantially be a less conve-nient place of trial

4. the agreement as to place of action was obtained by mis-representation, duress, abuse of economic power or other unconscionable means

5. it would be unfair or unrea-sonable to enforce the agree-ment

Compagnie de Commerce vs. Ham-burg Amerika

(1917)FACTS: Compagnie (french) and Ham-burg (Germany) entered into a charter party to transport C’s goods from Saigon- Europe. Because of the impend-ing war between France & Germany, the ship went to Manila because Saigon is a French port. C filed for breach of con-tract. H contested the jurisdiction of Phil courts to try the case because the con-tract had a clause directing the settle-ment of disputes first to a Board of Arbi-tration in England.

HELD: Phil. courts have jurisdiction. The parties are free to waive the stipulation if they so desired.

Phil courts cannot be ousted of their ju-risdiction by the contractual stipulation in the absence of averment and proof that under the law of England (place of contracting), compliance with, or an offer to comply with such a stipulation consti-tutes a condition precedent to the insti-tution of judicial proceeding for the en-forcement of the contract.Besides, Hamburg appeared and an-swered without objecting to the court’s jurisdiction; it also sought affirmative re-lief.

King Mau vs. Sycip(1954)

FACTS: King Mau entered into an agency agreement with the Sycip in New York. King mau was able to sell 1,000 tons of coconut oil. KM brought an action to col-lect commission from the sale. Sycip claimed that the Phil court has no juris-diction as the contract was entered in New York.

HELD: Phil court has jurisdiction. A non-resident may sue a resident in the courts

of this country where the defendant may be summoned and his property leviable upon execution in case of a favorable, if final and executory judgment.

It is a personal action for the collection of a sum of money which the CFIs have ju-risdiction to try and decide.

HSBC vs. Sherman(1980)

FACTS: HSBC granted Eastern Book Sup-ply an overdraft secured by the directors of the latter. Eastern failed to pay. HSBC filed suit in RTC. The defense of the di-rectors is that Phil courts have no juris-diction because in the Guarantee Agree-ment, it was provided that Singapore shall have jurisdiction over all disputes arising therein.

HELD: Phil courts have jurisdiction. The parties did not stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Phil. courts of jurisdiction.

Jurisdiction is defined as the right of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. This authority is exclusive within and throughout the do-main of the State.

Pangalangan: HSBC case is disappointing—why did the courts not recognize the choice of forum clause? Courts are “turf-con-scious”; for PRIL to progress, there is a need for each country to give up some of its exercise of sovereignty._______________

2. Contracts with Arbitration Clause

Puromines vs CA((1993)

FACTS: Puromines and Philip Bros. en-tered into a contract of sale with an arbi-tration clause. Puromines filed for com-plaint in RTC, Manila. Philip Bros. filed a

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Notes!


MTD on the basis of an arbitration clause.

HELD: Arbitration clause is valid. Puromines derives its right from the bill of lading together with the sales contract & it is bound by the provisions and terms of the bill of lading and of the arbitration clause incorporated in the sales contract.

The courts will look with favor upon such amicable settlements (arbitration) and will only interfere with great reluctance to anticipate or nullify the action of the arbitrator.

The Bremen vs. Zapata(1972)

FACTS: Zapata, a Houston company, en-tered into a contract of towage with Un-terweser, a German corp. Contract con-tained a forum selection clause which provides that any dispute arising must be treated before London courts.

Zapata filed a suit in admiralty against Unterweser for breach of contract and damages in Florida District Court. Unter-weser filed motion to dismiss for lack of jurisdiction citing the forum-selection clause.

HELD: Florida court has no jurisdiction. As a rule, a forum clause should control absent a strong showing that it should be set aside. Court should enforce the fo-rum clause specifically unless Zapata could clearly show that

a. enforcement would be unreasonable and unjust or

b. that the clause was invalid for such reasons as fraud or overreaching or

c. if enforcement would contravene a strong public policy of the forum in which suit is brought, whether de-clared by a statute or by judicial de-cision or

d. if the chosen forum is seriously in-convenient for the trial of the ac-tion. But if the parties contemplated the claimed inconvenience, it should not be heard to render the forum clause unenforceable.

The CAB involves a freely negotiated in-ternational commercial contract between the parties. As noted, selection of a Lon-don forum was clearly a reasonable ef-

fort to bring vital certainty to this int’l transaction and to provide a neutral fo-rum experienced and capable in the res-olution of admiralty litigation.

3. Adhesion Contracts

Adhesion contract is one that is not negoti-ated by the parties having been drafted by the dominant party and usually embodied in a standardized form. It is called a con-tract of adhesion because the participation of 1 party is limited to affixing her signa-ture.

Pan Am World Airways vs. Rapadas(1992)

FACTS: Rapadas’ samsonite was lost and Pan Am offered to settle the claim for $160. Rapadas refused and filed an ac-tion in court. The defense of Pan Am is that the claim is subject to the Notice of baggage Liability Limitations contained in the passenger ticket.

HELD: The liability is limited by the No-tice of Baggage liability. Although the ticket is a contract of adhesion, it does not offend against the policy of the law forbidding one from contracting against his own negligence. The one who ad-heres to the contract is in reality free to reject it entirely. Court finds the provi-sions in the plane ticket sufficient to gov-ern the limitations of liabilities of the air-line for loss of luggage. The passenger, upon receiving his plane ticket, was ex-pected to be vigilant insofar as his lug-gage is concerned.

PAL vs. CA(1996)

FACTS: Mejia shipped through PAL 1 mi-crowave oven from San Francisco to Manila. Upon arrival, she discovered that the front glass door was broken and the oven could not be used. Mejia filed ac-tion against PAL. PAL denied liability and alleged that it acted in conformity with the Warsaw Convention.

HELD: Although the airway bill is binding between the parties, the liability of Pal is not limited on the provisions of the air-way bill. While the Warsaw Convention is law in the Philippines, the Philippines be-

61


ing a signatory thereto, it does not oper-ate as an exclusive enumeration of the instances when a carrier shall be liable for breach of contract or as an absolute limit of the extent of liability nor does it preclude the operation of the Civil Code or other pertinent laws.

Also, the willful misconduct and insensi-tivity of the officers of PAL in not at-tempting to explain the damage despite due demand and the unexplained delay in acting on her claim, amounted to bad faith and renders unquestionable its lia-bility for damages.

Specific Instances where court disregarded the adhesion contract:

1) when the party is not literate in the language of the contract with knowledge of what was intended

2) when there is undue advantage made by a dominant party usually a huge corporation or a business monopoly

3) when there is ambiguity in the ad-hesion contract, it must be re-solved contra preferentum and in favor of the party impugning it

4) when it is subversive of public policy when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of tak-ing it or leaving it, completely de-prived of the opportunity to bar-gain on equal footing

Sweet Lines vs. Teves: Petitioners assail the validity of the tickets issued by Sweet Lines.

HELD: The adhesion contract is void. It is not just and proper to expect that the pas-sengers examined their tickets from the crowded counters esp. if there are a num-ber of conditions in fine print. Also, ship-ping companies, esp. inter-island vessels, possess a virtual monopoly over the busi-ness of transporting the passengers be-tween ports covered by their franchise. Lastly, the court took judicial notice of the fact that these passengers come from low-income groups and are less literate and who have little or no choice but to avail of petitioner’s vessels.

Parties may include any stipulation as long as such stipulations do not violate public policy or morals of the forum.

Lessons:

✪ PanAm: not all contracts of adhe-sion are against public policy; bal-ancing of interests (airline vs. pas-senger)

✪ PAL vs. CA: when there is ambigu-ity in adhesion contract, construe against the drafter.

________________

4. Special Contracts

In sales or barter of goods, the law of the place where the property is located will govern (lex situs).

A simple loan granted by financial institu-tions is governed by the law of the perma-nent place of business. But if granted by a private individual, it is governed by the law of the place where the loan was obtained.

In contracts of pledge, chattel mortgage and antichresis, the extrinsic and intrinsic validity of the contracts are governed by lex situs.

Carriage of Goods by Sea

62

Notes!


American President Lines vs. Klep-per

(1960) FACTS: K shipped on board APL’s vessel personal effects. Because of damage to the effects, K sued APL. CA affirmed CFI’s finding of liability but awarded damages on the basis of the COGSA.

HELD: COGSA does not apply but the Civil Code. Article 1753 of the Civil Code 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, destruction or de-terioration. Under Article 1766, "In all matters not regulated by this Code, the rights and obligations of common carri-ers shall be governed by the Code of Commerce and by special laws," and in the Civil Code there are provisions that govern said rights and obligations. Al-though Section 4 (5) of the Carriage of Goods by Sea Act states that the carrier shall not be liable in an amount exceed-ing $500.00 per package unless the value of the goods had been declared by the shipper and inserted in the bill of lad-ing, this is merely suppletory to the pro-visions of the Civil Code.

Contracts for International Air Transporta-tion

The Warsaw Convention and amendments to the same regulate and establish uniform rules and regulations on the liability of in-ternational airline carriers in cases of death, injuries of passengers or loss or damage of cargo. The Phils. became a member thereof in 1951.

Liabilities of the Carrier:

a. in case of death or wounding- car-rier’s liability is not more than $75,000.

b. The limits do not apply when the damage is caused by the act or omis-sion of the carrier, his servants or agents, done with the intent to cause damage or recklessly and with knowl-edge that damage would probably re-sult, provided that the agent was act-ing within the scope of his employ-ment.

c. In case of loss or damage to baggage - $20/kilo for checked baggage and $400/passenger for unchecked lug-gage unless a higher valuation is agreed upon by the parties

d. Prescription. Action must be brought within 2 years from date of arrival at the destination, or from date which the aircraft ought to have arrived or from the date on which the trans-portation stopped.

e. Venue. Any action for damages may be brought either in the court of the

1. domicile of the carrier2. principal place of business3. place of business where the con-

tract was made4. place of destination5. Successive Carriers. Each of the

successive carriers is bound by the rules on the Convention and shall be deemed to be one of the contracting parties insofar as the part of the transportation which is performed under his supervision. But for goods or baggage, the passenger or consignor has a right of action against the first carrier and the consignee who is entitled to receive the same, against the last carrier. They must take action against the carrier who performed the transportation during which the loss, damage or delay took place.

Lopez vs. Pan Am(1965)

FACTS: Despite several confirmations, Sen. Lopez and his family failed to get 1st

class seats and were constrained to board as tourist passengers of PanAm. CFI, Rizal awarded damages in their fa-vor. Pan Am admitted the breach of con-tract but not the finding of bad faith

HELD: Pan Am acted in bad faith. Pan Am misled the Lopezes into believing the reservations were valid and was prompted by self-interests in dong the same (precluding the Lopezes to secure other tickets). Also, there was negligence by its employees that were so gross and reckless as to amount to malice and bad faith, e.g. erroneous cancellation of reservation, not confirming reinstate-ment of reservation, confirming reserva-tion even if EE had knowledge that they

63


were merely waitlisted and not notifying Lopezes of the cancellation.

KLM Royal Dutch vs. CA(1975)

FACTS: Mendozas went on a world tour. KLM issued the tickets for the whole trip. Their coupon for Aer Lingus was marked RQ. Thru KLM’s help, reservations were made in the Aer Lingus flight. Upon ar-rival, only the minors were allowed to board. Mendoza sued for breach of con-tract and for damages bec. of the humili-ation they suffered. KLM denied liability on the basis of Art. 30 of the Warsaw Convention (successive carriers liability)

HELD: Art. 30 does not apply and KLM should be accountable for the tortious act of Aer Lingus.Art. 30 presupposes ei-ther an accident or delay and not the sit-uation in CAB. Although the tickets pro-vide that KLM’s liability for damages is limited to occurrences in its own airlines, this provision was printed in very small letters such that a magnifying glass is needed to read it. It would be unfair to charge Mendozas of automatic knowl-edge and it is the duty of KLM to inform them of the conditions prescribed in the tickets or at least make sure that they read them before they accepted the tick-ets. This it failed to do.

American Airlines vs. CA(2003)

FACTS: Mendoza bought conjunction tick-ets from Singapore Airlines. Although it was not a participating airline, AA ex-changed the unused portion of the ticket for a one-way ticket to New York. How-ever, Mendoza was prevented by AA’s security officers from boarding until all the other passengers have boarded. He sued action for damages against AA in RTC. AA claimed that the issuance of a new ticket created a separate contract of carriage from the one with SA and there-fore, under Art. 28, RTC had no jurisdic-tion over the case against AA.

