Conflict of Laws - Doctrines and Concepts

Conflict of Laws Atty.
Ricardo Jun Pilares - RC

Conflict of Laws
Week One
I. Definition: Conflict of Laws; Private International Law
II. Purpose; Theories
III. Conflict of Laws v. Public International Law
IV. Elements
a. Part of Municipal Law
b. Directive to Courts/Administrative Agencies
c. Foreign Element
d. Application or Non-Application of Foreign Law
V. Foreign Element
(This case involves a Filipina national working in Saudi Arabia, who was charged by her
employer with some misconduct involving an attempted rape in Indonesia. The employer was
able to secure a conviction in Saudi by making her sign documents without informing her as to
their contents. She then filed a complaint against her employer in the Philippines.) A factual
situation that cuts across territorial lines and is affected by the diverse laws of two or more
states is said to contain a "foreign element". The presence of a foreign element is inevitable
since social and economic affairs of individuals and associations are rarely confined to the
geographic limits of their birth or conception. The forms in which this foreign element may
appear are many. The foreign element may simply consist in the fact that one of the parties to
a contract is an alien or has a foreign domicile, or that a contract between nationals of one
State involves properties situated in another State. In other cases, the foreign element may
assume a complex form; (Saudi Arabian Airlines v. CA)
o In the instant case, the foreign element consisted in the fact that private respondent Morada is a resident
Philippine national, and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the
employment of Morada with the petitioner Saudia as a flight stewardess, events did transpire during her
many occasions of travel across national borders, particularly from Manila, Philippines to Jeddah, Saudi
Arabia, and vice versa, that caused a "conflicts" situation to arise;
o We thus find private respondent's assertion that the case is purely domestic, imprecise. A conflicts
problem presents itself here, and the question of jurisdiction confronts the court a quo. After a careful
study of the private respondent's Amended Complaint, and the Comment thereon, we note that she aptly
predicated her cause of action on Articles 19 and 21 of the New Civil Code;
Based on the allegations 46 in the Amended Complaint, read in the light of the Rules of Court on
jurisdiction 47 we find that the Regional Trial Court (RTC) of Quezon City possesses jurisdiction
over the subject matter of the suit. Its authority to try and hear the case is provided for under
Section 1 of Republic Act No. 7691, to wit xxx;
o Pragmatic considerations, including the convenience of the parties, also weigh heavily in favor of the RTC
Quezon City assuming jurisdiction. Paramount is the private interest of the litigant. Enforceability of a
judgment if one is obtained is quite obvious. Relative advantages and obstacles to a fair trial are equally
important. Plaintiff may not, by choice of an inconvenient forum, "vex", "harass", or "oppress" the
defendant, e.g. by inflicting upon him needless expense or disturbance. But unless the balance is strongly
in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed;
Conflict of Laws Atty. Ricardo Jun Pilares - RC
Weighing the relative claims of the parties, the court a quo found it best to hear the case in the
Philippines. Had it refused to take cognizance of the case, it would be forcing plaintiff (private
respondent now) to seek remedial action elsewhere, i.e. in the Kingdom of Saudi Arabia where
she no longer maintains substantial connections. That would have caused a fundamental
unfairness to her;
Moreover, by hearing the case in the Philippines no unnecessary difficulties and inconvenience
have been shown by either of the parties. The choice of forum of the plaintiff (now private
respondent) should be upheld;
o Choice of Law/Doctrine of Qualification shall be discussed later.
(This case involves a petition for prohibition to enjoin the sale of the Roppongi properties
owned by the Republic, but situated in Japan.) belonging to the State and intended for some
public service.Has the intention of the government regarding the use of the property been
changed because the lot has been Idle for some years? Has it become patrimonial? The fact
that the Roppongi site has not been used for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use. A property continues to be part of the public domain, not
available for private appropriation or ownership until there is a formal declaration on the part of
the government to withdraw it from being such. The respondents try to get around the
public dominion character of the Roppongi property by insisting that Japanese law and
not our Civil Code should apply; (Laurel v. Garcia)
o It is exceedingly strange why our top government officials, of all people, should be the ones to insist that in
the sale of extremely valuable government property, Japanese law and not Philippine law should prevail.
The Japanese law - its coverage and effects, when enacted, and exceptions to its provision is not
presented to the Court It is simply asserted that the lex loci rei sitae or Japanese law should apply without
stating what that law provides. It is on faith that Japanese law would allow the sale;
We see no reason why a conflict of law rule should apply when no conflict of law situation exists.
A conflict of law situation arises only when: (1) There is a dispute over the title or ownership
of an immovable, such that the capacity to take and transfer immovables, the formalities of
conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a
conveyance, are to be determined; and (2) A foreign law on land ownership and its conveyance is
asserted to conflict with a domestic law on the same matters. Hence, the need to determine which
law should apply;
o The issues are not concerned with validity of ownership or title. There is no question that the property
belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of
property belonging to the State. And the validity of the procedures adopted to effect its sale. This is
governed by Philippine Law. The rule of lex situs does not apply;
o Having declared a need for a law or formal declaration to withdraw the Roppongi property from public
domain to make it alienable and a need for legislative authority to allow the sale of the property, we see
no compelling reason to tackle the constitutional issues raised by petitioner Ojeda.
VI. Resolution of Conflicts Problems; General Framework

a. Phases Involved in Resolving Conflicts Problems
(This case involves a contractor agreement between a Japanese firm and a Japanese resident
of the Philippines regarding the STAR Tollway.) To elucidate, in the judicial resolution of
conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these phases are the following
questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply?
and (3) Where can the resulting judgment be enforced?; (Kazuhiro Hasegawa & Nippon
Engineering v. Kitamura)
o Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair
to cause a defendant to travel to this state; choice of law asks the further question whether the application
of a substantive law which will determine the merits of the case is fair to both parties. The power to
exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always
provide the necessary significant contacts for the other. The question of whether the law of a state can
be applied to a transaction is different from the question of whether the courts of that state have
jurisdiction to enter a judgment;
o In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a
court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or
the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case
and, in cases involving property, over the res or the thing which is the subject of the litigation. In assailing
the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction;
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority
which establishes and organizes the court. It is given only by law and in the manner prescribed by
law. It is further determined by the allegations of the complaint irrespective of whether the plaintiff
is entitled to all or some of the claims asserted therein. To succeed in its motion for the dismissal
of an action for lack of jurisdiction over the subject matter of the claim, the movant must show that
the court or tribunal cannot act on the matter submitted to it because no law grants it the power to
adjudicate the claims;
o Lex loci celebrationis relates to the law of the place of the ceremony or the law of the place where a
contract is made. The doctrine of lex contractus or lex loci contractus means the law of the place where
a contract is executed or to be performed. It controls the nature, construction, and validity of the contract
and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either
expressly or implicitly. Under the state of the most significant relationship rule, to ascertain what state
law to apply to a dispute, the court should determine which state has the most substantial connection to
the occurrence and the parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of
incorporation of the parties. This rule takes into account several contacts and evaluates them according to
their relative importance with respect to the particular issue to be resolved;
Since these three principles in conflict of laws make reference to the law applicable to a dispute,
they are rules proper for the second phase, the choice of law. They determine which state's law is
to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as the only
issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not
yet called for;
o It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or
administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the
case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume
jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case
and take into account or apply the law of some other State or States. The courts power to hear cases and
controversies is derived from the Constitution and the laws. While it may choose to recognize laws of
foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal
agreements, even in matters regarding rights provided by foreign sovereigns;
o Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of its
jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the
Rules of Court does not include it as a ground. Second, whether a suit should be entertained or
dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. In this case, the RTC decided to assume jurisdiction.
Third, the propriety of dismissing a case based on this principle requires a factual determination; hence,
this conflicts principle is more properly considered a matter of defense. (This pronouncement runs counter
to the nature and defeats the purpose of forum non conveniens.)
b. Jurisdiction
i. Venue v. Jurisdiction
(This case involves an issue as to whether or not a complaint is properly filed in the place
indicated in previous contracts as the corporations principal residence, as opposed to that
contained in its Articles of Incorporation.) Venue and jurisdiction are entirely distinct matters.
Jurisdiction may not be conferred by consent or waiver upon a court which otherwise would
have no jurisdiction over the subject-matter of an action; but the venue of an action as fixed by
statute may be changed by the consent of the parties and an objection that the plaintiff brought
his suit in the wrong county may be waived by the failure of the defendant to make a timely
objection. In either case, the court may render a valid judgment. Rules as to jurisdiction can
never be left to the consent or agreement of the parties, whether or not a prohibition exists
against their alteration; (Davao Light & Power Co., Inc. v. CA)
o A corporation has no residence in the same sense in which this term is applied to a natural person. But
for practical purposes, a corporation is in a metaphysical sense a resident of the place where its principal
office is located as stated in the articles of incorporation. The Corporation Code precisely requires each
corporation to specify in its articles of incorporation the "place where the principal office of the corporation
is to be located which must be within the Philippines." The purpose of this requirement is to fix the
residence of a corporation in a definite place, instead of allowing it to be ambulatory;
o Private respondent is not a party to any of the contracts presented before us. He is a complete stranger to
the covenants executed between petitioner and NAPOCOR, despite his protestations that he is privy
thereto, on the rather flimsy ground that he is a member of the public for whose benefit the electric
generating equipment subject of the contracts were leased or acquired. We are likewise not persuaded by
his argument that the allegation or representation made by petitioner in either the complaints or answers it
filed in several civil cases that its residence is in Davao City should estop it from filing the damage suit
before the Cebu courts. Besides there is no showing that private respondent is a party in those civil cases
or that he relied on such representation by petitioner.
c. Choice of Law/Characterization
i. Doctrine of Qualification
(This case involves a Filipina national working in Saudi Arabia, who was charged by her employer
with some misconduct involving an attempted rape in Indonesia. The employer was able to secure
a conviction in Saudi by making her sign documents without informing her as to their contents.
She then filed a complaint against her employer in the Philippines.) As to the choice of applicable
law, we note that choice-of-law problems seek to answer two important questions: (1) What legal
system should control a given situation where some of the significant facts occurred in two or more
states; and (2) to what extent should the chosen legal system regulate the situation; (Saudi
Arabian Airlines v. CA)
o Before a choice can be made, it is necessary for us to determine under what category a certain set of
facts or rules fall. This process is known as "characterization", or the "doctrine of qualification". It is the
"process of deciding whether or not the facts relate to the kind of question specified in a conflicts rule."
The purpose of "characterization" is to enable the forum to select the proper law;
o Our starting point of analysis here is not a legal relation, but a factual situation, event, or operative fact.
An essential element of conflict rules is the indication of a "test" or "connecting factor" or "point of
contact". Choice-of-law rules invariably consist of a factual relationship (such as property right, contract
claim) and a connecting factor or point of contact, such as the situs of the res, the place of celebration,
the place of performance, or the place of wrongdoing;
o Note that one or more circumstances may be present to serve as the possible test for the determination of
the applicable law. These "test factors" or "points of contact" or "connecting factors" could be any of the
following:
1. The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;
2. the seat of a legal or juridical person, such as a corporation;
3. the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular,
the lex situs is decisive when real rights are involved;
4. the place where an act has been done, the locus actus, such as the place where a contract has
been made, a marriage celebrated, a will signed or a tort committed. The lex loci actus is
particularly important in contracts and torts;
5. the place where an act is intended to come into effect, e.g., the place of performance of
contractual duties, or the place where a power of attorney is to be exercised;
6. the intention of the contracting parties as to the law that should govern their agreement, the lex
loci intentionis;
7. the place where judicial or administrative proceedings are instituted or done. The lex fori the
law of the forum is particularly important because, as we have seen earlier, matters of
"procedure" not going to the substance of the claim involved are governed by it; and because the
lex fori applies whenever the content of the otherwise applicable foreign law is excluded from
application in a given case for the reason that it falls under one of the exceptions to the
applications of foreign law; and
8. the flag of a ship, which in many cases is decisive of practically all legal relationships of the ship
and of its master or owner as such. It also covers contractual relationships particularly contracts
of affreightment;
o Considering that the complaint in the court a quo is one involving torts, the "connecting factor" or "point of
contact" could be the place or places where the tortious conduct or lex loci actus occurred. And applying
the torts principle in a conflicts case, we find that the Philippines could be said as a situs of the tort (the
place where the alleged tortious conduct took place). This is because it is in the Philippines where
petitioner allegedly deceived private respondent, a Filipina residing and working here. According to her,
she had honestly believed that petitioner would, in the exercise of its rights and in the performance of its
duties, "act with justice, give her due and observe honesty and good faith." Instead, petitioner failed to
protect her, she claimed. That certain acts or parts of the injury allegedly occurred in another country is of
no moment. For in our view what is important here is the place where the over-all harm or the totality of
the alleged injury to the person, reputation, social standing and human rights of complainant, had lodged,
according to the plaintiff below (herein private respondent). All told, it is not without basis to identify the
Philippines as the situs of the alleged tort;
o In applying said principle to determine the State which has the most significant relationship, the
following contacts are to be taken into account and evaluated according to their relative importance with
respect to the particular issue: (a) the place where the injury occurred; (b) the place where the conduct
causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of
business of the parties, and (d) the place where the relationship, if any, between the parties is centered.
As already discussed, there is basis for the claim that over-all injury occurred and lodged in the
Philippines. There is likewise no question that private respondent is a resident Filipina national,
working with petitioner, a resident foreign corporation engaged here in the business of
international air carriage. Thus, the "relationship" between the parties was centered here,
although it should be stressed that this suit is not based on mere labor law violations. From the
record, the claim that the Philippines has the most significant contact with the matter in this
dispute, 63 raised by private respondent as plaintiff below against defendant (herein petitioner), in
our view, has been properly established.
ii. Considerations of Public Policy
(This case involves a million complaints for payments due to pre-terminated employment
contracts. The related issue on prescription centers upon the complaint of those workers
employed in Bahrain.) To the POEA Administrator, the prescriptive period was ten years,
applying Article 1144 of the Civil Code of the Philippines. NLRC believed otherwise, fixing the
prescriptive period at three years as provided in Article 291 of the Labor Code of the Philippines.
The claimants in G.R. No. 104776 and G.R. Nos. 104911-14, invoking different grounds, insisted
that NLRC erred in ruling that the prescriptive period applicable to the claims was three years,
instead of ten years, as found by the POEA Administrator. The Solicitor General expressed his
personal view that the prescriptive period was one year as prescribed by the Amiri Decree No. 23
of 1976 but he deferred to the ruling of NLRC that Article 291 of the Labor Code of the Philippines
was the operative law. First to be determined is whether it is the Bahrain law on
prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on
prescription that shall be the governing law; (Cadalin, et al. v. POEA)
o Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment
shall not be actionable after the lapse of one year from the date of the expiry of the contract;
o As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as
service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is based upon a foreign substantive law;
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be
viewed either as procedural or substantive, depending on the characterization given such a law;
o However, the characterization of a statute into a procedural or substantive law becomes irrelevant when
the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the
foreign statute of limitation as one of substance. A "borrowing statute" directs the state of the forum to
apply the foreign statute of limitations to the pending claims based on a foreign. While there are several
kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it
accrued, will not be enforced in the forum even though the local statute has not run against it. Section 48
of our Code of Civil Procedure is of this kind. Said Section provides: 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 Philippines Islands;
o In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as
it ordains the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976. The courts
of the forum will not enforce any foreign claim obnoxious to the forum's public policy. To enforce
the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to labor;
o The flow is as follows: As a General Rule, Foreign Procedural Law will not be applied in the Forum. The
Exception would be Prescription, when it is either (1) deemed to be substantive by the circumstances, or
(2) made substantive by a Borrowing Statute. Nevertheless, this exception (i.e. an Exception to the
Exception) cannot apply when it is obnoxious to public policy.
iii. Doctrine of Processual Presumption
(The principal issue here is whether a Japanese court can acquire jurisdiction over a Philippine
corporation doing business in Japan by serving summons through diplomatic channels on the
Philippine corporation at its principal office in Manila after prior attempts to serve summons in
Japan had failed.) It is settled that matters of remedy and procedure such as those relating to the
service of process upon a defendant are governed by the lex fori or the internal law of the forum.
In this case, it is the procedural law of Japan where the judgment was rendered that determines
the validity of the extraterritorial service of process on SHARP. As to what this law is a question of
fact, not of law. It may not be taken judicial notice of and must be pleaded and proved like any
other fact. Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by
an official publication or by a duly attested or authenticated copy thereof. It was then incumbent
upon SHARP to present evidence as to what that Japanese procedural law is and to show that
under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of
validity and regularity of the service of summons and the decision thereafter rendered by the
Japanese court must stand; (Northwest Orient Airlines, Inc., v. CA)
o Alternatively in the light of the absence of proof regarding Japanese law, the presumption of identity or
similarity or the so-called processual presumption may be invoked. Applying it, the Japanese law on the
matter is presumed to be similar with the Philippine law on service of summons on a private foreign
corporation doing business in the Philippines. Section 14, Rule 14 of the Rules of Court provides that if
the defendant is a foreign corporation doing business in the Philippines, service may be made: (1) on its
resident agent designated in accordance with law for that purpose, or, (2) if there is no such resident
agent, on the government official designated by law to that effect; or (3) on any of its officers or agents
within the Philippines;
o In as much as SHARP was admittedly doing business in Japan through its four duly registered branches
at the time the collection suit against it was filed, then in the light of the processual presumption, SHARP
may be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein
and may be deemed to have assented to the said courts' lawful methods of serving process. Accordingly,
the extraterritorial service of summons on it by the Japanese Court was valid not only under the
processual presumption but also because of the presumption of regularity of performance of official duty.
d. Enforcement of Judgment
(This case involves a breach of contract by a Ph corporation against an Indian corporation. The
chosen arbitrator rendered judgment favoring the Indian corporation. It was sought to be enforced
in an Indian Court, which issued notice and directed the Ph corporation to pay fees; the latter
merely asked how much the fees were, and never paid. The Indian corporation then filed a
complaint to enforce the judgment in a Philippine court.) We now go to the issue of whether or not
the judgment of the foreign court is enforceable in this jurisdiction in view of the private
respondent's allegation that it is bereft of any statement of facts and law upon which the award in
favor of the petitioner was based (Oil and Natural Gas Commission v. CA)
o As specified in the order of the Civil Judge of Dehra Dun, "Award Paper No. 3/B-1 shall be a part of the
decree". This is a categorical declaration that the foreign court adopted the findings of facts and law of the
arbitrator as contained in the latter's Award Paper. Award Paper No. 3/B-1, contains an exhaustive
discussion of the respective claims and defenses of the parties, and the arbitrator's evaluation of the
same. Inasmuch as the foregoing is deemed to have been incorporated into the foreign court's judgment
the appellate court was in error when it described the latter to be a "simplistic decision containing literally,
only the dispositive portion". The constitutional mandate that no decision shall be rendered by any court
without expressing therein dearly and distinctly the facts and the law on which it is based does not
preclude the validity of "memorandum decisions" which adopt by reference the findings of fact and
conclusions of law contained in the decisions of inferior tribunals;
o Furthermore, the recognition to be accorded a foreign judgment is not necessarily affected by the fact that
the procedure in the courts of the country in which such judgment was rendered differs from that of the
courts of the country in which the judgment is relied on. This Court has held that matters of remedy and
procedure are governed by the lex fori or the internal law of the forum. Thus, if under the procedural rules
of the Civil Court of Dehra Dun, India, a valid judgment may be rendered by adopting the arbitrator's
findings, then the same must be accorded respect. In the same vein, if the procedure in the foreign court
mandates that an Order of the Court becomes final and executory upon failure to pay the necessary
docket fees, then the courts in this jurisdiction cannot invalidate the order of the foreign court simply
because our rules provide otherwise;
o A foreign judgment is presumed to be valid and binding in the country from which it comes, until the
contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of due
notice therein;
Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a
tribunal of a foreign country having jurisdiction to pronounce the same is presumptive evidence of
a right as between the parties and their successors-in-interest by a subsequent title. The
judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court,
whether of the Philippines or elsewhere, enjoys the presumption that it was acting in the lawful
exercise of jurisdiction and has regularly performed its official duty;
o Consequently, the party attacking a foreign judgment, the private respondent herein, had the burden of
overcoming the presumption of its validity which it failed to do in the instant case;
o The private respondent claims that its right to due process had been blatantly violated, first by reason of
the fact that the foreign court never answered its queries as to the amount of docket fees to be paid then
refused to admit its objections for failure to pay the same;
In the instant case, the private respondent does not deny the fact that it was notified by the foreign
court to file its objections to the petition, and subsequently, to pay legal fees in order for its
objections to be given consideration. Instead of paying the legal fees, however, the private
respondent sent a communication to the foreign court inquiring about the correct amount of fees
to be paid. On the pretext that it was yet awaiting the foreign court's reply, almost a year passed
without the private respondent paying the legal fees. Thus, on February 2, 1990, the foreign court
rejected the objections of the private respondent and proceeded to adjudicate upon the
petitioner's claims. We cannot subscribe to the private respondent's claim that the foreign court
violated its right to due process when it failed to reply to its queries nor when the latter rejected its
objections for a clearly meritorious ground. The private respondent was afforded sufficient
opportunity to be heard. It was not incumbent upon the foreign court to reply to the private
respondent's written communication. On the contrary, a genuine concern for its cause should
have prompted the private respondent to ascertain with all due diligence the correct amount of
legal fees to be paid;
o The foreign judgment being valid, there is nothing else left to be done than to order its enforcement,
despite the fact that the petitioner merely prays for the remand of the case to the RTC for further
proceedings. As this Court has ruled on the validity and enforceability of the said foreign judgment in this
jurisdiction, further proceedings in the RTC for the reception of evidence to prove otherwise are no longer
necessary.
VII. Some Domestic Sources of Conflicts of Law Rules