HELD: RTC had jurisdiction; the new ticket is not considered as separate from the one issued by SA but the contract of carriage constitutes a single operation.

SA & AA are members of the IATA and under the general pool partnership agreement they act as agents of each other in the issuance of tickets to con-tracted passengers. When AA exchanged the ticket, it entered it in the IATA clear-ing house and undertook to transport M. It thereby assumed the obligation to take the place of the principal carrier origi-nally designated and constituted itself as an agent of SA. The number of tickets is-sued does not detract from the oneness of the contract of carriage as long as the parties regard the contract as a single operation.

Chiok vs. China AirlinesFACTS: Chiok purchased ticket from CAL exclusively endorsable to PAL. While in Hkong, his flight was confirmed by both CAL and PAL attaching their respective stickers. On the day of his flight to Manila, he was informed by a PAL em-ployee that he was not in the computer list so he was not allowed to board. Us-ing another CAL ticket, he was able to re-turn to Manila. C sued CAL. CAL denied li-ability as the carriage was performed by PAL.

HELD: Cal is liable. The ruling in KLM is applicable. The contract was between CAL and C, with the former endorsing to PAL the HK-Mla segment. This can be treated as a single operation under Art. 15, IATA Rules and Art. 1 of the Warsaw Convention

Art. 1, Sec. 3 WC: transportation to be performed by several successive carriers shall be deemed to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a se-ries of contracts.

Art. 15 IATA: carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunc-tion ticket issued therewith, is regarded as a single operation.Pal acted as carrying agent of CAL, thus, CAL cannot evade liability.

64


Santos III vs. Northwest Airlines(1992)

FACTS: Santos bought a roundtrip (SF-Manila-SF) ticket from NW airlines office in SF. Despite previous confirmations, he was informed that he had no reservation on his trip. He sued NW for damages in RTC Makati. NW filed MTD for lack of ju-risdiction.

HELD: Phil court has no jurisdiction to hear the case under Art. 28 of the War-saw Convention. This article enumerates the places where action must be filed, to wit:1. Domicile – Minnesota, USA (domicile

must be understood in the English sense – place of incorporation)

2. principal place of business – Minne-sota

3. place of business where contract is made – San Francisco

4. place of destination – San Francisco (not Manila because it was merely an agreed stopping place, SF is still the ultimate place of destination

Distinction between KLM and China Air: in KLM, KLM was the only company the pas-senger dealt with; in Chiok, it was alleged that Chiok himself (passenger) requested for the PAL booking. It can then be argued that CAL should not be held liable.________________

F. The Applicable law in the absence of an Effective Choice

According to the 2nd Restatement, in the absence of an effective choice of law, these factors will be considered in determining the state with which contract has its most significant relationship

1. place of contracting2. place of negotiating of the contract3. place of performance4. situs of the subject matter of the con-

tract5. domicile, residence, nationality, place

of incorporation and place of business6. place under whose local law the con-

tract will be most effective

Courts should localize the contract by ex-amining the contacts it has with a state rel-ative to the cogency to the issue. Example: For contracts involving liability for destruc-

tion of goods in transit, the state of the most significant relationship is the state of destination.

In the absence of an effective choice of law, courts applying a policy-centered ap-proach will apply its own law when there are significant contacts with the transac-tion. 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

1) if the law selected has no connec-tion at all with the transaction or the parties

2) if it ousts the jurisdiction which the court has already acquired over the parties and the subject matter

3) if it affects a public policy or the matter is heavily impressed with public interest

4) in case of confession-of-judgment clauses (waives the debtors right to receive notice or authorizes en-try of judgment)

XV. Choice of Law in Wills, Succession and Administration of Estates

Will or testament: act whereby a person is permitted, w/ formalities prescribed by law, to determine to a certain extent the distri-bution of his estate to take effect after his death.

It is a disposition made by a competent testator in the form prescribed by law of property over which he has legal power of disposition

Conflicts of Law Perspective:Will: an involuntary transfer of property, because it comes into effect only upon death of owner. Death is involuntary, thus making a will is an involuntary transfer of property.

Wills are governed by the “proper law”

65

Notes!


o common law- law of domicile of testator

o civil law- national law of testator

A. Extrinsic Validity of Wills

Filipino national making a will abroad may comply with:

o lex nationalii (no express provi-sion) or

o lex loci celebrationis (Art 17, 815)

Pertinent Conflict-of-law rules:(referring to law of place where will was ex-ecuted as law governing forms & solemni-ties of will)Art 17: The forms and solemnities of con-tracts, wills, and other public instruments shall be governed by the laws of the coun-try in which they are executed.

When the acts referred to are executed be-fore 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 inef-fective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

Art 815: When 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. (n)

What is the proper law for wills written abroad by Filipinos?(There is no express provision that it is lex nationalii)

Tolentino:Art 815 follows general rule of lex loci cele-brationis.

The Civil Code did not mean to invalidate the will of a Filipino made in conformity w/ Phil law.

Aliens making wills outside the Philippines are, under Art 816 & 817, permitted to fol-low:

o lex nationalii

o lex domicilii

o lex loci celebrationis

Article 816. The 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 ac-cording to the formalities observed in his country, or in conformity with those which this Code prescribes. (n)

Article 817. A 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 ac-cording to the laws of the Philippines. (n) It cannot be assumed that the Code places a Filipino citizen in a worse position than an alien in relation to our law.

The Code should have expressly stated this considering general provision in Art 17.

In re Estate of Johnson(1918)

FACTS: Ebba Ingeborg sought to annul the probate of the will of his father Emil Johnson, because the resulting intestacy would be favorable to her as a sole heir. She stresses that Section 636 of the Code Of Civil Procedure should not gov-ern the will executed by her father in the US, because the word “state” in the body of the section is not capitalized (thus not referring to a State in the US).

HELD: This interpretation is erroneous because the full phrase “another state or country”, means that the section refers to either a State in the US or another country. The admission of the will to pro-bate by the CFI of Manila under Section 636 was therefore correct. Although the CFI Of Manila most likely erred in taking judicial notice of Illinois law when it pro-mulgated that the will was executed in conformity with the laws of Illinois, Ebba is now precluded to raise this issue be-cause the petition to annul the probate did not allege the difference between Philippine Law and Illinois law.

Extrinsic Validity of Joint Wills

66


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

Joint wills are prohibited on grounds of pub-lic policy, because:

1) a will is a purely personal & uni-lateral act & this is defeated if 2 or more persons make their will in the same instrument

2) the revocable character of a will is defeated, because if one of tes-tators revoke the will, the other testators will have no instrument left

3) it exposes a testator to undue in-fluence & may even tempt one of testators to kill the other

4) when a will is made jointly or in same instrument, the more ag-gressive spouse is liable to dic-tate the terms of the will for his/her own benefit

- where will is also reciprocal, ei-ther of the spouses who may be wicked may be tempted to kill the other.

Joint wills executed by Filipinos in a foreign country allowing joint wills are expressly in-validated by law.

Joint wills executed in the Philippines by aliens (whose laws do not prohibit it): the law is silent

It is suggested that such will should not be probated if it affects heirs in the Philippines (in accordance with the expressed policy in Art 819).

Extrinsic Validity of Holographic Wills

Art 810: a holographic will is one entirely written, dated and signed by the hand of the testator himself. It is not subject to any other form, need not be witnessed and may be made in or out of the Philippines.

Art 816 & 817 are also applicable to holo-graphic wills

Merits:

o simple

o convenient

o does not require notariza-tion

o guarantees absolute se-crecy

Demerits:

o peculiarly dangerous

o an invitation to forgery

o short statements can con-fuse handwriting experts

Babcock Templeton vs. Rider Bab-cock

(1928)FACTS: The will of Jennie Rider Babcock was executed in California. Babcock Templeton, being the mother of the three beneficiaries of the will, stressed that the laws of California should govern the probate since Jennie Rider Babcock acquired domicile in California. William Rider Babcock opposes this by stressing that her sister never acquired domicile in California as her latest domicile was New York.

HELD: Her domicile was California, be-cause even though she later left Califor-nia for New York, she never intended to be a New York domiciliary. The trial court was also correct in admitting the will for probate under Section 636 of the Code Of Civil Procedure, because the length of time of her residence in and eventual death in the Philippines did not result into a loss of her US citizenship. She never intended to become a Philippine domiciliary, thus making Section 618 in-applicable to the will she executed abroad.

B. Intrinsic Validity of Wills

- governed by lex nationalii

Art 16: Real property as well as personal property is subject to the law of the coun-try where it is stipulated.

However, intestate and testamentary suc-cessions, both with respect to the order of succession and to the amount of succes-

67


sional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, what-ever may be the nature of the property and regardless of the country wherein said property may be found. (10a)

Miciano vs. Brimo: Miciano, as the adminis-trator of the estate of Joseph Brimo, filed a petition for the partition of the estate. An-dre Brimo opposed the partition because the will itself was not executed in accor-dance with the laws of Turkey, in violation of Article 10 of the Civil Code. The Court decided that although Andre Brimo opposed his brother’s intention to have Philippine laws apply he was not deemed to have contested the legacy, be-cause the choice of law clause in the will was contrary to law. Our laws apply the lex nationalii of decedent to determine intrinsic validity of a will and this law was purpose-fully disregarded by decedent. The Court considered this clause as not imposed and “shall I no manner prejudice the heir even if the testator should otherwise provide.

Criticisms on the Miciano vs. Brimo deci-sion:

Considering the primacy of giving primacy to the last will and testament of the dece-dent, the court should have respected the wishes of the decedent (i.e. the clause in the will should not have been annulled) by applying a policy-centered approach.

Using the most significant relationship ap-proach, Philippine law would govern be-cause Joseph Brimo is a Philippine resident, the properties are in here, and he made the will here… the only contact with Turkey is the fact of his nationality.

Under the escape device of “disingenuous characterization”, the same result could have resulted without flouting testator’s will. The court could have characterized the main issue as one of property and not of succession, thus making Philippine law the governing law as the lex rei sitae.

Cayetano vs. Leonidas(1984)

FACTS: Upon the death of Adoracion Campos, her father Hermogenes sought

to be declared as owner of the entire es-tate as the only compulsory heir. On the other hand, Nenita Paguia (one of Adora-cion’s sisters) sought the reprobate of the will executed by Adoracion in the US. When the trial court allowed probate of the will in the Philippines, Hermogenes raised in issue that the allowance of the will to probate divested him of his legit-ime, because the will preterited him.

HELD: Since the governing law with re-spect to the amount of successional rights is the national law of the dece-dent, the governing law of Adoracion’s will is Pennsylvania law. And since Penn-sylvania law does not have a system of legitimes, Hermogenes is therefore not preterited. Although the Philippines adopt a system of legitimes as a matter of public policy, such policy does not ex-tend to the successional rights of for-eigners.

General Rule: the probate court can only rule on:

1) extrinsic validity2) due execution3) testamentary capacity4) compliance with requisites/solem-

nities prescribed by law__________________

C. Interpretation of Wills

Interpretation of wills is to be governed by lex nationalii.

If terms are clear & unambiguous: lex in-tentionis

When there are ambiguous provisions: in-tention of party may be inferred by refer-ring to context of the will & the testator’s acts.

Article 1371. In order to judge the intention of the contracting parties, their contempo-raneous and subsequent acts shall be prin-cipally considered. (1282)

Article 1375. Words which may have differ-ent significations shall be understood in that which is most in keeping with the na-ture and object of the contract. (1286)

Presence of ambiguous provisions

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Notes!


Presumptions to help interpretation:1) The interpretations of such should be determined in accordance w/ laws & cus-toms of that state most probably in mind of testator

2) In case a will admits of different disposi-tions, the interpretation by which the dis-position is to be operative shall be pre-ferred

Article 788. If a testamentary disposition admits of different interpretations, in case of doubt, that interpretation by which the disposition is to be operative shall be pre-ferred. (n)

D. Revocation

Article 829. A revocation done outside the Philippines, by a person who does not have his domicile in this country, is valid when it is done according to the law of the place where the will was made, or according to the law of the place in which the testator had his domicile at the time; and if the re-vocation takes place in this country, when it is in accordance with the provisions of this Code. (n) Revocation:

1. lex loci celebra-tionis

2. lex domicilii3. according to our

Code

Article 830. No will shall be revoked except in the following cases:

1) By implication of law; or

2) By some will, codicil, or other writ-ing executed as provided in case of wills; or

3) By burning, tearing, canceling, or obliterating the will with the inten-tion of revoking it, by the testator himself, or by some other person in his presence, and by his ex-press direction. If burned, torn, cancelled, or obliterated by some other person, without the express direction of the testator, the will may still be established, and the estate distributed in accordance therewith, if its contents, and due execution, and the fact of its unauthorized destruction, cancel-lation, or obliteration are estab-lished according to the Rules of Court. (n)

Problem: Testator revokes his will in then domicile State A and dies in his new domi-cile State B. If his revocation under the laws of State A is invalid under State B laws, what law will apply?