a. Constitution (Arts. IV and V, Sec. 1)
b. Civil Code (Arts. 14, 15, 16, 17, 815, 816, 817, 818, 819, 829, 1039, 1319, and 1753)
c. Family Code of the Philippines( Arts. 10, 21, 26,35, 36, 37, 38, 80, 96, 184, and 187)
d. Revised Penal Code (Art. 2)
e. Corporation Code (Sec. 133)
f. Rules of Court (Rule 14; Rule 39, Sec. 48; Rule 131, Sec. 3(n); Rule 132, Sec. 25)
Week Two
I. Distinction Between Jurisdiction and Venue
II. Rules on Venue
a. Stipulations as to Venue (Rules of Court, Rule 4)
(This case involves an agreement stipulating that [a]ll suits arising out of this Agreement shall be
filed with / in the proper Courts of Quezon City.) Rule 4 of the Rules of Court sets forth the
principles generally governing the venue of actions, whether real or personal, or involving persons
who neither reside nor are found in the Philippines or otherwise. Agreements on venue are
explicitly allowed. "By written agreement of the parties the venue of an action may be changed or
transferred from one province to another." Parties may by stipulation waive the legal venue and
such waiver is valid and effective being merely a personal privilege, which is not contrary to public
policy or prejudicial to third persons. It is a general principle that a person may renounce any right
which the law gives unless such renunciation would be against public policy; (Unimasters
Conglomeration, Inc. v. CA)
o Written stipulations as to venue may be restrictive in the sense that the suit may be filed only in the place
agreed upon, or merely permissive in that the parties may file their suit not only in the place agreed upon
but also in the places fixed by law (Rule 4, specifically). As in any other agreement, what is essential is
the ascertainment of the intention of the parties respecting the matter. Since convenience is the raison
d'etre of the rules of venue, it is easy to accept the proposition that normally, venue stipulations should be
deemed permissive merely, and that interpretation should be adopted which most serves the parties'
convenience. In other words, stipulations designating venues other than those assigned by Rule 4 should
be interpreted as designed to make it more convenient for the parties to institute actions arising from or in
relation to their agreements; that is to say, as simply adding to or expanding the venues indicated in said
Rule 4;
o On the other hand, because restrictive stipulations are in derogation of this general policy, the language of
the parties must be so clear and categorical as to leave no doubt of their intention to limit the place or
places, or to fix places other than those indicated in Rule 4, for their actions. This is easier said than
done, however, as an examination of precedents involving venue covenants will immediately disclose;
o Permissive Stipulations: "The parties agree to sue and be sued in the Courts of Manila; "(A)ll legal
actions arising out of this contract may be brought in and submitted to the jurisdiction of the proper courts
in the City of Manila; (A)ll actions arising out, or relating to this contract may be instituted in the Court of
First Instance of the City of Naga;" "The parties stipulate that the venue of the actions referred to in
Section 12.01 shall be in the City of Manila;" "(A)ny action involving the enforcement of this contract shall
be brought within the City of Manila, Philippines;" "I/We hereby expressly submit to the jurisdiction of the
courts of Valenzuela any legal action which may arise out of this promissory note."
(This case involves an action instituted in Misamis, where the contract provided that [i]t is hereby
agreed and understood that any and all actions arising out of the conditions and provisions of this
ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu.)
It should be borne in mind, however, that with respect to the fourteen (14) conditions one of
which is "Condition No. 14" which is in issue in this case printed at the back of the passage
tickets, these are commonly known as "contracts of adhesion," the validity and/or enforceability of
which will have to be determined by the peculiar circumstances obtaining in each case and the
nature of the conditions or terms sought to be enforced. For, "(W)hile generally, stipulations in a
contract come about after deliberate drafting by the parties thereto, ... there are certain contracts
almost all the provisions of which have been drafted only by one party, usually a corporation. Such
contracts are called contracts of adhesion, because the only participation of the party is the
signing of his signature or his 'adhesion' thereto. Insurance contracts, bills of lading, contracts of
make of lots on the installment plan fall into this category;" (Sweet lines, Inc. v. Teves)
o By the peculiar circumstances under which contracts of adhesion are entered into namely, that it is
drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the other
party, in this instance the passengers, private respondents, who cannot change the same and who are
thus made to adhere thereto on the "take it or leave it" basis certain guidelines in the determination of
their validity and/or enforceability have been formulated in order to that justice and fan play characterize
the relationship of the contracting parties;
o Considered in the light Of the foregoing norms and in the context Of circumstances Prevailing in the inter-
island ship. ping industry in the country today, We find and hold that Condition No. 14 printed at the back
of the passage tickets should be held as void and unenforceable for the following reasons first, under
circumstances obligation in the inter-island ship. ping industry, it is not just and fair to bind passengers to
the terms of the conditions printed at the back of the passage tickets, on which Condition No. 14 is Printed
in fine letters, and second, Condition No. 14 subverts the public policy on transfer of venue of proceedings
of this nature, since the same will prejudice rights and interests of innumerable passengers in different s
of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of
Cebu;
o Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may
be changed or transferred from one province to another by agreement of the parties in writing t to Rule 4,
Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the
action of the claimants, such as the private respondents herein. The philosophy underlying the provisions
on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote
the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City would
incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all.
The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has
branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these
places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not
cause inconvenience to, much less prejudice, petitioner;
o Sir does not agree with the ratio of this case, as it no longer holds true today. An airline company whose
plane crashed, for instance, cannot be expected to defend suits at 300 different venues; it stands to be
unduly prejudiced.
b. Special Rules on Libel Suits (R.A. 4393)
(The case involves a libel suit by DOF Undersecretary JPE and Manila Mayor Villegas against
Time Magazine in the CFI of Rizal.) The issues in this case are: 1. Whether or not, under the
provisions of Republic Act No. 4363 the respondent Court of First Instance of Rizal has jurisdiction
to take cognizance of the civil suit for damages arising from an allegedly libelous publication,
considering that the action was instituted by public officers whose offices were in the City of Manila
at the time of the publication; if it has no jurisdiction, whether or not its erroneous assumption of
jurisdiction may be challenged by a foreign corporation by writ of certiorari or prohibition; and 2.
Whether or not Republic Act 4363 is applicable to action against a foreign corporation or non-
resident defendant.
o R.A. 4363 provides: Section 1. Article three hundred sixty of the Revised Penal Code, as amended by
Republic Act Numbered Twelve hundred and eighty-nine, is further amended to read as follows: xxx The
criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall
be filed simultaneously or separately with the court of first instance of the province or city where the
libelous article is printed and first published or where any of the offended parties actually resides
at the time of the commission of the offense; Provided, however, That where one of the offended
parties is a public officer whose office is in the City of Manila at the time of the commission of the
offense, the action shall be filed in the Court of First Instance of the City of Manila or of the city or
province where the libelous article is printed and first published, and in case such public officer does
not hold office in the City of Manila, the action shall be filed in the Court of First Instance of the province
or city where he held office at the time of the commission of the offense or where the libelous article is
printed and first published and in case one of the offended parties is a private individual, the action shall
be filed in the Court of First Instance of the province or city where he actually resides at the time of the
commission of the offense or where the libelous matter is printed and first published; Provided, further,
That the civil action shall be filed in the same court where the criminal action is filed and vice versa;
Provided, furthermore, That the court where the criminal action or civil action for damages is first
filed, shall acquire jurisdiction to the exclusion of other courts; And provided finally, That this
amendment shall not apply to cases of written defamations, the civil and/or criminal actions which have
been filed in court at the time of the effectivity of the law xxx
Sec. 3. This Act shall take effect only if and when, within thirty days from its approval, the
newspapermen in the Philippines shall organize, and elect the members of, a Philippine
Press Council, a private agency of the said newspapermen, whose function shall be to
promulgate a Code of Ethics for them and the Philippine press investigate violations thereof, and
censure any newspaperman or newspaper guilty of any violation of the said Code, and the fact
that such Philippine Press Council has been organized and its members have been duly elected
in accordance herewith shall be ascertained and proclaimed by the President of the Philippines;
o The complaint lodged in the court of Rizal by respondents does not allege that the libelous article was
printed and first published in the province of Rizal and, since the respondents-plaintiffs are public officers
with offices in Manila at the time of the commission of the alleged offense, it is clear that the only place
left for them wherein to file their action, is the Court of First Instance of Manila;
o But respondents-plaintiffs argue that Republic Act No. 4363 is not applicable where the action is against
non-existent defendant, as petitioner Time, Inc., for several reasons. They urge that, in enacting Republic
Act No. 4363, Congress did not intend to protect non-resident defendants as shown by Section 3, which
provides for the effectivity of the statute only if and when the "newspapermen in the Philippines" have
organized a "Philippine Press Council" whose function shall be to promulgate a Code of Ethics for "them"
and "the Philippine press"; and since a non-resident defendant is not in a position to comply with the
conditions imposed for the effectivity of the statute, such defendant may not invoke its provisions; that a
foreign corporation is not inconvenienced by an out-of-town libel suit; that it would be absurd and
incongruous, in the absence of an extradition treaty, for the law to give to public officers with office in
Manila the second option of filing a criminal case in the court of the place where the libelous article is
printed and first published if the defendant is a foreign corporation and that, under the "single publication"
rule which originated in the United States and imported into the Philippines, the rule was understood to
mean that publications in another state are not covered by venue statutes of the forum;
The implication of respondents' argument is that the law would not take effect as to non-resident
defendants or accused. We see nothing in the text of the law that would sustain such unequal
protection to some of those who may be charged with libel. The official proclamation that a
Philippine Press Council has been organized is made a pre-condition to the effectivity of the
entire Republic Act No. 4363, and no terms are employed therein to indicate that the law can or
will be effective only as to some, but not all, of those that may be charged with libeling our public
officers;
The assertion that a foreign corporation or a non-resident defendant is not inconvenienced by an
out-of-town suit is irrelevant and untenable, for venue and jurisdiction are not dependent upon
convenience or inconvenience to a party; and moreover, venue was fixed under Republic Act No.
4363, pursuant to the basic policy of the law that is, as previously stated, to protect the interest of
the public service when the offended party is a public officer, by minimizing as much as possible
any interference with the discharge of his duties.
III. Rules on Jurisdiction

a. Jurisdiction Over the Person, Over the Res, and Over the Subject Matter
b. Actions in Personam v. Actions In Rem v. Actions Quasi In Rem v. Real Actions
(This case involves an action for damages against nonresident dudes who had just started
disposing of their Philippine properties. Their properties were attached, and extraterritorial service
of summons with publication was made. Later, the dudes filed a Motion to Lift the Order of
Default.) It is true that where the defendant in an action in personam is a non-resident, as in this
case, and refuses to appear and submit to the jurisdiction of the court, the jurisdiction of the latter
is limited to the property within the country which the court may have ordered attached. In such a
case, the property itself is "the sole thing which is impleaded and is the responsible object which is
the subject of the judicial power." Accordingly, "the relief must be confined to the res, and the court
cannot lawfully render a personal judgment against him; (Villareal v. CA)
o But this Court also acknowledged in Banco Espaol-Filipino that if property is attached and later the
defendant appears, "the cause becomes mainly a suit in personam, with the added incident that the
property attached remains liable, under the control of the court, to answer to any demand which may be
established against the defendant by the final judgment of the court;"
o The main action in an attachment or garnishment suit is in rem until jurisdiction of the defendant is
secured. Thereafter, it is in personam and also in rem, unless jurisdiction of the res is lost as by
dissolution of the attachment. If jurisdiction of the defendant is acquired but jurisdiction of the res is lost, it
is then purely in personam. . . . a proceeding against property without jurisdiction of the person of the
defendant is in substance a proceeding in rem; and where there is jurisdiction of the defendant, but the
proceeding against the property continues, that proceeding is none the less necessarily in rem, although
in form there is but a single proceeding;
o In this case, not only was property in the Philippines of private respondents attached, but, what is more,
private respondents subsequently appeared in the trial court and submitted to its jurisdiction.
Consequently, the jurisdiction of the trial court to render a judgment in personam against them is
undoubted;
o There can be no question regarding the trial court's acquisition of jurisdiction over the persons of
respondents when the latter's counsel entered her appearance on their behalf on February 7, 1990.
Through counsel, private respondents voluntarily appeared by filing a Notice of Appearance without
qualification and a Motion to Lift Order of Default with Motion for Reconsideration, in which they prayed for
affirmative reliefs, thus submitting to the jurisdiction of the court. The following instances have been
considered voluntary submission to the jurisdiction of the court: the filing by defendant of a motion to
admit answer; 57 the filing of a motion for reconsideration of the judgment by default; 58 and the filing of a
petition to set aside the judgment of default;
Not only did private respondents voluntarily submit themselves to the jurisdiction of the trial court,
they never questioned the validity of the mode of service of summons, that is, by extraterritorial
service upon them. As already stated, private respondents filed a notice of appearance without
qualification.
c. Service of Summons as Requirement of Procedural Due Process

d. Jurisdictional Issues Under Conflicts of Law Cases as a Question of Due Process
(This case involves a tax collection case by the state of Washington against International Shoe, a
company incorporated in the state of Delaware, with its principal place of business in Missouri.
International Shoe had no office nor stock there, and did not make contracts for sale in
Washington. All it had were 11 to 13 salesmen residing there, paid by commission. On occasion,
the salesmen rent rooms to exhibit samples.) The authority of the salesmen is limited to exhibiting
their samples and soliciting orders from prospective buyers, at prices and on terms fixed by
appellant. The salesmen transmit the orders to appellant's office in St. Louis for acceptance or
rejection, and, when accepted, the merchandise for filling the orders is shipped f.o.b. from points
outside Washington to the purchasers within the state. All the merchandise shipped into
Washington is invoiced at the place of shipment, from which collections are made. No salesman
has authority to enter into contracts or to make collections; (International Shoe Co. v. Washington
o Appellant also insists that its activities within the state were not sufficient to manifest its "presence" there,
and that, in its absence, the state courts were without jurisdiction, that, consequently, it was a denial of
due process for the state to subject appellant to suit. It refers to those cases in which it was said that the
mere solicitation of orders for the purchase of goods within a state, to be accepted without the state and
filled by shipment of the purchased goods interstate, does not render the corporation seller amenable to
suit within the state;
But now that the capias ad respondendum has given way to personal service of summons or
other form of notice, due process requires only that, in order to subject a defendant to a judgment
in personam, if he be not present within the territory of the forum, he have certain minimum
contacts with it such that the maintenance of the suit does not offend "traditional notions of fair
play and substantial justice;"
o Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were
a fact, it is clear that, unlike an individual, its "presence" without, as well as within, the state of its origin
can be manifested only by activities carried on in its behalf by those who are authorized to act for it. To
say that the corporation is so far "present" there as to satisfy due process requirements, for purposes of
taxation or the maintenance of suits against it in the courts of the state, is to beg the question to be
decided. For the terms "present" or "presence" are used merely to symbolize those activities of the
corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due
process. Those demands may be met by such contacts of the corporation with the state of the forum as
make it reasonable, in the context of our federal system of government, to require the corporation to
defend the particular suit which is brought there. An "estimate of the inconveniences" which would result
to the corporation from a trial away from its "home" or principal place of business is relevant in this
connection;
o "Presence" in the state in this sense has never been doubted when the activities of the corporation there
have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no
consent to be sued or authorization to an agent to accept service of process has been given;
Conversely, it has been generally recognized that the casual presence of the corporate agent, or
even his conduct of single or isolated items of activities in a state in the corporation's behalf, are
not enough to subject it to suit on causes of action unconnected with the activities there. To
require the corporation in such circumstances to defend the suit away from its home or other
jurisdiction where it carries on more substantial activities has been thought to lay too great and
unreasonable a burden on the corporation to comport with due process;
o It is evident that the criteria by which we mark the boundary line between those activities which justify the
subjection of a corporation to suit and those which do not cannot be simply mechanical or quantitative.
The test is not merely, as has sometimes been suggested, whether the activity, which the corporation has
seen fit to procure through its agents in another state, is a little more or a little less. Whether due process
is satisfied must depend, rather, upon the quality and nature of the activity in relation to the fair and
orderly administration of the laws which it was the purpose of the due process clause to insure. That
clause does not contemplate that a state may make binding a judgment in personam against an individual
or corporate defendant with which the state has no contacts, ties, or relations;
But, to the extent that a corporation exercises the privilege of conducting activities within a state, it
enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give
rise to obligations, and, so far as those obligations arise out of or are connected with the activities
within the state, a procedure which requires the corporation to respond to a suit brought to
enforce them can, in most instances, hardly be said to be undue;
o Applying these standards, the activities carried on in behalf of appellant in the State of Washington were
neither irregular nor casual. They were systematic and continuous throughout the years in question. They
resulted in a large volume of interstate business, in the course of which appellant received the benefits
and protection of the laws of the state, including the right to resort to the courts for the enforcement of its
rights. The obligation which is here sued upon arose out of those very activities. It is evident that these
operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just,
according to our traditional conception of fair play and substantial justice, to permit the state to enforce the
obligations which appellant has incurred there. Hence, we cannot say that the maintenance of the present
suit in the State of Washington involves an unreasonable or undue procedure.
We are likewise unable to conclude that the service of the process within the state upon an agent
whose activities establish appellant's "presence" there was not sufficient notice of the suit, or that
the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for
communicating the notice. It is enough that appellant has established such contacts with the state
that the particular form of substituted service adopted there gives reasonable assurance that the
notice will be actual.
1. Governing Law lex fori
(The principal issue here is whether a Japanese court can acquire jurisdiction over a Philippine
corporation doing business in Japan by serving summons through diplomatic channels on the
Philippine corporation at its principal office in Manila after prior attempts to serve summons in
Japan had failed.) It is settled that matters of remedy and procedure such as those relating to the
service of process upon a defendant are governed by the lex fori or the internal law of the forum.
In this case, it is the procedural law of Japan where the judgment was rendered that determines
the validity of the extraterritorial service of process on SHARP. As to what this law is a question of
fact, not of law. It may not be taken judicial notice of and must be pleaded and proved like any
other fact. Sections 24 and 25, Rule 132 of the Rules of Court provide that it may be evidenced by
an official publication or by a duly attested or authenticated copy thereof. It was then incumbent
upon SHARP to present evidence as to what that Japanese procedural law is and to show that
under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of
validity and regularity of the service of summons and the decision thereafter rendered by the
Japanese court must stand; (Northwest Orient Airlines, Inc., v. CA) (See supra)
IV. Foreign Corporations