Common law practice: law of the domicile at the time of death.

Philippine law: law of the place of revoca-tion.

Notice that there is a difference in the ap-plicable law governing revocation of wills by a person domiciled in the Philippines and a non-domiciliary:

✪ For domiciliary: the governing law is the law of the place where the revocation was made (lex actus)

✪ For non-domiciliary: the governing law is the law where the will was executed (lex loci celebrationis)

__________________

E. Probate

Probate: an adjudication that the last will and testament of a person was executed with all the formalities required by law

As part of procedural law, probate is gov-erned by the law of the forum.

But the forum will still have to look at the foreign law concerning compliance with ex-trinsic validity.

Rule 76 Section 9 Grounds for disallowing

will.: The will shall be disallowed in any of the following cases;

(a) If not executed and attested as required by law;

(b) If the testator was insane, or otherwise mentally incapable to make a will, at the time of its execution;

(c) If it was executed under duress, or the influence of fear, or threats; (d) If it was procured by undue and im-proper pressure and influence, on the part

69

Notes!


of the beneficiary, or of some other person for his benefit;

(e) If the signature of the testator was pro-cured by fraud or trick, and he did not in-tend that the instrument should be his will at the time of fixing his signature thereto.

Rule 77Section 1. Will proved outside Philippines may be allowed here. Wills proved and al-lowed in a foreign country, according to the laws of such country, may be allowed, filed, and recorded by the proper Court of First Instance in the Philippines.

Testamentary capacity is the capacity to comprehend the nature of the transaction in which the testator is engaged at the time, to recollect the property to be dis-posed of and the persons who would natu-rally be supposed to have claims upon the testator, and to comprehend the manner in which the instrument will distribute his property among the objects of his bounty. (Bugnao vs. Ubag, 014 SCRA 163)

Rule 77 Section 1 + testamentary capacity - will made in a foreign country allowed here in the Philippines !!! (see Article 816)

A will allowed in a foreign country in accor-dance with the law of that country may be allowed in the Philippines… no need to prove testamentary capacity and due exe-cution (see Article 817).

Common Law conflicts rules…1) If the will is valid under the laws

of the last domicile, the will is valid everywhere with respect to movable property

2) but the probate in the last domi-cile does not affect real property, as these will be governed by lex rei sitae

Suntay vs. Suntay (1954)

FACTS: Natividad Billian sought to have the will (executed in the Philippines) of his husband Jose Suntay probated. The trial court denied probate because dur-ing the course of the proceedings, the will was lost. Later, her son Silvino filed a petition for the probate of a will allegedly executed by Suntay in China. The trial court again denied probate, and was cor-

rect in deciding that way, because there was no proof that:

1. the municipal district court of Amoy, China, is a probate court

2. there was a law of China on pro-cedure in the probate or al-lowance of wills

3. the legal requirements for the execution of a valid will in China in 1931 were satisfied

4. the order of the municipal dis-trict court of Amoy purports to probate the will

HELD: In the absence of proof that the municipal district court of Amoy is a pro-bate 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 those provided for in our laws on the subject. Because of this, rules on notice must be followed. Since Silvino did not cause the notification of the other heirs, this petition must fall.

Vda. De Perez vs. Tolete(1994)

FACTS: Each of the Cunanan spouses (Jose and Evelyn) executed a will in New York containing similar provisions on the presumption of survivorship. When the entire family perished in a fire that gut-ted their home in New York, Rafael as the named trustee in the will of Jose filed separate proceedings in New York for the probate of the wills of his brother and sister-in-law. Later, Salud Perez (mother of Evelyn) filed a petition for reprobate in Bulacan. Rafael opposed by arguing that Salud was not an heir as per New York law which must be the law that should govern the wills as they were executed in New York. In deciding the matter, the necessary evidence that should be sub-mitted are:

(1) the due execution of the will in accordance with the foreign laws

(2) the testator has his domicile in the foreign country and not in the Philippines

(3) the will has been admitted to probate in such country

(4) the fact that the foreign tribunal is a probate court

70


(5) the laws of a foreign country on procedure and allowance of wills.

Except for the first and last require-ments, the petitioner submitted all the needed evidence. Salud failed to submit the 1st and 5th requirement. While the probate of a will is a special proceeding wherein courts should relax the rules on evidence, the goal is to receive the best evidence of which the matter is suscepti-ble before a purported will is probated or denied probate. Not only that, Salud also failed to notify the heirs of Jose of the proceedings.

HELD: The rule that the court having ju-risdiction over the reprobate of a will shall "cause notice thereof to be given as in case of an original will presented for allowance" means that with regard to no-tices, the will probated abroad should be treated as if it were an "original will" or a will that is presented for probate for the first time. Accordingly, compliance with Sections 3 and 4 of Rule 76, which re-quire publication and notice by mail or personally to the "known heirs, legatees, and devisees of the testator resident in the Philippines" and to the executor are required.

F. Administration of Estates

Duties of the administrator:

1) to manage and settle the debts of the decedent (primary purpose)

2) to distribute the residuum of the estate to the heirs (secondary purpose)

When the will has been proved or allowed, it is the duty of the probate court to issue letters testamentary thereon to the person so named in the will upon the latter’s appli-cation.

When there is no will, the court may ap-point an administrator.

Two kinds of administrators:

a) domiciliary -power over assets lo-cated in state

b) ancillary- appointed by a foreign court to look after the properties located in such foreign state

Tayag vs. Benguet Consolidated Inc.

(1968)FACTS: BCI stocks owned by the dece-dent Idonah Slade Perkins were in the possession of the domiciliary administra-tor County Trust Company Of New York. Later, the CFI Of Manila named Renato Tayag as the ancillary administrator. When Tayag obtained a court order for the County Trust Company to deposit the stocks to him, BCI appealed.

HELD: The appeal must fail. BCI is a Philippine corporation owing full alle-giance and subject to the unrestricted ju-risdiction of local courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful court or-ders. The situs of shares of stock is the place of domicile of the corporation. And since the power of the ancillary adminis-trator over shares located here is beyond question, it follows that the stocks should be in the possession of Tayag.

Succession and administration of estates are governed by different laws:

✪ succession – national law

✪ administration – situs of property (territorial/JDal)

______________

G. Trusts

Trust: a right of property, real or personal, held by one party for the benefit of the other.

The trust contains an express choice-of-law provision.

The courts usually apply that law in keep-ing with the policy of carrying out the in-tent of the creator of the trust.

When the trust does not contain an express choice-of-law provision, the Court will deem controlling the law that will sustain the va-lidity of the trust.

Choices-of-law for testamentary trusts:

71

Notes!


a) rules governing the intrinsic and extrinsic validity of wills

b) lex rei sitae with respect to the property

XVI. Choice of Law in Torts and Crimes

Tort: derived from the French word tor-quere or “to twist”. It is an act or omission producing an 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.

A. Policies behind Conflicts Tort Law

2 Important Policies underlying substantive tort law:

1) to deter socially undesirable or wrongful conduct

2) to rectify the consequences of the tortuous act by distributing the losses that result from accident and products liability

In view of these, the policy behind tort law will most likely be a strongly held policy of the state and as result, that state will not easily displace its own law with the law of another state.

In determining the applicable law, consider the policies of: a) upholding the justified expectation of parties, and b) minimizing the adverse consequences that might fol-low from subjecting a party to the law of more than one state.

Conflicts torts cases arise:

1) when the tortious conduct and place of resulting injury are differ-ent and one state imposes higher standards than the other state

2) when there are different product liability laws and varying judicial interpretations of the extent of li-ability

Policies:1) deter undesirable or wrongful

conduct2) rectify consequences – by dis-

tributing the losses

✪ similarity between family conflicts cases and torts conflicts cases: strongly held policies of the state

3 concerns in torts:1) achieving just and reasonable re-

sults (consider the interest of both parties

2) societal interest3) shielding defendant from unnec-

essary surprise

Distinguish: “upholding the legitimate ex-pectations of parties” vs. “shielding defen-dant from unnecessary surprise” – the first is used in contracts cases, the second is used in torts cases.

Why is the “place of the tort (locus delicti)” difficult to determine? Different concepts of locus delicti:

1) civil law: place of tortious conduct2) common law: place of injury/

vested rights theory

✪ to determine lex loci delicti: de-termine whether you are dealing with a civil law or common law country

________________

B. Lex loci delicti commissi

Lex loci delicti commissi: the law of the place where the alleged tort was commit-ted. It determines the tort liability in mat-ters affecting conduct and safety.

Difficulty has been encountered in deter-mining the locus delicti where the liability producing conduct happens in one state but the injuries are sustained in another.

Common law concept of place of wrong: place where the last event necessary to make an actor liable for an alleged tort oc-curs. It adheres to the vested rights theory, so that if harm does not take place then the tort is not completed. Negligence or omission is not in itself actionable unless it results in injury to another.

Civil law concept of place of wrong: place where the tortious conduct was committed. This is premised on the principle that the legality or illegality of a person’s act should

72

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be determined by the law of the state where he is at the time he does such act.

The traditional view (whether the situs of the tort is the place of conduct or injury) is that an actor liable by the lex loci delicti is liable everywhere. Damages arising from torts committed in one state are actionable in another state.

Alabama Railroad vs. Carrol: the negligent infliction of an injury in one state creates a right of action there, which may be en-forced in any other state or country the comity of which admits of it.

Loucks vs. Standard Oil Co.(1913)

FACTS: Loucks, a NY resident, was run down and killed by Standard Oil employ-ees in an accident while engaged in its business. Under Massachusetts law, the corporation is liable for the death of a person where the death was caused by the negligence of the corporation’s em-ployees while engaged in its business. However, under NY law, the corporation is liable for such death where the death occurred in NY. The action to recover damages was filed in NY.

HELD: Massachusetts law may be ap-plied. A tort committed in one state cre-ates a right of action that may be sued upon in another unless public policy for-bids. A foreign statute is not law in the state, but it gives rise to an obligation, which, if transitory, follows the person and may be enforced wherever the per-son may be found.

C. Modern Theories on Foreign Tort Liability

1. The Most Significant Rela-tionship

This theory considers the state’s contacts with the occurrence and the parties.

Two-fold purpose: 1) identify the interested state2) evaluate the relevance of these

contacts to the issue in question

The significant-relationship approach does not call for a mechanical counting of fac-

tual contacts where strength is drawn in numbers; instead the court localizes the state of the most significant relation and assesses the event or transaction in the light of the relevant policy considerations of the interested states and these underly-ing policies.

Saudi Arabian Airlines vs. CA(1998)

FACTS: Morada was a flight stewardess of Saudi Airlines. She was involved in an attempted rape case, which led to her conviction of violation of Islamic laws in Saudi. The Prince of Makkah ruled that she was wrongfully convicted. However, she was terminated from her employ-ment by Saudia.

HELD: The RTC of Manila has JD to try the case, applying the “state of most sig-nificant relationship rule.” The following contacts should be considered in using this rule: place where the injury oc-curred, place where the conduct causing injury occurred, domicile/residence/na-tionality/place of business of the corpora-tion, and place where the relationship between the parties is centered.

In CAB, the Philippines had the most sig-nificant contacts. The overall injury oc-curred in the Philippines, Morada is a res-ident and a Filipina national, Saudia is a foreign corporation engaged in business here, and the relationship of the parties is centered here.

2. Interest Analysis

This approach considers the relevant con-cerns the state may have in the case and its interest in having its law applied on that issue.

The court should first determine whether there is a true or false conflict.

False conflict: only one state has an inter-est in having its law applied, and failure to apply the other state’s law would not im-pair the policy reflected in that law.

Apparent conflict: more than one state has an apparent interest in applying its law to the case.

Prof. Currie: if only one state has a real in-terest in the case and the other state’s in-

73


terest is insubstantial then there is a false conflict. However, if both states have a real interest in applying their law then the ap-parent conflict becomes a true conflict.