a. Doing Business
b. Rules on Service of Summons on Foreign Corporations
As a general rule, unlicensed foreign non-resident corporations cannot file suits in the Philippines.
Section 133 of the Corporation Code is the law at point. (European Resources v. Ingenieuburo
Birkhahn)
o A corporation has legal status only within the state or territory in which it was organized. For this reason, a
corporation organized in another country has no personality to file suits in the Philippines. In order to
subject a foreign corporation doing business in the country to the jurisdiction of our courts, it must acquire
a license from the Securities and Exchange Commission (SEC) and appoint an agent for service of
process. Without such license, it cannot institute a suit in the Philippines.
o However, there are exceptions to this rule. In some cases, the court has declared that a party is estopped
from questioning the capacity of a foreign corporation to institute an action in courts where it had obtained
benefits from its dealings with such foreign corporation and thereafter committed a breach of or sought to
renege on its obligations. The rule relating to estoppel is deeply rooted in the axiom ofcommodum ex
injuria sua non habere debetno person ought to derive any advantage from his own wrong.
o There is no general rule or governing principle laid down as to what constitutes "doing" or "engaging in" or
"transacting" business in the Philippines. Thus, it has often been held that a single act or transaction may
be considered as "doing business" when a corporation performs acts for which it was created or exercises
some of the functions for which it was organized. The court has held that the act of participating in a
bidding process constitutes "doing business" because it shows the foreign corporations intention to
engage in business in the Philippines. In this regard, it is the performance by a foreign corporation of the
acts for which it was created, regardless of volume of business, that determines whether a foreign
corporation needs a license or not.
A foreign corporation without a license is not ipso facto incapacitated from bringing an action in
Philippine courts. A license is necessary only if a foreign corporation is "transacting" or "doing
business" in the country. The principles regarding the right of a foreign corporation to bring suit in
Philippine courts may thus be condensed in four statements: (1) if a foreign corporation does
business in the Philippines without a license, it cannot sue before the Philippine courts;(2) if a
foreign corporation is not doing business in the Philippines, it needs no license to sue before
Philippine courts on an isolated transaction or on a cause of action entirely independent of any
business transaction; (3) if a foreign corporation does business in the Philippines without a
license, a Philippine citizen or entity which has contracted with said corporation may be estopped
from challenging the foreign corporations corporate personality in a suit brought before Philippine
courts; and (4) if a foreign corporation does business in the Philippines with the required license, it
can sue before Philippine courts on any transaction. (Agilent Technologies Singapore v. Integrated
Silicon)
o Another issue to be determined is whether or not the corporation is doing business in the Philippines.
However there is no definitive rule on what constitutes "doing", "engaging in", or "transacting" business in
the Philippines. The Corporation Code itself is silent as to what acts constitute doing or transacting
business in the Philippines.
o Jurisprudence has held that the term "implies a continuity of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or works or the exercise of some of the functions
normally incident to or in progressive prosecution of the purpose and subject of its organization.
o In one case, the court discoursed on the two general tests to determine whether or not a foreign
corporation can be considered as "doing business" in the Philippines. The first of these is
the substance test, which provides that The true test for doing business, however, seems to be whether
the foreign corporation is continuing the body of the business or enterprise for which it was organized or
whether it has substantially retired from it and turned it over to another. The second test is
the continuity test, which states that The term doing business implies a continuity of commercial dealings
and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of
some of the functions normally incident to, and in the progressive prosecution of, the purpose and object
of its organization. Although each case must be judged in light of its attendant circumstances,
jurisprudence has evolved several guiding principles for the application of these tests.
Week 3
I. Origin and Basis
II. Purpose
III. Cases
To begin with, forum-shopping originated as a concept in private international law, where non-
resident litigants are given the option to choose the forum or place wherein to bring their suit
for various reasons or excuses, including to secure procedural advantages, to annoy and
harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. To
combat these less than honorable excuses, the principle of forum non conveniens was
developed whereby a court, in conflicts of law cases, may refuse impositions on its jurisdiction
where it is not the most "convenient" or available forum and the parties are not precluded from
seeking remedies elsewhere; (First Phil. Intl Bank v. CA)
o In this light, Black's Law Dictionary says that forum shopping "occurs when a party
attempts to have his action tried in a particular court or jurisdiction where he feels he will
receive the most favorable judgment or verdict." Hence, according to Words and
Phrases, "a litigant is open to the charge of "forum shopping" whenever he chooses a
forum with slight connection to factual circumstances surrounding his suit, and litigants
should be encouraged to attempt to settle their differences without imposing undue
expenses and vexatious situations on the courts;"
o In the Philippines, forum shopping has acquired a connotation encompassing not only a
choice of venues, as it was originally understood in conflicts of laws, but also to a choice
of remedies. As to the first (choice of venues), the Rules of Court, for example, allow a
plaintiff to commence personal actions "where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff". As to remedies, aggrieved parties, for example, are given a
choice of pursuing civil liabilities independently of the criminal, arising from the same set
of facts. A passenger of a public utility vehicle involved in a vehicular accident may sue
on culpa contractual, culpa aquiliana or culpa criminal each remedy being available
independently of the others although he cannot recover more than once;
o In either of these situations (choice of venue or choice of remedy), the litigant
actually shops for a forum of his action, This was the original concept of the term
forum shopping.
Eventually, however, instead of actually making a choice of the forum of their
actions, litigants, through the encouragement of their lawyers, file their actions
in all available courts, or invoke all relevant remedies simultaneously. This
practice had not only resulted to (sic) conflicting adjudications among different
courts and consequent confusion enimical (sic) to an orderly administration of
justice. It had created extreme inconvenience to some of the parties to the
action. Thus, "forum shopping" had acquired a different concept which is
unethical professional legal practice. And this necessitated or had given rise
to the formulation of rules and canons discouraging or altogether prohibiting
the practice;
o The test for determining whether a party violated the rule against forum shopping
has been laid dawn in the 1986 case of Buan vs. Lopez, also by Chief Justice
Narvasa, and that is, forum shopping exists where the elements of litis pendentia are
present or where a final judgment in one case will amount to res judicata in the other,
as follows:
There thus exists between the action before this Court and RTC Case No. 86-
36563 identity of parties, or at least such parties as represent the same
interests in both actions, as well as identity of rights asserted and relief prayed
for, the relief being founded on the same facts, and the identity on the two
preceding particulars is such that any judgment rendered in the other action,
will, regardless of which party is successful, amount to res adjudicata in the
action under consideration: all the requisites, in fine, of auter action pendant.
Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse
impositions on its jurisdiction where it is not the most "convenient" or available forum and the
parties are not precluded from seeking remedies elsewhere. Petitioners averments of the foreign
elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil
Case No. No. 1192-BG and the parties involved; (Raytheon Intl v. Rouzie)
o Moreover, the propriety of dismissing a case based on the principle of forum non
conveniens requires a factual determination; hence, it is more properly considered as a
matter of defense. While it is within the discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after vital facts are established, to determine
whether special circumstances require the courts desistance;
o Recently in Hasegawa v. Kitamura, the Court outlined three consecutive phases involved in
judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments. Thus, in the instances where the Court held that
the local judicial machinery was adequate to resolve controversies with a foreign element,
the following requisites had to be proved: (1) that the Philippine Court is one to which the
parties may conveniently resort; (2) that the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is
likely to have the power to enforce its decision. (Uh, stupid.)
The NLRC was a seriously inconvenient forum. We note that the main aspects of the case
transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link
that the Philippines has with the case is that respondent Santos is a Filipino citizen. The Palace
Hotel and MHICL are foreign corporations. Not all cases involving our citizens can be tried here;
(The Manila Hotel Corp. v. NLRC)
o Under the rule of forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is
one to which the parties may conveniently resort to; (2) that the Philippine court is in a
position to make an intelligent decision as to the law and the facts; and (3) that the
Philippine court has or is likely to have power to enforce its decision. The conditions
are unavailing in the case at bar;
o The employment contract. Respondent Santos was hired directly by the Palace Hotel, a
foreign employer, through correspondence sent to the Sultanate of Oman, where
respondent Santos was then employed. He was hired without the intervention of the POEA
or any authorized recruitment agency of the government;
o Not Convenient. We fail to see how the NLRC is a convenient forum given that all the
incidents of the case from the time of recruitment, to employment to dismissal occurred
outside the Philippines. The inconvenience is compounded by the fact that the proper
defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither .are
they "doing business in the Philippines." Likewise, the main witnesses, Mr. Shmidt and Mr.
Henk are non-residents of the Philippines;
o No power to determine applicable law. Neither can an intelligent decision be made as to
the law governing the employment contract as such was perfected in foreign soil. This calls
to fore the application of the principle of lex loci contractus (the law of the place where the
contract was made);
o No power to determine the facts. Neither can the NLRC determine the facts surrounding
the alleged illegal dismissal as all acts complained of took place in Beijing, People's
Republic of China. The NLRC was not in a position to determine whether the Tiannamen
Square incident truly adversely affected operations of the Palace Hotel as to justify
respondent Santos' retrenchment;
o Principle of effectiveness, no power to execute decision. Even assuming that a proper
decision could be reached by the NLRC, such would not have any binding effect against the
employer, the Palace Hotel. The Palace Hotel is a corporation incorporated under the laws
of China and was not even served with summons. Jurisdiction over its person was not
acquired.
Petitioner's insistence on the dismissal of this action due to the application, or non application, of
the private international law rule of forum non conveniens defies well-settled rules of fair play.
According to petitioner, the Philippine Court has no venue to apply its discretion whether to give
cognizance or not to the present action, because it has not acquired jurisdiction over the person of
the plaintiff in the case, the latter allegedly having no personality to sue before Philippine Courts.
This argument is misplaced because the court has already acquired jurisdiction over the plaintiff in
the suit, by virtue of his filing the original complaint. And as we have already observed, petitioner
is not at liberty to question plaintiff's standing to sue, having already acceded to the same by virtue
of its entry into the Representative Agreement referred to earlier; (Communications Material and
Design v. CA)
o Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the facts of
the case, whether to give due course to the suit or dismiss it, on the principle of forum non
convenience. Hence, the Philippine Court may refuse to assume jurisdiction in spite of its
having acquired jurisdiction. Conversely, the court may assume jurisdiction over the case if
it chooses to do so; provided, that the following requisites are met: 1) That the Philippine
Court is one to which the parties may conveniently resort to; 2) That the Philippine Court is
in a position to make an intelligent decision as to the law and the facts; and, 3) That the
Philippine Court has or is likely to have power to enforce its decision;
o The aforesaid requirements having been met, and in view of the court's disposition to give
due course to the questioned action, the matter of the present forum not being the "most
convenient" as a ground for the suit's dismissal, deserves scant consideration.
(Hasegawa v. Kitamura, see supra)
The doctrine of forum non-conveniens, literally meaning the forum is inconvenient, emerged in
private international law to deter the practice of global forum shopping,[42] that is to prevent non-
resident litigants from choosing the forum or place wherein to bring their suit for malicious reasons,
such as to secure procedural advantages, to annoy and harass the defendant, to avoid
overcrowded dockets, or to select a more friendly venue. Under this doctrine, a court, in conflicts
of law cases, may refuse impositions on its jurisdiction where it is not the most convenient or
available forum and the parties are not precluded from seeking remedies elsewhere; (Bank of
America NT&SA v. CA)
o Whether a suit should be entertained or dismissed on the basis of said doctrine depends
largely upon the facts of the particular case and is addressed to the sound discretion of the
trial court. In the case of Communication Materials and Design, Inc. vs. Court of Appeals,
this Court held that xxx [a] Philippine Court may assume jurisdiction over the case if it
chooses to do so; provided, that the following requisites are met: (1) that the Philippine
Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is
in a position to make an intelligent decision as to the law and the facts; and, (3) that the
Philippine Court has or is likely to have power to enforce its decision. Evidently, all these
requisites are present in the instant case;
o Moreover, this Court enunciated in Philsec. Investment Corporation vs. Court of Appeals,
that the doctrine of forum non conveniens should not be used as a ground for a motion to
dismiss because Sec. 1, Rule 16 of the Rules of Court does not include said doctrine as a
ground. This Court further ruled that while it is within the discretion of the trial court to
abstain from assuming jurisdiction on this ground, it should do so only after vital facts are
established, to determine whether special circumstances require the courts desistance;
and that the propriety of dismissing a case based on this principle of forum non conveniens
requires a factual determination, hence it is more properly considered a matter of defense.
(Pioneer Concrete v. Todaro see immediately preceding case, which was quoted.)
Forum non conveniens is inapplicable. Unless the balance is strongly in favor of the defendant, the
plaintiffs choice of forum should be rarely disturbed, and furthermore, the consideration of
inadequacy to enforce the judgment, which is one of the important factors to be considered in the
application of said principle, would precisely constitute a problem to the plaintiff if the local courts
decline to assume JD on the basis of said principle, considering that defendant is a resident of the
Philippines;
o There is no existing catalogue of circumstances that will justify sustaining a plea of forum
non conveniens but, in general, both public and private interests should be weighed;
o 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 provides procedural
remedies not available in another state, the forum court may not resist imposition upon its
JD.
Specific Areas of Discussion on Choice of Law Issues
A. Personal Status, Legal Personality and Capacity
Wherein one case, a contract of services was entered into between Mrs. Harden and Atty. Recto;
its purpose was not to secure a divorce or to facilitate or promote the procurement of a divorce but
merely sought to protect the interests of the wife in the conjugal partnership during the pendency
of a divorce suit she intended to file in the United States. Their status and dissolution thereof are
governed pursuant to Article 9 of the Civil Code of Spain (in force at the time of the execution of
the contract) and Article 15 of the Civil Code of the Philippines by the laws of the United States,
which sanction divorce. In short, the contract of services between Mrs. Harden and Atty. Recto is
not contrary to law, morals, good customs, public order or public policy. The contention that the
contract in question has for its purpose to secure a decree of divorce in violation of the Civil Code
of the Philippines is not borne out by the language of the contract or by the intent of the parties.
(Recto v. Harden)
The Courts of First Instance of the Philippine Islands have jurisdiction to try actions for divorce
(separation) when the parties litigant, one or both, are citizens or residents, even though they are
Spanish subjects and were married in accordance with the ecclesiastical forms and ceremonies
(Barnuevo v. Fuster)
o The authority of jurisdictional power of courts to decree a divorce is not comprised within the personal
status of the husband and wife, simply because the whole theory of the statuses and of the rights which
belong to everyone does not got beyond the sphere of private law, and the authority and jurisdiction of the
courts are not a matter of the private law of persons, but of the public or political law of the nation. The
jurisdiction of courts and other question relation to procedure are considered to be of a public nature and
consequently are generally submitted to the territorial principle.
No rule is better settled in law than that matters bearing upon the execution, interpretation, and
validity of a contract are determined by the law of the place where the contract is made. Matters
connected with performance are regulated by the law prevailing at the place of performance.
Remedies such as the bringing of suit, admissibility of evidence, and the statute of limitations,
depend upon the law of the place where the action is brought. (Insular Government v. Frank)
o The record discloses that at the time the contract was entered into in the State of Illinois, Chicago he was
an adult under the laws of that State and had full authority to contract. The defendant claims that by
reason of the fact that under the laws of the Philippine Islands at the time the contract was made, male
persons in said Islands did not reach their majority until they had attained the age of 23 years, he was not
liable under said contract, contending that the laws of the Philippine Islands governed. It was ruled that
defendants claim that he was an adult when he left Chicago but was a minor when he arrived at Manila;
that he was an adult at the time he made the contract but was a minor at the time the plaintiff attempted to
enforce the contract, more than a year later, is not tenable. Defendant therefore is liable under the
contract and could be enforced against him.
B. Nationality, Residence and Domicile
The Roa decision (October 1912) set a precedent that was uniformly followed in numerous cases.
This long line of decisions applied the principle of jus soli up to September 16, 1947 in the cases
of Tan Chong v. Secretary of Labor and Swee Sang v. Commonwealth, where the principle was
renounced. In abrogating the doctrine laid down in the Roa case and making jus sanguinis the
predominating principle in the determination of Philippine citizenship, the Constitution did not
intend to exclude those who were citizens of the Philippines by judicial declaration at the time of its
adoption. If on the strength of the Roa decision a person was considered a full-pledged Philippine
citizen on the date of the adoption of the Constitution when jus soli had been the prevailing
doctrine, he cannot be divested of his Filipino citizenship. (Talaroc v. Uy)
o In the Roa case, the court held that Article 17 of the Civil Code is sufficient to show that the first
paragraph affirms and recognizes the principle of nationality by place of birth, jus soli.
o Where in the instant case, it was found that petitioners father was a subject of Spain by virtue of Article
17 of the Civil Code, and that his mother ipso facto reacquired her Filipino citizenship upon the death of
her husband on 1917 and the child (petitioner) followed her citizenship, and that the petitioner is a citizen
of the Philippines by the mere fact of his birth therein, this goes to show that petitioner was considered a
full-pledged Philippine citizen on the date of the adoption of the Constitution when jus soli had been the
prevailing doctrine. The abrogation of the jus soli doctrine, by making jus sanguinis the predominating
principle, cannot serve to exclude those who were citizens of the Philippines by judicial declaration at the
time of the adoption of the Constitution.
o The Tan Chong decision also affirms by making a reservation thus: Needless to say, this decision is not
intended or designed to deprive, as it can not divest, of their Filipino citizenship, those who have been
declared to be Filipino citizens, or upon whom such citizenship had been conferred by the courts because
of the doctrine or principle of res adjudicata.
Under Philippine law, citizenship may be reacquired by direct act of Congress, by naturalization or
by repatriation. (Frivaldo v. COMELEC)
o In Frivaldos case, he tried to resume his citizenship by direct act of Congress, but that the bill allowing
him to do so failed to materialize, notwithstanding the endorsement of several members of the House of
Representatives due to the maneuvers of his political rivals. In the same case, his attempt at
naturalization was rejected by this Court. Frivaldo was a natural-born citizen who openly and faithfully
served his country and his province prior to his naturalization in the United States naturalization he
insists was made necessary only to escapte the iron clutches of a dictatorship he abhorred and could not
in conscience embrace. After the fall of the dictator, he wasted no time in returning to his country of birth
to offer once more his talent and services to his people.
o Following that line, in the case of Frivaldo, who was a former Filipino who has served the people
repeatedly, Frivaldo deserves a liberal interpretation of Philippine laws and whatever defects there were in
his nationality should now be deemed mooted by his repatriation, which he was able to achieve.
o Decisions declaring the acquisition or denial of citizenship cannot govern a persons future status with
finality. This is because a person may subsequently reacquire, or for that matter lose, his citizenship
under any of the modes recognized by law for the purpose.
It is a 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.
The tyrannical intolerance of said dictatorships toward all opposition induced them to resort to
beastly oppressions and it is only natural that the not-so-fortunate ones who were able to
escape to foreign countries should feel the loss of all bonds of attachment to the hells which were
formerly their fatherlands. Petitioner Kookooritchkin belongs to that group of stateless refugees
and not a citizen of Russia, hence he is not disqualified from availing Philippine citizenship under
the Revised Naturalization Law. (Kookooritchkin v. Solicitor General)
o Kookooritchkin, although a Russian by birth, he is not a citizen of Soviet Russia. He disclaims allegiance
to the present Communist Government. He is therefore a stateless refugee in this country belonging to no
State, much less to the present Government of the land of his birth which he is opposed against.
o With regard to his residence, the undisputed fact remains that petitioner has been continuously residing in
the Philippines for about 25 years, without having been molested by the authorities and would have
arrested petitioner if his residence is illegal.
Nationality is a legal bond having as its basis a social fact of attachment, a genuine connection of
existence, interests and sentiments, together with the existence of reciprocal rights and duties. It
may be said to constitute the juridical expression of the fact that the individual upon whom it is
conferred, either directly by the law or as the result of an act of the authorities, is in fact more
closely connected with the population of the State conferring nationality than with that of any other
State. Conferred by a State, it only entitles that State to exercise protection vis--vis another State,
if it constitutes a translation into juridical terms of the individuals connection with the State which
has made him its national. (Liechtenstein v. Guatemala)
o Since this is the character which nationality must present when it is invoked to furnish the State which has
granted it with a title to the exercise of protection and to the institution of international judicial proceedings
the Court must ascertain whether the nationality granted to Nottebohm by means of naturalization is of
this character or, in other words, whether the factual connection between Nottebohm and Liechtenstein in
the period preceding, contemporaneous with and following his naturalization appears to be sufficiently
close, so preponderant in relation to any connection which may have existed between him and any other
State, that it is possible to regard the nationality conferred upon him as real and effective, as the exact
juridical expression of a social fact of a connection which existed previously or came into existence
thereafter.
o Naturalization is not a matter to be taken lightly. To seek and to obtain it is not something that happens
frequently in the life of a human being. It involes his breaking of a bond of allegiance and his
establishment of a new bond of allegiance. It may have farreaching consequences and involve profound
changes in the destiny of the individual who obtains it. It concerns him personally, and to consider it only
from the point of view of its repercussions with regard to his property would be to misunderstand its
profound significance. In order to appraise its international effect, it is impossible to disregard the
circumstances in which it was conferred, the serious character which attaches to it, the real and effective,
and not merely the verbal preference of the individual seeking it for the country which grants it to him.
o Thus where Nottebohms actual connections with Liechtenstein consisted of merely paying a visit and
which is characterized by no settled abode and no prolonged residence and that no intention of settling
there was shown by the mere fact that he returned to Guatemala shortly after his naturalization and
showed every intention of remaining there goes to show the absence of any bond attachment between
Nottebohm and Liechtenstein.
o In this case, the facts show that Nottebohm merely went to Liechtenstein because of Guatemalas refusal
to admit him. No indication is given of the grounds warranting the waiver of the condition of residence,
required by the Nationality Law, which waiver was implicitly granted to him. There is no allegation of any
economic interests or of any activities exercised or to be exercised in Liechtenstein, and no manifestation
of any intention whatsoever to transfer all or some of his interests and business activities.
o Naturalization in this case was asked for not so much for the purpose of obtaining a legal recognition of
Nottebohms membership in fact in the population of Liechtenstein, as it was to enable him to substitute
for his status as a national of a belligerent State that of a national of a neutral State, with the sole aim of
thus coming within the protection of Liechtenstein but not of becoming wedded to its traditions, its
interests, its way of life or of assuming the obligations other than fiscal obligations and exercising the
rights pertaining to the status thus acquired.
Residence, in its ordinary conception, implies the factual relationship of an individual to a certain
place. It is the physical presence of a person in a given area, community or country. The essential
distinction between residence and domicile in law is that residence involves the intent to leave
when the purpose for which the resident has taken up his abode ends. If a persons intent be to
remain, it becomes his domicile; if his intent is to leave as soon as his purpose is established, it is
residence. It is thus quite perfectly normal for an individual to have different residences in various
places. However a person can only have a single domicile, unless, for various reasons, he
successfully abandons his domicile in favor of another domicile of choice. (Romualdez-Marcos v.
COMELEC)
o Residence for election purposes is used synonymously with domicile. When the Constitution speaks of
residence in election law, it actually means only domicile.
o It is the fact of residence, not a statement in a certificate of candidacy which ought to be decisive in
determining whether or not an individual has satisfied the constitutions residency qualification
requirement. The statement only becomes material only when there appears to be a deliberate attempt to
mislead, misinform or hide a fact which would otherwise render a candidate ineligible.
o An individual does not lose his domicile even if he has lived and maintained residences in different places.
Residence, it bears repeating, implies a factual relationship to a given place for various purposes. The
absence from legal residence or domicile to pursue a profession, to study or to do other things of a
temporary or semi-permanent nature does not constitute loss of residence.
o A minor follows the domicile of his parents. As domicile, once acquired is retained until a new one is
gained.
o Domicile of origin is not easily lost. To successfully effect a change of domicile, one must demonstrate: 1.
An actual removal or an actual change of domicile; 2. A bona fide intention of abandoning the former
place of residence and establishing a new one; and 3. Acts which correspond with the purpose.
o In the absence of clear and positive proof based on the above criteria, the residence of origin should be
deemed to continue. Only with evidence showing concurrence of all three requirements can the
presumption of continuity or residence be rebutted, for a change of residence requires an actual and
deliberate abandonment, and one cannot have two legal residences at the same time.
o Jurisprudence has held that there is nothing that would suggest that the female spouse automatically
loses her domicile of origin in favor of the husbands choice of residence upon marriage. In the case of
Mrs. Marcos, when she was married to Congressman Marcos, she merely gained actual residence she
did not lose her domicile of origin.
o There is a clearly established distinction between the Civil Code concepts of domicile and residence. The
term residence may mean one thing in civil law and quite another in political law. What stands clear is that insofar as the
Civil Code is concerned affecting the rights and obligations of husband and wife, the term residence should only be
interpreted to mean actual residence.
C. Family Law
Civil Code Article 15