Problem with Interest Analysis approach: are the policies of the law always dis-cernible? Sometimes we merely guess the policies of the state (because unarticulated in the law).________________

3. Cavers’ Principle of Pref-erence

This principle deals with rules that sanction some kinds of conduct engaged in by a de-fendant in one state and extends the bene-fit of this higher standard of conduct and fi-nancial protection to the plaintiff even if the state of injury does not create analo-gous liabilities.

Pangalangan: Since both states consider that a tort has been committed, the law of the state which places a higher standard of conduct should apply. This is true even if this is the place of tortious conduct and not the place of injury.

Schmidt vs. Driscoll Hotel(1957)

FACTS: Schmidt sued Driscoll Hotel for il-legally selling liquor to Sorensen, who was the driver of a vehicle which turned over in Wisconsin. Schmidt was a pas-senger of that vehicle and sustained in-juries as a result of the accident. The suit was filed in Minnesota, where the illegal sale was conducted.

HELD: Minnesota court has jurisdiction, even if the injury which followed the ille-gal sale occurred outside Minnesota. The Restatement should not be applied where the plaintiff would have no rem-edy against the offending liquor dealer. Under the principles of equity and jus-tice, the Minnesota law granting him a remedy should be applied, considering that all the parties are residents of Min-nesota, Driscoll Hotel was licensed under Minnesota law, the violation of Minnesota law occurred there, and the wrongful conduct was completed by Sorensen in Minnesota.

Schmidt illustrates the imposition of liabil-ity under a substantive rule of tort law that has a strong underlying admonitory policy.

American Contributions to Conflicts Tort Law

The determination of whether the law where the tort was committed or the law of the domicile of the parties is the controlling law is considered one of the major contri-butions of American jurisprudence to inter-national conflicts thought.

Law of the tort: deemed as the proper law in questions involving regulation of con-duct.Law of the domicile of the parties: governs in matters that relate to loss-distribution or financial protection.

In modern approaches, there is a distinc-tion between true or false conflict.

✪ True conflict: both states have an interest in having their law ap-plied

✪ “maybe true” conflict

✪ false conflict: no choice necessary – the court should apply the law of the only interested state

_______________

D. Foreign Tort Claims

Tortious liability is transitory – the liability resulting from the tort is deemed personal to the perpetrator of the wrong, which fol-lows him wherever he goes. Compensa-tions may be exacted from him in any proper tribunal; the right to sue is not con-fined to the place where the cause of ac-tion arises.

i. Conditions for the en-forcement of tort claims

a) the foreign tort is based on a civil action and not on a crime

b) the foreign tort is not contrary to the public policy of the forum

c) the judicial machinery of the fo-rum is adequate to satisfy the claim

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Notes!

Notes!


The defendant in a transnational tort is of-ten sued in a foreign court against his will; his consent to be sued is not necessary for the acquisition of jurisdiction by the court. Hence, questions as to the legitimacy of the JD and validity of the decision may arise.

ii. Products liability of the foreign manufacturer

Conflicts torts cases arise due to significant differences in the laws of states on the ba-sis and extent of liability for defectively manufactured products.

Asahi Metal Industry vs. Superior Court of California

(1987)FACTS: Asahi Metal manufactures tire valve assemblies in Japan and exports them, including to a Taiwanese company which, in turn, incorporates them into finished tires sold in the US. The driver of a motorcycle, who had an accident re-sulting in injuries to him and death to his passenger, sued the Taiwanese com-pany. The Taiwanese company filed a cross-complaint against Asahi.

HELD: The California court has no JD over Asahi Metal. The constitutional touch-stone/test of due process is whether the defendant purposefully established “min-imum contacts” in the forum state. And “minimum contacts” must have a basis in some act by which the defendant pur-posefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and pro-tections of its laws.

In the CAB, no purposeful availment of the California market on the part of Asahi. It does not do business in Califor-nia; has no office, agents, employees, or property in Cal.; does not advertise or otherwise solicit business there; and did not create, control, or employ the distri-bution system that brought its valves to California.

Societe Nationale Industrille Aerospatiale vs. Lee Kui Jak: An Aerospatiale helicopter crashed in Brunei, killing a passenger who

was a Brunei resident. The administrator of the estate brought the action in Texas, where Aerospatiale does business. Held: Brunei (where the deceased lived and the helicopter crashed) was the natural forum for the trial for an action for damages against the manufacturer of the helicopter, and it would be oppressive for the plaintiffs to continue with the Texas proceedings as Aerospatiale would not be able to pursue legal proceedings against the Malaysian company which operates and services the helicopter.

Bier vs. Mines de Potasse: A Dutch market gardener filed an action for damages in a Dutch court against a French mining com-pany. The Dutch court held that it had no JD, but the French court held that the plain-tiff could elect where to sue (place of dam-age or place of injurious conduct).

Sovereignty as Basis of Jurisdiction

The sovereignty model has been accepted both to:

a) justify any exercise of jurisdiction over a defendant present within the territory, however short (“tag jurisdiction”)

b) deny enforcement of a foreign court judgment over a defendant who was not present within that court’s jurisdiction

Worldwide Volkswagen Corp. vs. Woodson

(1980)FACTS: The spouses Robinson purchased a car from Seaway Volkswagen in New York. They met an accident in Oklahoma and pinned the blame on the defective design of the car. They brought a suit against the retailer and distributor in Ok-lahoma.

HELD: Oklahoma court has no JD. A state court may exercise personal JD over a nonresident defendant only so long as there exist “minimum contacts” between the defendant and the forum state. The 2 functions of the concept of minimum contacts is to protect the defendant against the burdens of litigating in a dis-tant or inconvenient forum, and to en-sure that the states, through their courts, do not reach out beyond the lim-

75


its imposed on them by their status as coequal sovereigns in a federal system.

In CAB, there us a total absence of those affiliating circumstances that are a nec-essary predicate to any exercise of state-court JD (no activity whatsoever on Okla-homa; no sales closed nor services per-formed there; no availment of the privi-leges and benefits of Oklahoma law; no solicitation of business there).

In Asahi, even if there were minimum con-tacts, it failed the reasonableness test.

Criticism of Asahi: “additional acts” require-ment is a reinvention of the stream of com-merce law. The fear is that the court might go back to pre-International Shoe stan-dards n JD (requirement of actual pres-ence).

In Worldwide Volkswagen, the only require-ments for the exercise of JD were minimum contacts and the reasonableness test; Asahi did not follow this, and include an ad-ditional requirement (purposeful avail-ment). ________________

iii. The Alien Tort Act

The Alien Tort Statute granted US district courts original JD over any civil action by an alien for a tort committed in violation of the law of nations or a treaty of the US.

Hilao vs. Estate of Ferdinand Marcos(1996)

FACTS: A class suit was brought against Marcos by parties seeking damages for human-rights abuses committed against them or their decedents. The Hawaii dis-trict court found for Hilao and ordered a verdict of almost $2 billion in damages. The Estate in its appeal, argues that the Alien Tort Claims Act does not apply to conduct that occurs abroad, and since the acts complained of all occurred in the Phils., the court has no JD

HELD: The court has JD. In a prior appeal it has been held that subject-matter JD was not inappropriately exercised even

though the actions xxx occurred outside the US.

Filartiga vs. Pena-Irala(1980)

FACTS: Plaintiffs brought an action in the US against Pena-Irala for wrongfully causing the death of Dr. Filartiga’s son in Paraguay.

HELD: The US federal court has JD, on the basis of the Alien Tort Statute. This action is undeniably an action by an alien, for a tort only, committed in viola-tion of the law of nations. A wrong is rec-ognized as a violation of the law of na-tions where the nations of the world have demonstrated that the wrong is of mutual, and not merely several, concern.

*The concept of accountability, if consid-ered the core of the Alien Torts Act (as espoused by the US Justice Department in Trajano vs Marcos), would be a signifi-cant setback to the advancement of in-ternational law.

Guinto vs. Marcos(1986)

FACTS: Guinto and Suarez filed an action for damages against Marcos in California under the Alien Tort Claims Act. Accord-ing to Guinto, Marcos’ act of seizing their film “100 Days in September” violated their freedom of speech.

HELD: Test to determine when a viola-tion of the law of nations has occurred – there has been a violation by one or more individuals of those standards, rules or customs a) affecting the relation-ship between states or between an indi-vidual and a foreign state, and b) used by those states for their common good and/or dealings inter se. A violation of the First Amendment right of free speech does not rise to the level of such univer-sally recognized rights as to constitute a violation of the law of nations.

The Alien Tort Statute justifies exercise of court JD over completely foreign tort cases because of the universal evil exemplified by human rights violations. This is so even

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Notes!


though there are no significant contacts between the courts and the parties and events nor substantial state interest in the case other than a general desire for com-pliance with customary international law. That is why in order for the Alien Tort Act to apply, there is a need to establish that the tortious conduct violated an interna-tionally protected human right.

iv. Philippine Rule on Foreign Torts

There is no specific statutory law governing the enforcement of claims for damages arising form foreign torts. But on the theory of vested rights the victim of a foreign tort may decide to file the case in the Philip-pines.

It has been suggested that the English Rule may be followed, such that the tort com-mitted abroad is actionable in the country where it was committed and also under Philippine law.

Two conditions for a case based on a for-eign tort to be filed in the Philippines (Eng-lish Rule):

1) the wrong must be of such a char-acter that it would have been ac-tionable if committed in the Philip-pines

2) the act must not have been justifi-able by the law of the place where it was done

Time, Inc. vs. Reyes(1971)

FACTS: Villegas and Enrile filed a com-plaint for damages against Time, Inc. upon an alleged libel arising from a pub-lication of Time Magazine. Plaintiffs filed their action in CFI Rizal. But according to the applicable law, they may file the ac-tion only in the place of first publication or in the City of Manila (since they are public officers).

HELD: The case should be dismissed for improper venue. The only alternative al-lowed to the public official is to prose-cute in the place where the offending ar-ticle was printed and first published; but in the CAB the alternative was not open

to plaintiffs since the offending publica-tion was not printed in the Philippines.

In Time, Inc., if the court had not character-ized 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 ap-proach because of the significant links be-tween the forum and the parties.

In ordinary foreign tort, the court acquiring JD must be either the place of tortious con-duct or place of injury. In Alien tort Statute, US courts may acquire JD even if it is nei-ther the place of tortious conduct nor place of injury.

“law of nations” (Filartiga): “mutual” con-cern – nations consider the act to be detri-mental to all nations; it is a violation of a law of all countries.

Guinto: violation of law of nations test—1) the violation affects relationship

between states, or an individual and a foreign state

2) used by the states for their com-mon good and/or dealings inter se

_______________

E. Distinguishing between Torts and Crimes

Tort Crime

Transitory in charac-ter; hence liability is deemed personal to the tortfeasor and make him amenable to suit in whatever JD he is found

Local in character; the perpetrator of the wrong can be sued only in the state wherein he commits the crime

An injury to an indi-vidual who may be situated in any place

An injury to the state where it is commit-ted

Liability is attached to the perpetrator to indemnify the victim for injuries he sus-tained

Promulgated to pun-ish and reform the perpetrators and de-ter them and others from violating the

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Notes!


law

F. Lex loci delicti Under the territorial principle, crimes com-mitted within the Philippines by all persons, whether Filipino citizens or aliens, are pros-ecuted and penalized under Philippine law. As a rule, criminal laws of a state are effec-tive only upon persons who actually com-mit the crime within the state’s territory.

The lex loci delicti or the law of the place where the crime was committed is the con-trolling law since it determines the specific law by which the criminal is to be penal-ized, and designates the state that has the JD to punish him.

3 Exceptions to the Territorial rule:

1) First Exception: crimes committed by state officials, diplomatic rep-resentatives and officials of recog-nized international organizations (based on doctrine of state immu-nity)

Wylie vs. Rarang(1992)

FACTS: Wylie and Williams are officers of the US Navy stationed in the Subic Naval base, and are in charge of the publica-tion “Plan of the Day.” Rarang filed an ac-tion for damages against them for li-belous statements published in the POD.

HELD: Wylie and Williams are not im-mune from the suit. They are sought to be held answerable for personal torts in which the US is not involved; if found li-able, they alone must satisfy the judg-ment. The Bases Treaty provision on im-munity could not possibly apply in this case, as it is presumed that the laws of the US do not allow the commission of crimes in the name of official duty. The general rule is that public officials can be held personally accountable for acts claimed to have been performed in con-nection with official duties where they have acted ultra vires or where there is showing of bad faith.