Article 16
Family CodeArticle 10
Article 21
Article 26
Article 35
Article 36
Article 37
Article 38
Article 80
Article 96
Article 184
Article 187
(This case involves an ill-starred marriage of a Filipina and a foreigner which ended in a foreign
absolute divorce, only to be followed by a criminal infidelity suit of the latter against the former.)
Now, the law specifically provides that in prosecutions for adultery and concubinage the person
who can legally file the complaint should be the offended spouse, and nobody else Corollary
to such exclusive grant of power to the offended spouse to institute the action, it necessarily
follows that such initiator must have the status, capacity or legal representation to do so at the
time of the filing of the criminal action. This is a familiar and express rule in civil actions; in fact,
lack of legal capacity to sue, as a ground for a motion to dismiss in civil cases, is determined
as of the filing of the complaint or petition; (Pilapil v. Ibay-Somera)
o In the present case, the fact that private respondent obtained a valid divorce in his country, the Federal
Republic of Germany, is admitted. Said divorce and its legal effects may be recognized in the Philippines
insofar as private respondent is concerned in view of the nationality principle in our civil law on the matter
of status of persons;
o There can be no question as to the validity of that Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the Union. ... Thus, pursuant to his
national law, private respondent is no longer the husband of petitioner. He would have no standing to sue
in the case below as petitioner's husband entitled to exercise control over conjugal assets;
o Under the same considerations and rationale, private respondent, being no longer the husband of
petitioner, had no legal standing to commence the adultery case under the imposture that he was the
offended spouse at the time he filed suit.
(This case involves marriage between a German and a Filipina in Germany. The German
obtained a decree of divorce from Hamburg, with custody of the two chidren granted to him.) In
this case, the divorce decree issued by the German court dated December 16, 1997 has not
been challenged by either of the parties. In fact, save for the issue of parental custody, even
the trial court recognized said decree to be valid and binding, thereby endowing private
respondent the capacity to remarry. Thus, the present controversy mainly relates to the award
of the custody of their two children, Carolynne and Alexandra Kristine, to petitioner; (Roehr v.
Rodriguez)
o As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our
jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children, must still be
determined by our courts.23 Before our courts can give the effect of res judicata to a foreign judgment,
such as the award of custody to petitioner by the German court, it must be shown that the parties
opposed to the judgment had been given ample opportunity to do so on grounds allowed under Rule 39,
Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit:
SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country,
having jurisdiction to pronounce the judgment 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 a judgment against a person, the judgment is presumptive evidence of a right as
between the parties and their successors in interest by a subsequent title; but the judgment may
be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.
o It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court
in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of Court clearly provide
that with respect to actions in personam, as distinguished from actions in rem, a foreign judgment merely
constitutes prima facie evidence of the justness of the claim of a party and, as such, is subject to proof to
the contrary;
o In the present case, it cannot be said that private respondent was given the opportunity to challenge the
judgment of the German court so that there is basis for declaring that judgment as res judicata with regard
to the rights of petitioner to have parental custody of their two children. The proceedings in the German
court were summary. As to what was the extent of private respondents participation in the proceedings in
the German court, the records remain unclear. The divorce decree itself states that neither has she
commented on the proceedings nor has she given her opinion to the Social Services Office. Unlike
petitioner who was represented by two lawyers, private respondent had no counsel to assist her in said
proceedings. More importantly, the divorce judgment was issued to petitioner by virtue of the German
Civil Code provision to the effect that when a couple lived separately for three years, the marriage is
deemed irrefutably dissolved. The decree did not touch on the issue as to who the offending spouse was.
Absent any finding that private respondent is unfit to obtain custody of the children, the trial court was
correct in setting the issue for hearing to determine the issue of parental custody, care, support and
education mindful of the best interests of the children.
(This case involves a controversy over the adoption of a child the issue is whether or not petitioner had
abandoned his children as to warrant dispensation of his consent to their adoption.) The transfer of custody over
the children to Anna Marie by virtue of the decree of legal separation did not, of necessity; deprive petitioner of
parental authority for the purpose of placing the children up for adoption. Article 213 of the Family Code states: "..
in case of legal separation of parents, parental authority shall be exercised by the parent designated by the court."
In awarding custody, the court shall take into account "all relevant considerations, especially the choice of the
child over seven years of age, unless the parent chosen is unfit." (Cang v. CA)
o If should be noted, however, that the law only confers on the innocent spouse the "exercise" of parental
authority. Having custody of the child, the innocent spouse shall implement the sum of parental rights with
respect to his rearing and care. The innocent spouse shall have the right to the child's services and
earnings, and the right to direct his activities and make decisions regarding his care and control,
education, health and religion.
o Parental authority and responsibility are inalienable and may not be transferred or renounced except in
cases authorized by law. The right attached to parental authority, being purely personal, the law allows a
waiver of parental authority only in cases of adoption, guardianship and surrender to a children's home or
an orphan institution. When a parent entrusts the custody of a minor to another, such as a friend or
godfather, even in a document, what is given is merely temporary custody and it does not constitute a
renunciation of parental authority. Even if a definite renunciation is manifest, the law still disallows the
same.
o In its ordinary sense, the word "abandon'' means to forsake entirely, to forsake or renounce utterly. The
dictionaries trace this word to the root idea of "putting under a ban." The emphasis is on the finality and
publicity with which a thing or body is thus put in the control of another, hence, the meaning of giving up
absolutely, with intent never to resume or claim one's rights or interests. In reference to abandonment of a
child by his parent, the act of abandonment imports "any conduct of the parent which evinces a settled
purpose to forego all parental duties and relinquish all parental claims to the child." It means "neglect or
refusal to perform the natural and legal obligations of care and support which parents owe their children;"
o In the instant case, records disclose that petitioner's conduct did not manifest a settled purpose to forego
all parental duties and relinquish all parental claims over his children as to, constitute abandonment.
Physical estrangement alone, without financial and moral desertion, is not tantamount to abandonment.
While admittedly, petitioner was physically absent as he was then in the United States, he was not remiss
in his natural and legal obligations of love, care and support for his children. He maintained regular
communication with his wife and children through letters and telephone. He used to send packages by
mail and catered to their whims;
o Indeed, it would be against the spirit of the law if financial consideration were to be the paramount
consideration in deciding whether to deprive a person of parental authority over his children. There should
be a holistic approach to the matter, taking into account the physical, emotional, psychological, mental,
social and spiritual needs of the child. The conclusion of the courts below that petitioner abandoned his
family needs more evidentiary support other than his inability to provide them the material comfort that his
admittedly affluent in-laws could provide. There should be proof that he had so emotionally abandoned
them that his children would not miss his guidance and counsel if they were given to adopting parents.
The letters he received from his children prove that petitioner maintained the more important emotional tie
between him and his children. The children needed him not only because he could cater to their whims
but also because he was a person they could share with their daily activities, problems and triumphs;
o Nonetheless, the actuality that petitioner carried on an affair with a paramour cannot be taken as sufficient
basis for the conclusion that petitioner was necessarily an unfit father. 41 Conventional wisdom and
common human experience show that a "bad" husband does not necessarily make a "bad" father. That a
husband is not exactly an upright man is not, strictly speaking, a sufficient ground to deprive him as a
father of his inherent right to parental authority over the children. 42 Petitioner has demonstrated his love
and concern for his children when he took the trouble of sending a telegram 43 to the lower court
expressing his intention to oppose the adoption immediately after learning about it. He traveled back to
this country to attend to the case and to testify about his love for his children and his desire to unite his
family once more in the United States.
There can be no serious dispute that Rebecca, at the time she applied for and obtained her divorce from Vicente,
was an American citizen and remains to be one, absent proof of an effective repudiation of such citizenship. The
following are compelling circumstances indicative of her American citizenship: (1) she was born in Agaa, Guam,
USA; (2) the principle of jus soli is followed in this American territory granting American citizenship to those who
are born there; and (3) she was, and may still be, a holder of an American passport; (Bayot v. CA)
o And as aptly found by the CA, Rebecca had consistently professed, asserted, and represented herself as
an American citizen, particularly: (1) during her marriage as shown in the marriage certificate; (2) in the
birth certificate of Alix; and (3) when she secured the divorce from the Dominican Republic. Mention may
be made of the Affidavit of Acknowledgment in which she stated being an American citizen;
o First, at the time of the divorce, as above elucidated, Rebecca was still to be recognized, assuming for
argument that she was in fact later recognized, as a Filipino citizen, but represented herself in public
documents as an American citizen. At the very least, she chose, before, during, and shortly after her
divorce, her American citizenship to govern her marital relationship. Second, she secured personally said
divorce as an American citizen, as is evident in the text of the Civil Decrees;
o Third, being an American citizen, Rebecca was bound by the national laws of the United States of
America, a country which allows divorce. Fourth, the property relations of Vicente and Rebecca were
properly adjudicated through their Agreement executed on December 14, 1996 after Civil Decree No.
362/96 was rendered on February 22, 1996, and duly affirmed by Civil Decree No. 406/97 issued on
March 4, 1997. Veritably, the foreign divorce secured by Rebecca was valid;
o To be sure, the Court has taken stock of the holding in Garcia v. Recio that a foreign divorce can be
recognized here, provided the divorce decree is proven as a fact and as valid under the national law of the
alien spouse. Be this as it may, the fact that Rebecca was clearly an American citizen when she secured
the divorce and that divorce is recognized and allowed in any of the States of the Union, the presentation
of a copy of foreign divorce decree duly authenticated by the foreign court issuing said decree is, as
here, sufficient;
It bears to stress that the existence of the divorce decree has not been denied, but in fact
admitted by both parties. And neither did they impeach the jurisdiction of the divorce court nor
challenge the validity of its proceedings on the ground of collusion, fraud, or clear mistake of fact
or law, albeit both appeared to have the opportunity to do so. The same holds true with respect to
the decree of partition of their conjugal property. As this Court explained in Roehr v. Rodriguez:
Before our courts can give the effect of res judicata to a foreign judgment [of divorce] x x x, it must
be shown that the parties opposed to the judgment had been given ample opportunity to do so on
grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997
Rules of Civil Procedure), to wit:
It is essential that there should be an opportunity to challenge the foreign judgment, in order for
the court in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of
Court clearly provide that with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment |merely constitutes prima facie evidence of the justness of the claim of a
party and, as such, is subject to proof to the contrary;
o As the records show, Rebecca, assisted by counsel, personally secured the foreign divorce while Vicente
was duly represented by his counsel, a certain Dr. Alejandro Torrens, in said proceedings. As things
stand, the foreign divorce decrees rendered and issued by the Dominican Republic court are valid and,
consequently, bind both Rebecca and Vicente.
(This case involves a recently-divorced Canadian citizen who wanted to marry a Filipina in the Philippines.)
Desirous of marrying his new Filipina fiance in the Philippines, Gerbert went to the Pasig City Civil Registry
Office and registered the Canadian divorce decree on his and Daisylyns marriage certificate. Despite the
registration of the divorce decree, an official of the National Statistics Office (NSO) informed Gerbert that the
marriage between him and Daisylyn still subsists under Philippine law; to be enforceable, the foreign divorce
decree must first be judicially recognized by a competent Philippine court, pursuant to NSO Circular No. 4, series
of 1982; (Corpuz v. Sto. Tomas)
o The RTC denied Gerberts petition. The RTC concluded that Gerbert was not the proper party to institute
the action for judicial recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It
ruled that only the Filipino spouse can avail of the remedy, under the second paragraph of Article 26 of
the Family Code, in order for him or her to be able to remarry under Philippine law;
o The alien spouse can claim no right under the second paragraph of Article 26 of the Family Code
as the substantive right it establishes is in favor of the Filipino spouse;
The legislative intent is for the benefit of the Filipino spouse, by clarifying his or her marital status,
settling the doubts created by the divorce decree. Essentially, the second paragraph of Article 26
of the Family Code provided the Filipino spouse a substantive right to have his or her marriage to
the alien spouse considered as dissolved, capacitating him or her to remarry;
o We qualify our above conclusion i.e., that the second paragraph of Article 26 of the Family Code
bestows no rights in favor of aliens with the complementary statement that this conclusion is not
sufficient basis to dismiss Gerberts petition before the RTC. In other words, the unavailability of the
second paragraph of Article 26 of the Family Code to aliens does not necessarily strip Gerbert of legal
interest to petition the RTC for the recognition of his foreign divorce decree. The foreign divorce decree
itself, after its authenticity and conformity with the aliens national law have been duly proven according to
our rules of evidence, serves as a presumptive evidence of right in favor of Gerbert, pursuant to Section
48, Rule 39 of the Rules of Court which provides for the effect of foreign judgments;
o In Gerberts case, since both the foreign divorce decree and the national law of the alien, recognizing his
or her capacity to obtain a divorce, purport to be official acts of a sovereign authority, Section 24, Rule
132 of the Rules of Court comes into play. This Section requires proof, either by (1) official publications or
(2) copies attested by the officer having legal custody of the documents. If the copies of official records
are not kept in the Philippines, these must be (a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his office;
The records show that Gerbert attached to his petition a copy of the divorce decree, as well as
the required certificates proving its authenticity, but failed to include a copy of the Canadian law
on divorce. Under this situation, we can, at this point, simply dismiss the petition for insufficiency
of supporting evidence, unless we deem it more appropriate to remand the case to the RTC to
determine whether the divorce decree is consistent with the Canadian divorce law.
o As a matter of "housekeeping" concern, we note that the Pasig City Civil Registry Office has already
recorded the divorce decree on Gerbert and Daisylyns marriage certificate based on the mere
presentation of the decree. We consider the recording to be legally improper; hence, the need to draw
attention of the bench and the bar to what had been done. A judgment of divorce is a judicial decree,
although a foreign one, affecting a persons legal capacity and status that must be recorded;
But while the law requires the entry of the divorce decree in the civil registry, the law and the
submission of the decree by themselves do not ipso facto authorize the decrees registration. The
law should be read in relation with the requirement of a judicial recognition of the foreign
judgment before it can be given res judicata effect. In the context of the present case, no judicial
order as yet exists recognizing the foreign divorce decree. Thus, the Pasig City Civil Registry
Office acted totally out of turn and without authority of law when it annotated the Canadian divorce
decree on Gerbert and Daisylyns marriage certificate, on the strength alone of the foreign decree
presented by Gerbert;
o Another point we wish to draw attention to is that the recognition that the RTC may extend to the
Canadian divorce decree does not, by itself, authorize the cancellation of the entry in the civil registry. A
petition for recognition of a foreign judgment is not the proper proceeding, contemplated under the Rules
of Court, for the cancellation of entries in the civil registry;
o We hasten to point out, however, that this ruling should not be construed as requiring two separate
proceedings for the registration of a foreign divorce decree in the civil registry one for recognition of the
foreign decree and another specifically for cancellation of the entry under Rule 108 of the Rules of Court.
The recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object
of special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish the status
or right of a party or a particular fact. Moreover, Rule 108 of the Rules of Court can serve as the
appropriate adversarial proceeding by which the applicability of the foreign judgment can be measured
and tested in terms of jurisdictional infirmities, want of notice to the party, collusion, fraud, or clear mistake
of law or fact.
Before a foreign judgment is given presumptive evidentiary value, the document must first be presented and
admitted in evidence. A divorce obtained abroad is proven by the divorce decree itself. Indeed the best evidence
of a judgment is the judgment itself. The decree purports to be a written act or record of an act of an officially body
or tribunal of a foreign country. Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document
may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy
thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines,
such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the
seal of his office; (Recio v. Recio)
o The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an
Australian family court. However, appearance is not sufficient; compliance with the aforemetioned rules on
evidence must be demonstrated;
o It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws. Like any other
facts, they must be alleged and proved. Australian marital laws are not among those matters that judges
are supposed to know by reason of their judicial function. The power of judicial notice must be exercised
with caution, and every reasonable doubt upon the subject should be resolved in the negative
o Respondent replies that the Australian divorce decree, which was validly admitted in evidence, adequately
established his legal capacity to marry under Australian law. Respondent's contention is untenable. In its
strict legal sense, divorce means the legal dissolution of a lawful union for a cause arising after marriage.
But divorces are of different types. The two basic ones are (1) absolute divorce or a vinculo matrimonii
and (2) limited divorce or a mensa et thoro. The first kind terminates the marriage, while the second
suspends it and leaves the bond in full force. There is no showing in the case at bar which type of divorce
was procured by respondent;
Respondent presented a decree nisi or an interlocutory decree a conditional or provisional
judgment of divorce. It is in effect the same as a separation from bed and board, although an