This immunity for sovereign acts is im-pliedly waived when the foreign state and

its officials perform private, commercial or proprietary acts.

In Rarang, although the publication was part of the duty of Wylie and Williams, the goal of the publication of the complaint would have been achieved without identify-ing Rarang by name.

Liang (Huefeng) vs. People(2000)

FACTS: Liang, a Chinese working at the ADB, was charged by a fellow worker with grave oral defamation. The lower court dismissed the complaint on the ground that Liang is covered by the im-munity provision under the Agreement between ADB and the Phil. Government.

HELD: Liang is not immune from suit. The immunity under the Agreement is not absolute, and it only extends to acts done in official capacity. Slandering a person could not possibly be covered by the immunity agreement because our laws do not allow the commission of a crime, such as defamation, in the name of official duty.

2) Second Exception: crimes com-mitted on board a foreign vessel even if it is within the territorial waters of the coastal state

In the Philippines, our courts will not ac-quire JD over offenders nor can Phil. laws apply as long as the effect of such crime does not disturb our peace and order.

US vs. FowlerFACTS: Fowler et al were accused of theft on board the US vessel Lawton while it was traveling on the high seas.

HELD: Philippine courts have no jurisdic-tion over Fowler. Act 400 granting JD to RP courts for crimes and offenses com-mitted on the high seas, apply to ship or water craft registered or licensed in the Philippines only. In the CAB, the Lawton was not registered in the Philippines; it was a US vessel.

People vs. Wong Cheng

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Notes!


(1922)FACTS: Wong was charged for having il-legally smoked opium on board an Eng-lish vessel Changsa while anchored in Manila Bay.

HELD: Under the English rule which is ap-plicable here (it is the prevailing theory in the US), to smoke opium within our territorial limits, even though aboard a foreign merchant ship, is certainly a breach of the public order here estab-lished. It causes such drug to produce its pernicious effects within our territory. It seriously contravenes the purpose that our Legislature had in mind in enacting the repressive statute, and is therefore triable in our courts.

US vs. Look Chaw(1910)

FACTS: Two sacks of opium were found to be in the control of Look Chaw aboard the Erroll, an English steamship. A com-plaint for possession and sale of opium was filed against him.

HELD: Philippine courts have jurisdiction. Although the mere possession of an arti-cle of prohibited use in the Philippines, aboard a foreign vessel in transit, in any local port, does not as a general rule constitute a crime triable by the courts of the Islands, such vessel being consid-ered as an extension of its own national-ity, the same rule does not apply when the article, the use of which is prohibited in the Islands, is landed from the vessel upon Philippine soil.

3) Third Exception: crimes which, al-though committed by Philippine nationals abroad, are punishable under Philippine law (ex. Art. 2 RPC)

Fowler Cheng Look Chaw

FLAG US English English

LOCA- High Within RP Within RP

TION seas territorial waters

territorial waters

CRIME theft Smoking opium

Posses-sion and selling of

opium

RESULT No JD Acquired JD

Acquired JD

In RP, we follow the French Rule.

XVII. Choice of Law Affecting Corporations and Other Juridical Entities

A. Corporations

A corporation is an artificial being created by operation of law, having the right of suc-cession and the powers, attributes and properties expressly authorized by law or incident to its existence.

Foreign corporation – formed under the laws of a state other than the Phils; such laws allowing Filipino citizens and corpora-tions to do business there. It shall have a right to do business here only after obtain-ing a license and a certificate of authority from the appropriate government agency.

1. Personal Law of a Corpo-ration

The personal law of the corporation is the law of the state where it is incorporated. If the law creating it does not authorize it to enter into certain contracts, such contracts which can be made in other states shall be void despite the express permission given by the other state.

ME Gray vs. Insular Lumber Co.(1939)

FACTS: Gray, a stockholder of Insular (in-corporated in NY) filed an action in CFI to compel Insular to allow him to examine its books. Sec. 77 of NY Stock Corp Law only gives the right to stockholders own-ing 3% of the capital stock of the com-pany. Gray does not own the required shares.

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Notes!


HELD: Gray is not entitled to the right to examine the books of Insular. Gray is bound by the NY law which only gives him the right to receive from the trea-surer of the corporation a statement of affairs covering a particular account of all its assets and liabilities. Neither can his rights be granted under common law absent a showing that: a. he seeks information for an honest

purpose or to protect his interest as stockholder

b. he exercises right in good faith and for a specific and honest purpose not merely to satisfy curiosity or for speculative or vexatious purposes.

Anglo American Theory on Corporations

Bank of Augusta vs. Earle(1839)

FACTS: Bank of A (incorporated in Geor-gia), thru M’Gran bought bills from Earle in Alabama. Bills were unpaid so Bank sued Earle. TC ruled that the Georgian Bank could not exercise power in Al-abama thereby making the contracts void.

HELD: Bank can exercise its powers in Alabama and the contracts are therefore valid. It is well-settled that by the law of the comity of nations, a corp. created by 1 sovereignty is permitted to make con-tracts in another and sue in its courts and that the same law of comity prevails in several States of US including Al-abama. Alabama courts have held that a foreign corp may sue in its courts based on the comity of nations.

Four Basic (Important) Theories from the case:

1) a corporation, being a creature of law, has no legal status beyond the bounds of the sovereignty within which it was created

2) a corporation cannot exercise powers not granted by its corpo-rate charter or by the laws of the state of incorporation

3) no state is under any obligation to adhere to the doctrine of comity (every state has the power to refuse recognition)

4) a state is not obliged to grant to a foreign corporation the privileges and immunities common to its cit-izens

The power of a foreign corporation de-pends upon the laws of the state recogniz-ing it. It may impose conditions or limita-tions subject to a few exceptions as de-cided by US courts, to wit:

a) commerce clause – prohibits a state from imposing conditions on corporations engaged in inter-state commercial activities and provides the basis of federal power to regulate interstate com-merce.

b) Since it is considered a “person”, once allowed to enter a state and acquire property, it cannot be dis-criminated against by domestic corps

c) Unconstitutional conditions – for-bids 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 re-moved from that state

A foreign corporation, although a person, is not a citizen entitled to the privileges given by the state to its individual citizens.

If according to the personal laws of the cor-poration, stockholders are given certain rights, such rights cannot be diminished nor added upon by the law of the place where the corporation does business. This is because such rights are already fixed by the corporation.________________

2. Exceptions to the Rule of Incorporation Test

a. Constitutional and Statutory Restrictions

A state may, by legislation, exclude a for-eign corp altogether, subject to the consti-tutional limitations, or prescribe any condi-tions it may see fit as a prerequisite to the corporation’s right to do business within its territory.

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Notes!


1987 Phil Constitution:

a. regulates exploration, develop-ment and utilization of natural re-sources such that only 60% Fil-ipino-owned corps may be al-lowed to engage in these activi-ties

b. the nation’s marine wealth and the exclusive economic zone is re-served exclusively to Filipinos

c. Congress is empowered to re-serve certain areas of invest-ments to 60 % Filipino owned corps or provide for a higher per-centage (e.g. mass media – 100%)

Pedro Palting vs. San Jose Petro-leum

(1966)FACTS: Palting opposes the tie-up be-tween San Jose Petroleum (a Panama-nian corp.) and San Jose Oil (domestic corp.) as being violative of the Constitu-tion and the Petroleum Act. SJP claimed that it is entitled to the Parity Amend-ment which grants to US citizens the right to use & exploit natural resources in the Phils because its stockholders are US citizens.

HELD: SJP is not covered by the Parity Agreement. It is not owned or controlled directly by US citizens. It is owned by an-other Panamanian corp., Oil Investments. Oil Investments on the other hand is owned by 2 Venezuelan corps. Even as-suming that the stocks of the 2 Venezue-lan corps are owned by US citizens, to hold that the set-up in CAB falls within the Parity Amendment is to unduly stretch and strain the language and in-tent of the law. There would be practical impossibility to determine at any given time the citizenship of the controlling stock.

b. Control Test During the War

During wars, courts may pierce the corpo-rate identity and look into the nationality of stockholders to determine the citizenship of the corp.

Filipinas Compania de Seguros vs. Christern, Huenfeld, Co., Inc.

(1951)FACTS: Christern (German Co.) filed a claim against Filipinas (US Co.) for recov-ery on fire insurance policies issued by the latter. F refused to pay claiming that the policies ceased to be in effect on the date the US declared was against Ger-many. Dir. Of Bureau of Financing di-rected F to pay C.

HELD: The policy ceased to be valid and binding because of the fact that majority of the stockholders of C are Germans and it became an enemy corporation when war was declared. Under Phil Insur-ance Code, anyone except a public en-emy may be insured. C is a public enemy at the time the insurable risk occurred. But C is entitled to a return of the premi-ums paid.

Filipinas Compania case was decided that way because of the government interest in-volved._______________

Daimler Co. Continental Tire and Rubber Co.: HELD: An English corporation with an English secretary but whose shares of stock are controlled by German nationals was considered an enemy corporation and prohibited from trading in England. It ruled that the company itself was incapable of loyalty or enmity. These qualities are at-tributable only to human beings. The com-pany therefore had the predominant char-acter of its shareholders being Germans.

3. Domicile or Residence of Foreign Corporations

Art. 51, CCWhen the law creating or recognizing them, or any other provision, does not fix the domicile of juridical persons, it is un-derstood to bea. the place where legal representation

is establishedb. where they exercise their principal

functions

A foreign corp. granted license to do busi-ness here acquires a domicile in the Phils.

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Notes!


State Investment House vs. Citibank(1991)

FACTS: CMI obtained loans from Citibank. CMI defaulted. Citibank filed petition for involuntary insolvency against CMI with CFI, Rizal. State Investment, a creditor of CMI, opposed claiming that Citibank had no jurisdiction because the banks are not resident creditors of CMI.

HELD: The Phil branches of the bank are residents of the Phils being resident for-eign corporations as defined in the Tax Code and other Banking Laws. What ef-fectively makes a foreign corp a resident corp in the Phils is its actually being in the Phils and licitly doing business here (locality of existence) The grant of li-cense merely gives legitimacy to its do-ing business here but it does not make the corp a resident. Also, the failure of the bank to aver categorically that they are residents are not fatal to the cause of action where it alleged that it is a for-eign bank licensed to do business here.

4. Jurisdiction Over Foreign Corporations

The dictum that a corporation has force only in the incorporating state and no exis-tence outside that state has been aban-doned. The prevailing rule is, with the con-sent of a state, a foreign corp. shall be rec-ognized and will be allowed to transact business in any state, which gives its con-sent.

Requirements for License: Secs. 125-128, Corpo Code)a. sworn applicationb. copy of articles of incorporationc. designation of an agentd. sworn certification of an official of the

incorporating state that a similar right is given to Filipinos in that state and that the foreign corp. is in good stand-ing

e. statement under oath by the official of the corp. attesting that the corp is solvent and in sound financial condi-tion

Foreign Corporations doing Business are Bound by Philippine Law

Art. 129, Corp CodeAll foreign corporations lawfully doing busi-ness in the Philippines shall be bound by all laws, rules and regulations applicable to domestic corporations.

Exceptions: 1. laws on creation, formation, organiza-

tion or dissolution of corporations2. laws which fix the relations, liabilities,

responsibilities or duties of stockhold-ers, members or officers of the corp to each other

Rule 14, Sec. 14 ROCService upon foreign corporations doing business in the Phils. may be made on the:

1. resident agent2. in the absence thereof, to the govern-

ment official designated by law or any of its officers or agents within the Phils

3. on any officer or agent of the corp in the Phils

*a fourth method is established by case law: service thru diplomatic channels

5. Right of Foreign Corpora-tion to bring Suit

Acquisition of a license by a foreign corpo-ration is an essential prerequisite for filing of suit before our courts.

Art. 133, Corp Code states that these cor-porations may be sued or proceeded against before Phil courts or administrative tribunals on any valid cause of action rec-ognized under Phil law.

Home Insurance Co. vs. Eastern Shipping Lines

(1983)FACTS: Home Insurance was subrogated to the rights of shippers against eastern Shipping for damages on cargo. Eastern refused to pay. HI filed action to recover sum of money. TC dismissed because HI failed to prove capacity to sue.

HELD: HI has capacity to sue because at the time the complaints were filed, it al-

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ready had a license to conduct insurance business in the Phils. Insurance contracts are not null and void for lack of license at the time it was entered into. The Corp. Code is silent on the status of the said contracts. Also, the object of the law in requiring registration is to subject the foreign corp. to the JD of our courts.

Atlantic Mutual Insurance vs. Cebu Stevedoring

(1966)FACTS: Cebu Stevedoring carried copra for Procter & Gamble. Copra were in-sured with AMI. Bec. of damages, AMI sued Cebu Stevedoring. CS filed a MTD bec. AMI had no capacity to sue. TC ruled that it must allege that it has a license to be able to sue.

HELD: Such allegation is unnecessary. However, AMI’s mere allegation that it is a foreign corp is not sufficient. It must state WON it is doing business in the Phils bec different rules attach to the same. If it is engaged in business, it must be licensed to be able to sue. If not so engaged, the license is not required and it may sue esp. if it is a single/iso-lated transaction.

6. Exceptions to License Re-quirement

a. Isolated Transactions

This has been defined as one which is oc-casional, incidental and casual, not of a character to indicate a purpose to engage in business. It does not constitute “doing business” under the law.

Eastboard Navigation vs. Ysmael & Co.

(1957)FACTS: Eastboard was able to secure a favorable decision from NY arbiters against J.Y. & Co. It brought an action for enforcement of a money claim against JY & Co. in the Phils. JY opposed alleging that E had no capacity to sue.

HELD: E has capacity to sue. The license is not necessary because it is not en-gaged in business in the Phils. The 2 iso-lated transactions do not constitute en-

gaging in business within the purview of the Corpo Law.

b. Action to Protect Trademark, Trade Name, Goodwill, Patent or for Unfair Competition

Even without a license, a foreign corpora-tion may file complaint for unfair competi-tion since it is a suit enjoining the unfair trader from pursuing the unlawful competi-tion & for the aggrieved party to recover damages. This is based on equity consider-ations.

Converse Rubber vs. Jacinto Rubber:FACTS: Converse owns the trademark of “Converse Chuck Taylor All Star”. Jacinto manufactures shoes of identical appear-ance. Hence, this suit.

HELD: Sec 69 of the Corp Law does not disqualify Converse from filing the suit although it is unlicensed to do business and is not doing business in the Phils. This is in compliance with the Conven-tion of Paris for the Protection of Indus-trial Property from which the Phils ad-heres to and which US is a signatory.

Leviton Industries vs. Salvador(1982)

FACTS: Leviton Manufacturing (US) sued Leviton Industries (Phil) for unfair compe-tition bec. the latter uses the trademark Leviton. Defendant filed MTD for failure to allege capacity to sue.

HELD: Plaintiff failed to allege capacity to sue.1. All that Leviton Manufacturing al-

leged is that it is a foreign corpora-tion. It should have, in addition, al-leged the ff pursuant to Sec. 21-a:

a. it registered its trademark with the Phil. Patent Office or that it is an as-signee of the trademark, and

b. that the country of which it is a citi-zen or domiciliary grants to Filipino corps the same reciprocal treat-ment, either in a treaty, convention or law.

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2. It also violates Sec. 4, Rule 8 of the Rules of Court, which states that:

Facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a repre-sentative capacity or the legal exis-tence of an organized association of persons that is made a party, must be averred.

c. Agreements Fully Transacted Outside the Philippines

A foreign corporation is allowed to maintain an action on a transaction wholly cele-brated and consummated abroad so as not to impair the policy of stabilizing commer-cial transactions.

Universal Shipping Lines vs IACHELD: The private respondent may sue in the Phils upon the marine insurance policies to cover international-bound car-goes shipped by the carrier. It is not the lack of the license but doing business without such license which bars a foreign corporation from access to our courts.

Hang Lung Bank vs. Saulog(1991)

FACTS: Hang Lung Bank, not doing busi-ness in the Phils, entered into continuing guarantee agreements with Cordova Chin San in HongKong for the debts of Wolder Enterprises. Wolder defaulted so Hang Lung sued Wolder and Chin San. No payment was made so it sued Chin San in RTC, Makati for enforcement of its money claim. Chin San moved to dismiss for incapacity to sue.

HELD: A foreign bank not doing business in the Phils, such as Hang Lung, may sue a resident for contracts entered and con-summated outside the Phils.Reasons for rule: if not adopted,

a. it will hamper the growth of busi-ness between Filipinos and foreignersb. it will be used as protection by un-scrupulous Filipinos who have busi-nesses abroad

d. Petition Filed is Merely a Corollary De-

fense in a Suit against it

Time Inc. vs. ReyesHELD: The court allowed a foreign corp is not maintaining a suit in our courts but is merely defending itself when it files a complaint for the sole purpose of pre-venting the lower court from exercising jurisdiction over the case. As such, it is not required to allege its capacity to sue.

Phil. Columbia Enterprises vs. Lantin(1971)

FACTS: Katoh & Co. filed a complaint against Phil Columbian. Phil Columbian challenged its capacity to sue. TC de-ferred the determination of this issue un-til trial on the merits. PC opposed claim-ing that if it files a counterclaim, it will be waiving its right to assail the capacity to sue of Katoh.

HELD: A counterclaim is a complaint against the plaintiff. It would not be the foreign corp who will be maintaining a suit. Therefore, Sec. 69 of the Corp Law will not apply.

7. Definition and Scope of Transacting Busi-ness

A foreign corporation may do business, state consent being presumed, 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 public policy

3. where it is seeking to exercise extra-ordinary 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” (Foreign Investments Act)

- soliciting orders,

- service contracts,

- opening offices whether called “liai-son” offices,

- appointing representatives if the lat-ter stays for at least 180 days,

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- participating in the management, su-pervision or control of any domestic business

- and any other act that imply a conti-nuity of commercial dealings

- and contemplate in the performance of acts or works

- the progressive prosecution of com-mercial gain or of the purpose/object of the business organization

What is not doing business:1. mere investment as a shareholder2. exercising of rights as investor3. having a nominee director or officer

to represent interests4. appointing a representative or distrib-

utor in the Phils which transacts busi-ness in its own name and for its own accounts

Doing business serves as the basis for juris-diction over corps on the theory that they are present in the state or have consented to suit by making that state a major place of business.

Avon Insurance vs. CA(1997)

HELD: A reinsurance company is not do-ing business in a certain state merely be-cause the property or lives which are in-sured by the original insurer company are located in that state since the rein-surance contract is usually a separate and distinct arrangement from the origi-nal contract of insurance, whose con-tracted risk is insured in the reinsurance agreement.

The term “doing business in the Phils” implies a continuity of commercial deal-ings and arrangements and contem-plates, to that extent, the performance of acts or works or the exercise of func-tions normally incident to and in the pro-gressive prosecution of the purpose and object of its organization.

Wang Laboratories vs. Mendoza(1987)

FACTS: Wang Lab (US corp) sells its products in the Phils thru its exclusive distributor, Exxbite. ACCRS sued WL for breach of contract for failure to develop the software program contracted. WL

filed MTD on the basis of lack of jurisdic-tion over its person bec. the service was invalid it being a foreign corp not en-gaged in business in the Phils.

HELD: WL is “doing business” in the Phils. It has installed 26 products in the Phils and has registered its tradename with PPO. It allowed E to use such trademark and to advertise the same.

Thus, it cannot be said that the case in-volved an isolated or single transaction. The transaction is not merely incidental or casual but is of such nature as to indi-cate a purpose to do other business in the State.

CIR vs. JAL(1991)

FACTS: JAL was assessed deficiency in-come tax by CIR for the sales of its tick-eting agent (PAL) in the Phils. JAL op-posed and claimed that as a non-resi-dent foreign corp. it can only be taxed on income from Phil sources.

HELD: JAL is a resident foreign corpora-tion under the Tax Code. For a foreign corporation to be regarded as doing busi-ness, there must be a continuity of con-duct and intention to establish a continu-ous business (i.e. appointment of a local agent) and not a temporary one. JAL con-stituted PAL as a local agent to sell tick-ets which is the lifeblood of airline tick-ets, the generation of sales being its paramount objective.

Merrill Lynch Futures vs CA(1992)

FACTS: Lara spouses entered into a Fu-tures Customer Agreement with Merrill Lynch Futures Inc. They become in-debted to it after a loss in the business. Laras refused to pay and claimed that the transactions were void because MLFI had no license to operate as a commod-ity or financial futures broker.

HELD: MLFI had the capacity to sue and Laras are estopped from denying the same after having done business with it over many years. The purpose of apply-ing the doctrine of estoppel is to prevent persons from taking undue advantage of

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a corp’s non-compliance with the statutes where such person received benefits under their contract.

Granger vs. Microwave Systems(1990)

FACTS: Granger (US) sued MSI (Phil) for recovery of a sum of money. MSI did not pay and claimed that G had no capacity to sue bec. it was unlicensed.

HELD: G had no capacity to sue because of its being an unlicensed foreign corp doing business in the Phils. Neither does it fall under the established exceptions. Granger had the burden of showing that the finding fell under an exception. The purpose of requiring license is to enable Phil courts to exercise jurisdiction over them. If the foreign corp operates here without submitting to our laws by secur-ing a license, they may not be allowed to invoke our laws for their protection.

B. Special Corporations

1. Religious Societies and the Corporation Sole

A religious society, if controlled by aliens, is not permitted to acquire lands.

A corporation sole is an incorporated office composed of only one person as in the cases of the chief archbishop, bishop, priest, minister or an elder of a religious sect which may form a corporation sole for the purpose of managing its affairs, prop-erty and temporalities.

Roman Catholic Administrator vs. LRC

HELD: The 60% Filipino capital require-ment to own lands was not intended to apply to corporations sole because it is composed of one person usually a head or bishop of a diocese but he is only the administrator and not the owner of the temporalities. Such are administered for and in behalf of the faithful who are Fil-ipino citizens.

2. Transnational Corpora-tions

Transnational corporations are clusters of several corporations, each with a separate entity, existing and spread out in several countries, but controlled by the headquar-ters in a developed state where it was orig-inally organized.

But the transnational corporations are es-tablished under and governed by each host country’s national laws.

However, all locally incorporated branches are joined together by the common control and management of higher officials in the home state.

As to liability, the single unit comprising the cluster is held liable according to the laws of the host country but the transna-tional corporation, in its entirety, is not an-swerable to any legal order.

Derivative Jurisdiction over Foreign Corpo-rations (parent-subsidiary)2 Important Issues1. whether ownership by the parent over

the subsidiary’s stock is enough to give jurisdiction over the subsidiary

2. whether the activities of the sub-sidiary in a state will give that state jurisdiction over he parent corporation

Restatement 2nd:Jurisdiction over the parent will exist if the parent controls and dominates the sub-sidiary. In determining whether the sepa-rate corporate existence of the subsidiary has been adequately preserved, the courts will consider whether the subsidiary has its own records, assets, advertising, employ-ees, payroll and accounting and whether its directors and headquarters are different form those of the parent.

In the converse situation, jurisdiction over the parent may give jurisdiction over the subsidiary if the separate corporate exis-tence of each has not been adequately maintained or if the parent has acted within the state as the subsidiary’s agent.

C. Partnerships

Partnership is formed by 2 or more persons who bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves.

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Phil internal law provides that if the domi-cile of the partnership is not identified by the law creating it, it is deemed domiciled in the place where it has its legal represen-tation or where it exercises its principal functions.

What matters are governed by the per-sonal law of the partnership?1. nature, attributes and capacity to

contract of the partnership2. whether or not a partnership has

been constituted (esp. the conditions and formalities required)

3. determination of WON it requires a separate juridical personality (Com-mon law does not consider a partner-ship a legal person but civil law en-dows partnerships with a separate le-gal personality)

4. grounds for dissolution and termina-tion of partnerships

5. liability of partners esp. if limited part-nership is allowed

What are governed or subject to the law of the place of business?

1. entitlements and limitations, in gen-eral

2. creation of establishments in the state

3. mercantile operations4. jurisdiction of nations

✪ Domestic Corp.:a) Can sueb) Can be sued

✪ Foreign Corps.1) Doing Business

a. With license – can sue and be sued

b. Without license – cannot sue, can be sued

2) Not Doing Business (isolated transaction) – can sue and be sued

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PART FIVE: FOREIGN JUDGMENTS

XVIII: Recognition and Enforcement of For-eign Judgments

A. Distinction between Recognition and Enforcement

‘Foreign judgments’- all decisions rendered outside the forum and encompasses judg-ments, decrees & orders of courts of for-eign countries as well as of sister states in a federal system of gov’t.