absolute divorce may follow after the lapse of the prescribed period during which no reconciliation
is effected.
We also reject the claim of respondent that the divorce decree raises a disputable presumption or
presumptive evidence as to his civil status based on Section 48, Rule 39 of the Rules of Court, for
the simple reason that no proof has been presented on the legal effects of the divorce decree
obtained under Australian laws;
We clarify. To repeat, the legal capacity to contract marriage is determined by the national law of
the party concerned. The certificate mentioned in Article 21 of the Family Code would have been
sufficient to establish the legal capacity of respondent, had he duly presented it in court. A duly
authenticated and admitted certificate is prima facie evidence of legal capacity to marry on the
part of the alien applicant for a marriage license.
D. Succession
Article 17
Article 815
Article 816
Article 817
Article 818
Article 819
Article 829
Article 1039
The trial court found that under the law of California, upon the death of the wife, the entire community property
without administration belongs to the surviving husband; that he is the absolute owner of all the community
property from the moment of the death of his wife, not by virtue of succession or by virtue of her death, but by
virtue of the fact that when the death of the wife precedes that of the husband he acquires the community
property, not as an heir or as the beneficiary of his deceased wife, but because she never had more than an
inchoate interest or expentancy which is extinguished upon her death; (Gibbs v. Government of the Philippine
Islands)
o "The decisions under this section (1401 Civil Code of California) are uniform to the effect that the husband
does not take the community property upon the death of the wife by succession, but that he holds it all
from the moment of her death as though required by himself. ... It never belonged to the estate of the
deceased wife;
o The argument of the appellee apparently leads to this dilemma: If he takes nothing by succession from his
deceased wife, how can the second paragraph of article 10 be invoked? Can the appellee be heard to say
that there is a legal succession under the law of the Philippine Islands and no legal succession under the
law of California? It seems clear that the second paragraph of article 10 applies only when a legal or
testamentary succession has taken place in the Philippines and in accordance with the law of the
Philippine Islands; and the foreign law is consulted only in regard to the order of succession or the extent
of the successional rights; in other words, the second paragraph of article 10 can be invoked only when
the deceased was vested with a descendible interest in property within the jurisdiction of the Philippine
Islands;
o In accord with the rule that real property is subject to the lex rei sitae, the respective rights of husband and
wife in such property, in the absence of an antenuptial contract, are determined by the law of the place
where the property is situated, irrespective of the domicile of the parties or to the place where the
marriage was celebrated. Under this broad principle, the nature and extent of the title which vested in Mrs.
Gibbs at the time of the acquisition of the community lands here in question must be determined in
accordance with the lex rei sitae;
o It results that the wife of the appellee was, by the law of the Philippine Islands, vested of a descendible
interest, equal to that of her husband, in the Philippine lands covered by certificates of title Nos. 20880,
28336 and 28331, from the date of their acquisition to the date of her death. That appellee himself
believed that his wife was vested of such a title and interest in manifest from the second of said
certificates, No. 28336, dated May 14, 1927, introduced by him in evidence, in which it is certified that "the
spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple of the conjugal lands
therein described;
o The descendible interest of Eva Johnson Gibbs in the lands aforesaid was transmitted to her heirs by
virtue of inheritance and this transmission plainly falls within the language of section 1536 of Article XI of
Chapter 40 of the Administrative Code which levies a tax on inheritances. (Cf. Re Estate of Majot, 199 N.
Y., 29; 92 N. E., 402; 29 L. R. A. [N. S.], 780.) It is unnecessary in this proceeding to determine the "order
of succession" or the "extent of the successional rights" (article 10, Civil Code, supra) which would be
regulated by section 1386 of the Civil Code of California which was in effect at the time of the death of
Mrs. Gibbs;
(This case involves a dead U.S. citizen, resident therein, who made a will in the Philippines
with properties in the Philippines. Probate was instituted in the Philippines. The issue is
whether Philippine or Texas tax law would apply.) In this regard, the parties do not submit the case on,
nor even discuss, the doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January
31, 1963. Said doctrine is usually pertinent where the decedent is a national of one country, and a domicile of
another. In the present case, it is not disputed that the decedent was both a national of Texas and a domicile
thereof at the time of his death. 2 So that even assuming Texas has a conflict of law rule providing that the
domiciliary system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to
Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory
(lex rei sitae) calling for the application of the law of the place where the properties are situated, renvoi would
arise, since the properties here involved are found in the Philippines. In the absence, however, of proof as to the
conflict of law rule of Texas, it should not be presumed different from ours. 3 Appellants' position is therefore not
rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in their arguments. Rather,
they argue that their case falls under the circumstances mentioned in the third paragraph of Article 17 in
relation to Article 16 of the Civil Code; (Bellis v. Bellis)
o Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in
intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the
amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to
succeed;
o Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that
Prohibitive laws concerning persons, their acts or property, and those which have for their
object public order, public policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions agreed upon in a foreign country
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct;
It is therefore evident that whatever public policy or good customs may be involved in our System
of legitimes, Congress has not intended to extend the same to the succession of foreign
nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to
the decedent's national law. Specific provisions must prevail over general ones;
o Appellants would also point out that the decedent executed two wills one to govern his Texas estate
and the other his Philippine estate arguing from this that he intended Philippine law to govern his
Philippine estate. Assuming that such was the decedent's intention in executing a separate Philippine will,
it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigner's will to the effect that his properties shall be distributed in accordance with Philippine
law and not with his national law, is illegal and void, for his national law cannot be ignored in
regard to those matters that Article 10 now Article 16 of the Civil Code states said national
law should govern;
o The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A.,
and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the
intrinsic validity of the provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
E. Property
Article 1753
It is exceedingly strange why our top government officials, of all people, should be the ones to insist that in the sale of extremely valuable
government property, Japanese law and not Philippine law should prevail. The Japanese law - its coverage and effects, when enacted, and
exceptions to its provision is not presented to the Court It is simply asserted that the lex loci rei sitae or Japanese law should apply
without stating what that law provides. It is a ed on faith that Japanese law would allow the sale; (Laurel v. Garcia)
o We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises
only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a
conveyance, are to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land
ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which
law should apply;
o The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines.
The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply;
In passing, let it be noted that the registration of the said chattel mortgage in the office of the corporation was not
necessary and had no legal effect. (Monserrat vs. Ceron, 58 Phil., 469.) The long mooted question as to whether
or not shares of a corporation could be hypothecated by placing a chattel mortgage on the certificate representing
such shares we now regard as settled by the case of Monserrat vs. Ceron, supra; (Chua Guan v. Samahang
Magsasaka)
o It is a common but not accurate generalization that the situs of shares of stock is at the domicile of the
owner. The term situs is not one of fixed of invariable meaning or usage. Nor should we lose sight of the
difference between the situs of the shares and the situs of the certificates of shares. The situs of shares of
stock for some purposes may be at the domicile of the owner and for others at the domicile of the
corporation; and even elsewhere. (Cf. Vidal vs. South American Securities Co., 276 Fed., 855; Black
Eagle Min. Co. vs. Conroy, 94 Okla., 199; 221 Pac,, 425 Norrie vs. Kansas City Southern Ry. Co., 7 Fed.
[2d]. 158.) It is a general rule that for purposes of execution, attachment and garnishment, it is not the
domicile of the owner of a certificate but the domicile of the corporation which is decisive;
o By analogy with the foregoing and considering the ownership of shares in a corporation as property
distinct from the certificates which are merely the evidence of such ownership, it seems to us a
reasonable construction of section 4 of Act No. 1508 to hold that the property in the shares may be
deemed to be situated in the province in which the corporation has its principal office or place of
business. If this province is also the province of the owner's domicile, a single registration
sufficient. If not, the chattel mortgage should be registered both at the owner's domicile and in the
province where the corporation has its principal office or place of business. In this sense the property
mortgaged is not the certificate but the participation and share of the owner in the assets of the
corporation;
o Apart from the cumbersome and unusual method of hypothecating shares of stock by chattel mortgage, it
appears that in the present state of our law, the only safe way to accomplish the hypothecation of share of
stock of a Philippine corporation is for the creditor to insist on the assignment and delivery of the
certificate and to obtain the transfer of the legal title to him on the books of the corporation by the
cancellation of the certificate and the issuance of a new one to him. From the standpoint of the debtor this
may be unsatisfactory because it leaves the creditor as the ostensible owner of the shares and the debtor
is forced to rely upon the honesty and solvency of the creditor. Of course, the mere possession and
retention of the debtor's certificate by the creditor gives some security to the creditor against an attempted
voluntary transfer by the debtor, provided the by-laws of the corporation expressly enact that transfers
may be made only upon the surrender of the certificate;
In view of the premises, the attaching creditors are entitled to priority over the defectively
registered mortgage;
We need not belabor the doctrines of the foregoing cases. We believe, and so hold, that the issue here involved is
controlled by those doctrines. In the instant case, the actual situs of the shares of stock is in the Philippines, the
corporation being domiciled therein. And besides, the certificates of stock have remained in this country up to the
time when the deceased died in California, and they were in possession of one Syrena McKee, secretary of the
Benguet Consolidated Mining Company, to whom they have been delivered and indorsed in blank. This
indorsement gave Syrena McKee the right to vote the certificates at the general meetings of the stockholders, to
collect dividends, and dispose of the shares in the manner she may deem fit, without prejudice to her liability to
the owner for violation of instructions. For all practical purposes, then, Syrena McKee had the legal title to the
certificates of stock held in trust for the true owner thereof. In other words, the owner residing in California has
extended here her activities with respect to her intangibles so as to avail herself of the protection and benefit of
the Philippine laws. Accordingly, the jurisdiction of the Philippine Government to tax must be upheld; (Wells Fargo
v. CIR)
o There does not appear, a priori, to be anything contrary to the principles of international law, or hurtful to
the polity of nations, in a State's taxing property physically situated within its borders, wherever its owner
may have been domiciled at the time of his death;
o In Curry vs. McCanless, supra, the court, in deciding the question of whether the States of Alabama and
Tennessee may each constitutionally impose death taxes upon the transfer of an interest in intangibles
held in trust by an Alabama trustee but passing under the will of a beneficiary decedent domiciles in
Tennessee, sustained the power of each State to impose the tax;
But when the taxpayer extends his activities with respect to his intangibles, so as to avail himself
of the protection and benefit of the laws of another state, in such a way as to bring his person or
properly within the reach of the tax gatherer there, the reason for a single place of taxation no
longer obtains, and the rule even workable substitute for the reasons may exist in any particular
case to support the constitutional power of each state concerned to tax;
Whether we regard the right of a state to tax as founded on power over the object taxed, as
declared by Chief Justice Marshall in McCulloch vs. Maryland, 4 Wheat., 316; 4 Law. ed., 579,
supra, through dominion over tangibles or over persons whose relationships are source of
intangibles rights, or on the benefit and protection conferred by the taxing sovereignty, or both, it
is undeniable that the state of domicile is not deprived, by the taxpayer's activities elsewhere, of
its constitutional jurisdiction to tax, and consequently that there are many circumstances in which
more than one state may have jurisdiction to impose a tax and measure it by some or all of the
taxpayer's intangibles;
o Shares or corporate stock be taxed at the domicile of the shareholder and also at that of the corporation
which the taxing state has created and controls; and income may be taxed both by the state where it is
earned and by the state of the recipient's domicile. protection, benefit, and power over the subject matter
are not confined to either state;
The question raised by appellants regarding the situs of the properties in question, has no merit in view of the
express provisions of section 1536 of the Revised Administrative Code, specifying shares issued by any
corporation or sociedad anonima organized in the Philippines among properties subject to inheritance tax. The
pronouncement of the lower court that the actual situs of the shares in question is in the Philippines is fully
supported by the evidence as, according to the testimony of John W. Haussermann, the corresponding certificates
of stock were in the Philippines before and after the death of Mrs. Beam, the owners were represented by proxy at
the stockholders' meetings and their shares voted by their attorney in fact who had the power to collect dividends
corresponding to the share; (Beam v. Yatco)
The pivotal issue in these consolidated cases is the determination of which laws govern loss or destruction of goods due to collision of vessels outside
Philippine waters, and the extent of liability as well as the rules of prescription provided thereunder; (National Development Company v. CA)
o This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. v. IAC (1 50 SCRA 469-470 [1987]) where it was held
under similar circumstance "that the law of the country to which the goods are to be transported governs the liability of the common carrier in
case of their loss, destruction or deterioration" (Article 1753, Civil Code). Thus, the rule was specifically laid down that for cargoes
transported from Japan to the Philippines, the liability of the carrier is governed primarily by the Civil Code and in all matters not regulated by
said Code, the rights and obligations of common carrier shall be governed by the Code of commerce and by laws (Article 1766, Civil Code).
Hence, the Carriage of Goods by Sea Act, a special law, is merely suppletory to the provision of the Civil Code;
o In the case at bar, it has been established that the goods in question are transported from San Francisco, California and Tokyo, Japan to the
Philippines and that they were lost or due to a collision which was found to have been caused by the negligence or fault of both captains of
the colliding vessels. Under the above ruling, it is evident that the laws of the Philippines will apply, and it is immaterial that the collision
actually occurred in foreign waters, such as Ise Bay, Japan;
o There is, therefore, no room for NDC's interpretation that the Code of Commerce should apply only to domestic trade and not to foreign
trade. Aside from the fact that the Carriage of Goods by Sea Act (Com. Act No. 65) does not specifically provide for the subject of collision,
said Act in no uncertain terms, restricts its application "to all contracts for the carriage of goods by sea to and from Philippine ports in foreign
trade." Under Section I thereof, it is explicitly provided that "nothing in this Act shall be construed as repealing any existing provision of the
Code of Commerce which is now in force, or as limiting its application." By such incorporation, it is obvious that said law not only recognizes
the existence of the Code of Commerce, but more importantly does not repeal nor limit its application.
F. Contracts
Article 1306
Warsaw Convention
The defendant alleged in his special defense that he was a minor and therefore the contract could not be enforced
against him. The record discloses that, at the time the contract was entered into in the State of Illinois, he was an
adult under the laws of that State and had full authority to contract. The plaintiff [the defendant] claims that, by
reason of the fact that, under the laws of the Philippine Islands at the time the contract was made, male persons in
said Islands did not reach their majority until they had attained the age of 23 years, he was not liable under said
contract, contending that the laws of the Philippine Islands governed. It is not disputed upon the contrary the
fact is admitted that at the time and place of the making of the contract in question the defendant had full
capacity to make the same. No rule is better settled in law than that matters bearing upon the execution,
interpretation and validity of a contract are determined by the law of the place where the contract is made.
(Scudder vs. Union National Bank, 91 U. S., 406.) Matters connected with its performance are regulated by the
law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit, admissibility
of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought; (Government
v. Frank)
o The defendant's claim that he was an adult when he left Chicago but was a minor when he arrived at
Manila; that he was an adult at the time he made the contract but was a minor at the time the plaintiff
attempted to enforce the contract, more than a year later, is not tenable;
(This is the case involving the differing prescriptive periods and the borrowing statute.)The parties to a contract may select the law by which it is to be
governed (Cheshire, Private International Law, 187 [7th ed.]). In such a case, the foreign law is adopted as a "system" to regulate the relations of the
parties, including questions of their capacity to enter into the contract, the formalities to be observed by them, matters of performance, and so forth.
Instead of adopting the entire mass of the foreign law, the parties may just agree that specific provisions of a foreign statute shall be deemed
incorporated into their contract "as a set of terms." By such reference to the provisions of the foreign law, the contract does not become a foreign
contract to be governed by the foreign law. The said law does not operate as a statute but as a set of contractual terms deemed written in the contract;
(Cadalin v. POEA)
o A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by giving effect to the parties' own
choice of the applicable law. The choice of law must, however, bear some relationship to the parties or their transaction. There is no question
that the contracts sought to be enforced by claimants have a direct connection with the Bahrain law because the services were rendered in
that country;

Conflict of Laws - Doctrines and Concepts

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Conflict of Laws Atty.

Ricardo Jun Pilares - RC

VI. Resolution of Conflicts Problems; General Framework

ii. Considerations of Public Policy

iii. Doctrine of Processual Presumption

VII. Some Domestic Sources of Conflicts of Law Rules

b. Special Rules on Libel Suits (R.A. 4393)

III. Rules on Jurisdiction

c. Service of Summons as Requirement of Procedural Due Process

1. Governing Law lex fori

IV. Foreign Corporations

Specific Areas of Discussion on Choice of Law Issues

A. Personal Status, Legal Personality and Capacity

B. Nationality, Residence and Domicile

Civil Code Article 15

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