Conceptual & Procedural Differences be-tween Recognition & Enforcement:Rules on recognition & enforcement are analogous but there are differences in con-ceptual & procedural aspects. ENFORCEMENT: This happens when a suc-cessful plaintiff fails to enforce judgment in the forum court so he seeks to carry out the execution of the judgment in another state.

This requires the filing of an action and a new judgment before the properties of the defendant can be attached.

RECOGNITION: This may arise when a suc-cessful defendant wins and asserts that de-cision to preclude the plaintiff from filing a suit on the same claim in another forum. It is basically a passive act because it does not require the filing of an action in another forum. EX. Decree of divorce.

B. Bases of Recognition and Enforce-ment of Foreign Judgments

1) Comity

According to Cheshire, the theory on comity mean that in order to maintain re-ciprocal treatment from the courts of other countries, we are compelled to take foreign judgments as they stand & to give them Full faith & Credit.

Comity calls for reciprocity between the concerned jurisdictions. Thus, forum A will withhold recognition & enforcement of prior judgment if it comes from Forum B, w/c does not give same concession to fo-rum A judgment.

2) “Obligation of foreign judgments”

This doctrine of obligation is derived from the rigid & unyielding vested rights theory. Judgment of a foreign court of competent jurisdiction is considered as imposing a duty or obligation on the losing litigant. i.e.:

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Notes!


Forum 1- adjudicates debt owing to plaintiff

Forum 2- treats F1 judgment as ev-idence of debt w/c may be enforced in F2 by an action of debt

Goddard vs. Godard(1870)

FACTS: Godard (French) obtained a fa-vorable ruling by a French court arising on a charter party obligation against Gray (English). The French court inter-preted the clause “penalty for non-per-formance of this agreement, estimated amount of freight” as a clause that sets the limits to liability to one voyage be-tween the parties to the charter party contrary to the English interpretation. When this French judgment was sought to be enforced in England, Gray inter-posed in defense that the erroneous French judgement is a bar to the action for enforcement in England.

HELD: it is not a bar. In England, foreign judgement are enforced based on the principle that where a court of compe-tent jurisdiction has adjudicated a sum of money to be due from one person to an-other, a legal obligation arises to pay the sum, on which an action of debt to en-force the judgement may be maintained and not merely out of politeness and courtesy to other tribunals of other coun-tries. Anything that negates the exis-tence of a legal obligation or excuses the defendant from performance is a good defense to the action (ex. Evidence that court exceeded its jurisdiction or the judgement was obtained thru fraud)

C. Policies Underlying Recognition and Enforcement

1. Res judicata

Many courts recognize & enforce foreign judgments on ground of res judicata, under which principle:

a. those who contested an issue shall be bound by the result &

b. matters once tried & decided w/ finality in one jurisdiction shall be considered as settled b/w the parties

Thus, parties are prevented from litigating issues already determined by a local judg-ment.

In Anglo-American jurisprudence, foreign judgments are not open to reexamination on merits when placed in issue before local courts subject to a few exceptions.

The principle seeks to accomplish the pol-icy of giving finality to litigation. Public pol-icy dictates diminishing the judicial energy invested in deciding suits, encouraging confidence in court decrees and securing the legitimate expectations of successful plaintiff or defendant that he will no longer be harassed into protecting his interests.

Rule 39 Sec 40:A foreign judgment of a tribunal of a for-eign country, having jurisdiction to pro-nounce judgment renders it conclusive upon the title to the thing while a judgment against a person is presumptive evidence of a right as between the parties & their successors in interest

2. Merger

It considers the plaintiff’s cause of action as merged in the judgment. Thus, he may not relitigate that exact same claim.

3. Bar

This is where a successful defendant inter-poses the judgment in his favor to avert a second action by plaintiff on the same claim. By direct estoppel, the relitigation of all matters decided are precluded

In addition, DOCTRINE OF COLLATERAL ESTOPPEL renders conclusive all “essential issues of fact actually litigated in the suit decided on by the foreign court”.

Distinction between Res Judicata & Collat-eral Estoppel

RES JUDICATA- seeks to end litigation by disallowing suit on the same claim

COLLATERAL ESTOPPEL- concerned with preclusion by barring relitigation of an is-sue already litigated on in a prior proceed-ing

D. Requisites for Recognition or En-forcement

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1) The foreign judgment was ren-dered by a judicial or a quasi-judi-cial tribunal which had jurisdiction over the parties & the case in the proper judicial proceeding.

2) The judgment must be valid un-der the laws of the court that ren-dered it

3) The judgment must be final & ex-ecutory to constitute res judicata in another action

4) The state where the foreign judg-ment was obtained allows recog-nition or enforcement of Philip-pine judgment

5) The judgment must be for a fixed sum of money

6) The foreign judgment must not be contrary to the public policy or the good morals of the country where it is to be enforced

7) The judgment must not have been obtained by fraud, collusion, mistake of fact or mistake

1. The foreign judgment was rendered by a judicial or a quasi-judicial tribunal having jurisdiction over the parties & the case in the proper case

A court validly asserts jurisdiction over ac-tions in personam based on consent of par-ties or relation of the parties or events to the forum, thus satisfying minimum stan-dards of fair play & substantial justice.

In in rem proceeding, jurisdiction is based on the power of the state over the property found within the territory

Northwest Orient Airlines vs. CA and C.F. Sharp

(1995)FACTS: Under contract of agency, NOA authorized Sharp to sell airline tickets. Sharp failed to remit the proceeds of the ticket sales to NOA. The court in Tokyo failed to serve the writ of summons against the Sharp branches in Tokyo. NOA had these writs served in the Manila main office of Sharp. Despite the notice, Sharp did not appear at the hearing. NOA obtained a judgment in its favor.

NOA sought enforce the judgment in the Philippines. Sharp opposed claiming that the service of process was void so the Tokyo Court did not acquire jurisdiction over it.

HELD: Service of summons by Tokyo court was valid. A foreign judgment is presumed to be valid and binding in the country where it comes, until the con-trary is shown. The regularity of the pro-ceedings and the giving of due notice is also presumed. The party attacking has the burden of overcoming this presump-tion. In CAB, SHARP alleged that the ex-traterritorial service of summons is void. However, Sharp failed to prove the appli-cable Japanese procedural law to base its claim since in matters of procedure, lex fori applies. Also, Sec. 14 of ROC applies, it allows service to be made to:

a. resident agent desig-nated (if it has one, the designation is exclusive)

b. if none, on the govern-ment official designated by law ( Insurance Com-missioner – foreign insur-ance co.; Superintendent of Banks – foreign bank-ing corps. & SEC – other foreign corps licensed to do business in Phils) The government official shall transmit the summons by mail to the principal office.

c. any of its officers/agents within the Phils.

Sharp did not designate an agent so ser-vice on govt official or any of its officers in Japan is allowed. The Court finds that the service made by Tokyo court suffi-cient to fall under service to the proper govt official.

(Tokyo DC- SC Japan – Ministry of Foreign Affairs of Japan – Japanese Embassy – DFA, Phils – RTC – sheriff delivered sum-mons to principal office)

Boudard vs. Tait(1939)

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FACTS: Boudard’s husband, employee of Tait, was killed by co-employees. Boudard obtained a favorable judgment against Tait who was declared to be in default in CFI of Hanoi. She filed action for execution of Hanoi judgment in CFI Manila. Court dismissed for lack of juris-diction of Hanoi court over Tait who was not a resident of French Indo-China.

HELD: Hanoi court has no jurisdiction over Tait. Jurisdiction in personam, over non-residents, in money suits, must be based upon personal service within the state that renders the judgment. At the time of the complaint, Tait was not in Hanoi nor were his agents or representa-tives. Also, the French law on service of summons was not applied. Instead of serving a copy to the Atty Gen of the Re-public who shall visae the original, the summons were served in Manila to J.M. Shotwell, a representative of Churchill & Tait Inc, which is an entity entirely differ-ent from Tait.

Ramirez vs. Gmur(1918)

FACTS: The will of Bischoff contained a statement to the effect that he had no living forced heirs. Leona Castro, Bischoff’s recognized natural daughter, had 2 sets of children from 2 marriages, who claim to be heirs of Bischoff. ο first married to Von Kaufmann and

had 3 children but Von Kaufmann obtained divorce on France

ο Castro was remarried to Dr. Mory and they had 2 children

HELD: as to the Mory children – NO, the second marriage is void. The right to in-herit pertains only to legitimate, legiti-mated and acknowledged natural chil-dren. The French decree of divorce is not valid in the Philippines. French court had no jurisdiction to entertain actions for dissolution of marriages of performed in the Phils over persons domiciled here. The RULE is that when a court, where neither of the spouses are domiciled, and to which one or both, may resort merely to obtain decree of divorce, is-sues such decree, the divorce is not enti-tled to recognition elsewhere.

As long as the foreign court acquired juris-diction, its decisions will not be disturbed whether it was reached through an adver-sary proceeding or by default.

Somportex vs. Philadelphia Chewing Gum Corp.. Court rejected Philadelphia’s con-tention that a default judgment by the Eng-lish courts should not be extended hospital-ity by American courts.

“In the absence of fraud or collusion, a de-fault judgment is as conclusive as adjudica-tion between the parties as when rendered after answer & complete contest in open court. The polestar is whether a reasonable method for notification is employed & rea-sonable opportunity to be heard is given to the person concerned.”

Borthwick vs. Castro(1987)

FACTS: Borthwick (US) owned real prop-erties in Hawaii. He issued promissory notes to Scallon but failed to pay the same. Scallon sued him in Hawaii. B was issued summons while in California which process was valid under Hawaiian law. For failure to enforce the judge-ment, S filed action in Phils. B’s defense is that the Hawaii court has no jurisdic-tion over the cause of action and over his person.

HELD: Foreign judgements are presump-tive evidence of the rights between par-ties and rejection may be justified, among others, by want of jurisdiction of the issuing authority, among others. But in CAB, such rejection was not justified. What Borthwick seeks in this appeal is a 3rd chance to contest the jurisdiction of the foreign court. In order to do that, he must show that the declaration of default was incorrect. But Borthwick did not do this. Borthwick was given an opportunity to file his answer in the Hawaii court, he was also given a chance in the CFI, Makati, but he failed to do the same.

2. The judgment must be valid under the laws of the court that rendered it

In Pemberto vs. Hughes although there was error in procedure, since the Florida court was competent & no substantial in-

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justice was committed, the English court did not consider the error as to significantly alter an otherwise valid decree.

3. The judgment must be final & executory to constitute res judicata in another action

If judgment is interlocutory or provisional in character w/c ‘contemplates that a fuller investigation leading to final decision may later be held, it creates no obligation on the forum court to recognize it.

Nouvion vs. Freeman(1889)

FACTS: Nouvion filed an action for ad-ministration of the estate of Henderson. In order to show that he was Hender-son’s creditor, Nouvion alleged that he obtained a foreign judgment establishing Henderson’s indebtedness to him.

HELD: The Spanish judgment cannot be sustained because it was not yet final and conclusive. Where a court of compe-tent jurisdiction has adjudicated a cer-tain sum as due from one to another, a legal obligation arises, on which an ac-tion of debt to enforce judgment may be maintained. But to come within the terms of law properly laid down, judg-ment must result from an adjudication of a court of competent jurisdiction, such judgement being final and conclusive. It is not sufficient that the judgement puts an end to and finally settles controversy. It must e shown that in the court by which it was pronounced it conclusively and finally settles forever the existence of debt of which it is sought to be made conclusive.

Querubin vs. Querubin(1950)

FACTS: Following their divorce because of Margaret’s infidelity, rendered in New Mexico, their daughter Querubina was kept in a neutral home. Silvestre then obtained an interlocutory decree grant-ing him custody. Margaret had the de-cree modified since the she was remar-ried and had a stable home for Queru-bina. When Silvestre fled to the Philip-pines with Querubina, Margaret filed for habeas corpus. She asserts that the in-terlocutory order should be complied with pursuant to Article 48 Rule 39.

HELD: Her contention is erroneous. A for-eign interlocutory order in favor of Mar-garet did not establish a vested right with respect to rightful custody over Queribina. The decree is not yet final but subject to change with the circum-stances. Generally, divorce decree awarding custody of child to one spouse is respected by other states but such de-cree has no effect in another state as to facts and conditions occurring subse-quently to date of decree. Court of an-other state may award custody other-wise upon proof of subsequent matters justifying such decree to the child’s inter-est.

4. The state where the foreign judgment was obtained allows recognition or enforce-ment of Philippine judgment

In Hilton vs. Guyot, a French judgment was not recognized by a US court because it found out that French laws allowed review of American judgments on the merits. This ruling is widely criticized because:

ο Instead of being a mutual exchange of privileges, comity was used as a means of retaliation.

ο The court in Hilton discriminated against the litigants on account of the policies of their governments which they were in no position to shape and alter.

ο It can be argued that the task of for-mulating policies through reciprocity is a power misplaced in the judiciary and should be appropriately wielded by the other branches of government.

Trautman and Von Mehren point out the difficulties with the reciprocity require-ment.

a. its normal tendency is to lower rather than raise the standards of practice

b. the private litigants bur-dened may not be closely attached to the legal or-der sought to be changed

c. the administration of reci-procity clauses can be complicated esp. where case law systems are af-fected since finding the exact foreign law that grants reciprocity is still

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nebulous. It is unclear whether reciprocity is proved by general recog-nition of such or requires a specific recognition for a case identical or analo-gous to the one before the court.

Cowans, et al. vs. Teconderoga Pulp and Paper Co.

(1927)FACTS: Cowans obtained a Quebec judg-ment in their favor for a sum of money. TPP asserts in defense that this judg-ment is not conclusive upon, but merely a prima facie evidence before the US courts, pursuant to Quebec law. TPP al-leges that since Quebec law does not re-ciprocate as to judgements of NY courts, NY should also not recognize the Quebec judgment as adjudications of the issues.

HELD: This claim of TPP pursuant to the Hilton vs. Guyot doctrine should not be followed. Persuasiveness of a foreign judgment is not dependent upon comity nor reciprocity. Even without these prin-ciples, a judgment has its own strength. Following the Hilton vs. Guyot ruling would deprive a party of the private rights he has acquired by reason of a for-eign judgement because the country in whose courts the judgement was ren-dered has a different rule of evidence than what the recognizing court has and does not give the same effect as the lat-ter gives to a foreign judgment.

5. The judgment must be for a fixed sum of money

Unless the foreign judgment specifies per-formance or delivery, there is nothing for the forum court to enforce. In Sadler vs. Roberis, the English court held that until taxation, the plaintiff could not enforce his claim because the Jamaican court decided that from the sum due him should first be subtracted the costs incurred by the defen-dant which was to be taxed. Hence, the amount decreed was not fixed.

6. The foreign judgment must not be con-trary to the public policy or the good morals of the country where it is to be en-forced

Querubin vs. Querubin(1950)

HELD: It goes against the law, public pol-icy, and good customs that a mother who violated her marital vows should have custody (referring to the fact that Margaret was having an illicit affair with another man).

7. The judgment must not have been ob-tained by fraud, collusion, mistake of fact or mistake of law

Whether or not there is fraud is decided by the court where enforcement of judgment is sought on the basis of its own internal law. A problem may arise when the internal law is not in agreement with the notions of equity of the foreign state.

Rule 39, Sec. 50Effect of Foreign Judgment. The effect of a judgment of a court of a foreign country, having jurisdiction to pronounce the judg-ment is as follows:

a. in case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing

b. in case of judgment upon a per-son, the judgment is a presump-tive evidence of a right as be-tween the parties and their suc-cessors in interest by a subse-quent title; but the judgment may be repelled by evidence of want of jurisdiction, want of no-tice to the party, collusion, fraud, or clear mistake of law or fact.

This rule does not refer to intrinsic fraud which goes to the merits of the case. To impeach a foreign judgment, fraud must be “extrinsic, collateral act which vitiates the most solemn proceedings of the courts of justice” such as collusion by the parties, suppression of an important document or the presentation in evidence of a forged will or falsified affidavit. Extrinsic fraud sig-nifies that a party is deprived of his day in court.

Philippine Aluminum vs. FASGI(1950)

FACTS: FASGI (US) entered into a distrib-utorship agreement with PAWI (Phil). PAWI shipped defective goods to FASGI. FASGI sued PAWI for breach of contract

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in US court. They entered into a settle-ment but PAWI still failed to pay. US court issued a certificate of final judg-ment upon application by FASGI of entry of judgment. FASGI was not able to sat-isfy the claim in US so it filed a complaint for enforcement in RTC. RTC dismissed but CA reversed.

HELD: California court judgment may be enforced. A judgment for a sum of money ordered in a foreign court is pre-sumptive evidence of a right between the parties and their successors-in-inter-est, but when suit for enforcement is filed in Phil court, the judgment may be repelled by evidence of want of jurisdic-tion, want of notice, fraud, collusion or a clear mistake of law or fact.In CAB, PAWI failed to prove that there was collusion between its counsel, Mr. Ready, and FASGI in entering into the settlement and in agreeing to an entry of judgment against PAWI. PAWI should have raised the issue before the forum court in line with the principle of comity of nations that a court should refrain from assuming the power to pass upon the correctness of the application of laws and evaluation of facts of judgments is-sued by foreign courts.

Puyat vs. Zabarte(2001)

FACTS: Z filed an action to enforce money judgment rendered by the Supe-rior Court of California against P. RTC by summary judgment ordered Puyat to pay Z pursuant to Judgment of Stipulation for Entry of Judgment contained in the Com-promise Agreement between them in the Calif. court. CA held that P is estopped from assailing the judgment that had be-come final.

HELD: The summary judgment is al-lowed. Since the present action lodged in the RTC was for the enforcement of a foreign judgment, there was no need to ascertain the rights and obligations of the parties based on foreign laws or con-tracts; the parties needed only to per-form their obligations under the Compro-mise Agreement they had entered into. None of the reasons for invoking forum non conveniens barred the RTC from ex-ercising its jurisdiction (forum shopping,

overcrowded dockets, harassment of de-fendants, etc.) In CAB, there was no more need for material witnesses, no fo-rum shopping or harassment of Puyat, no inadequacy in the local machinery to en-force the foreign judgment and no ques-tion raised as to the application of any foreign law.

E. Grounds for Non-Recognition

Uniform Money-Judgment Recognition Act of the US, Section 4:

(a) A foreign judgment is not conclu-sive if-

1. The judgment was rendered under a system which does not provide impar-tial tribunals or procedures compatible with the requirements of due process of law2. The foreign court did not have per-

sonal jurisdiction over the defendant3. The foreign court did not have juris-diction over the subject matter

(b) A foreign judgment need not be

recognized if-1) The defendant in the proceedings

in foreign court did not receive notice of the proceedings in suffi-cient time to enable him to de-fend

2) The judgment was obtained by fraud

3) The cause of action or claim for re-lief on which judgment is based is repugnant to public pol-icy of the state.

4) The foreign judgment conflicts with another final & conclusive judgment.

5) The proceeding in the foreign country was contrary to an agree-ment between the parties under which the dispute in question set-tled otherwise than the proceed-ing in that court

6) In the case of jurisdiction based only on personal service, the for-eign court was a seriously incon-venient forum for the trial of the action

Grounds 1-3 under letter b are mandatory & the last 3 are discretionary. The ground on non-recognition for lack of jurisdiction in personam is most debatable. Most courts consider jurisdiction of foreign court as appropriate when there are signifi-

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cant contacts between forum states & indi-viduals.

The service of summons as the traditional basis for exercise of jurisdiction has been eroded.

The ground that “foreign court was seri-ously inconvenient” employs doctrine of fo-rum non conveniens to restrain use of “presence” as cornerstone of jurisdiction.

Art 23 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement & Cooperation in re of Parental Responsibil-ity & Measures for Protection of Children:

Considering the best interests of child, recognition of measures directed for pro-tection of the child or his property may be refused if such were taken without giving the child opportunity to be heard or if con-trary to public policy.

Violation of ordre public & nonobservance of due process are included as grounds for non-recognition in many Hague Conven-tions.

F. Modern Developments in Enforce-ment of Foreign Judgment

1. The Hague Conference on Private IL Convention on Recognition & Enforcement of Foreign Judgments in Civil & Commercial Matters established conditions & requisites for contracting states to recognize & en-force each other’s judgment. Contributions:

a) provisions on applicability of Con-vention irrespective of nationality

b) non-refusal for sole reason that court of state of origin has applied a law other than that which would have been applicable according to the rules of Private IL of the state addressed

c) it addresses the question of whether a default judgment is subject to enforcement

d) establishes recognition & enforce-ment procedures

The seventh session looked into possibility of a general convention on recognition & enforcement of judgments whose chief benefit will be the relatively uniform proce-dure among contracting states.

2. The EEC Convention of 1968

Six countries comprising the European Eco-nomic Community are signatories to Con-vention on Jurisdiction of Courts & Enforce-ment of Decisions…

The Convention extends to Common Mar-ket area the reach of jurisdictionally im-proper for a now available against non-resi-dents under procedural systems of 4 mem-ber states.

3. The Uniform Money-Judgments Recogni-tion Act

This seeks to inspire more confidence in stability of American law & bring together into one statute all common law rules of recognition from jurisprudence.

What does the act cover?

It is applicable to any foreign country judg-ment that is final & conclusive & enforce-able when rendered even though an appeal is pending or it is subject to appeal.

G. Procedure for Enforcement

The Philippines has adopted the common law practice of not instantaneously execut-ing foreign judgment.

MODES OF ENFORCEMENT

A. First Mode: Need for New Judicial Action

Procedure in Philippines(Compared to simple procedure of exe-quaure, Philippine mode is protracted & ex-pensive).

Our laws require that a petition should be filed in proper court attaching authenti-cated copy of foreign judgment to be en-forced.

Philippine consul must certify that it had been rendered by a court of competent ju-risdiction. The petition must comply w/ all the requisites of an enforceable judgment.

Requirement to file an action anew

Attempt to reconcile the principle of territo-rial jurisdiction of courts w/c demands that the enforcement of a judgment outside the territory of rendering court must be placed upon some other basis than the authority

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of the rendering court w/c ceased at its ju-risdictional limits- & the principle of res ju-dicata.

Ingenohl vs. Olsen and Co.FACTS: Ingenohl obtained a HK judgment declaring it to be the owner of the trade-mark against Olsen. Ingenohl then recov-ered the sums awarded by the HK judg-ment in an action for collection in Manila. Olsen appealed. The appeal was granted because the trial court erred in not tak-ing into account the fact that Olsen had bought the Ingenohl trademark in a sale of the same conducted by the Alien Prop-erty Custodian. Hence this petition by In-genohl.

HELD: There is no error on the part of the HK court. In authoritatively passing upon the issue of not giving effect to the sale by the Alien Property Custodian, it cannot be said that the HK tribunal com-mitted a wrong decision. The judgment is unquestionably valid and is binding be-tween the parties. When the judge who is the final exponent of that law, authori-tatively declares that the assignment by the Custodian of the assets of the Manila firm cannot and will not be allowed to affect the rights of the party concerned in Hong Kong, the court ruled that it is not possible for a foreign court to pro-nounce his decision wrong.

Procedure in other civil law countries

B. Second Mode: Exequatur - -Summary proceeding also known as ‘exequatur’ pro-cedure. Authenticated copy of foreign judgment need only be accompanied by a certifica-tion from Clerk of Court. Once validated the foreign judgment has same effect as local judgment. Example: French formule execu-toire, used in France, Italy, Austria

C. Third Mode: Judgment Registration

It may or may not involve judicial supervi-sion. Authenticated copy of foreign judg-ment filed w/ registrar’s office w/ other proofs required by domestic laws & foreign judgment is converted into a local one that is immediately executory.

It is used in Australia, England.

Distinctions between a foreign country & a sister-state judgment in United States

These differences are premised on possible absence of principles underlying res judi-cata practices within foreign country.

Von Mehren & Trautman: There are signifi-cant differences between the 2 to justify refusal of a foreign country judgment even though it could be recognized if rendered by a sister state:

1) US Constitution clause of full faith and credit. This substitutes a fed-eral policy in place of individual state policies, thus demanding that sister-state judgments be given more than minimal preclu-sive effects.

2) Judgments of sister-state may be brought to US Supreme Court for review

3) Judgments rendered by sister states are based on legal proce-dures & standards similar to those whose recognition is sought.

On the other hand, a foreign country judg-ment may have been decided under rules that disregard private rights & duties or fundamental policies that the recognizing court deem important.

In practice, courts are inclined to give recognition because of 1) overriding public interest 2) dictates of public policy that there be an end to litigation.

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Conflicts

Documents

Transcript of Conflicts