Section 7.

Save in cases of hereditary succession, no private lands shall be transferred or

conveyed except to individuals, corporations, or associations qualified to acquire or hold lands
of the public domain. (Sec 7, Art XII, 1987 Constitution)

Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen

of the Philippines who has lost his Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law. (Sec 8, Article XII, 1987 Constitution)

Sec. 5. The Foreign Investments Act is further amended by inserting a new section
designated as Section 10 to read as follows:

"Sec. 10. Other Rights of Natural Born Citizen Pursuant to the Provisions of Article XII, Sec. 8
of the Constitution. – Any natural born citizen who has the legal capacity to enter into a
contract under Philippine laws may be a transferee of a private land up to a maximum area of
five thousand (5,000) square meters in the case of urban land or three (3) hectares in the
case of rural land to be used by him for business or other purposes. In the case of married
couples, one of them may avail of the privilege herein granted: provided, that if both shall
avail of the same, the total area acquired shall not exceed the maximum herein fixed.

"In case the transferee already owns urban or rural land for business or other purposes, he
shall still be entitled to be a transferee of additional urban or rural land for business or other
purposes which when added to those already owned by him shall not exceed the maximum
areas herein authorized.

"A transferee under this Act may acquire not more than two (2) lots which should be situated
in different municipalities or cities anywhere in the Philippines: provided, that the total land
area thereof shall not exceed five thousand (5,000) hectares in the case of rural land for use
by him for business or other purposes. A transferee who has already acquired urban land
shall be disqualified from acquiring rural land area and vice versa." (Sec 5, RA 8179 or
Foreign Investments Act)

RA 9225.

Sarsosa v. Cuenco, 1982

Vasquez vs Giap

FACTS: The plaintiff, Socorro Vasquez, sold to the defendant Li Seng Giap, Chinese citizen,
for the sum of P14,500, a parcel of land together with a house of strong materials existing
thereon. Defendant Li Seng Giap sold and transferred unto defendant Li Seng Giap & Sons,
Inc., a corporation duly organized and existing under and by virtue of the laws of the
Philippines, with principal office in the City of Manila, Philippines, whose shareholdings then
were owned by Chinese citizens, for the same sum of P14,500.

Later, defendant Li Seng Giap was duly naturalized as a Filipino citizen together with the
other Chinese shareholders of the said corporation. Li Seng Giap & Sons, Inc., is now a
Filipino corporation, 96.67 per cent of its stock being owned by Filipinos, and duly authorized
by its articles of incorporation to own, acquire or dispose of real properties.
Plaintiff filed an action for the rescission of the said sale on the ground that at the time of the
sale the vendee was an alien and under the Constitution incapable to own and hold title to
lands.

ISSUE: Whether or not the sale to the alien is valid.

RULING: Yes. Only the State that is entitled by proceedings in the nature of office found to
have a forfeiture or escheat declared against the vendee who is incapable of holding title to
the real estate sold and conveyed to him. However, if the State does not commence such
proceedings and in the meantime the alien becomes naturalized citizen the State is deemed
to have waived its right to escheat the real property and the title of the alien thereto
becomes lawful and valid as of the date of its conveyance or transfer to him.

The Rule in the United States that in a sale of real estate to an alien disqualified to hold title
thereto, the vendor divests himself of the title to such real estate and is not permitted to sue
for the annulment of his contract, is also the rule under the Civil Code.

The ban on aliens from acquiring not only agricultural but also urban lands, as construed by
this Court, is to preserve the nation's lands for future generations of Filipinos, that aim or
purpose would not be thwarted but achieved by making lawful the acquisition of real estate
by aliens who became Filipino citizens by naturalization. The title to the parcel of land of the
vendee, a naturalized Filipino citizen, being valid that of the domestic corporation to which
the parcel of land has been transferred, must also be valid, 96.67 per cent of its capital stock
being owned by Filipinos.

Holy See v. Rosario, Jr., 1994

FACTS: This petition arose from a controversy over a parcel of land consisting of 6,000
square meters located in the Municipality of Paranaque. Said lot was contiguous with two
other lots. These lots were sold to Ramon Licup. In view of the refusal of the squatters to
vacate the lots sold, a dispute arose as to who of the parties has the responsibility of evicting
and clearing the land of squatters. Complicating the relations of the parties was the sale by
petitioner of the lot of concern to Tropicana.

ISSUE: Whether the Holy See is immune from suit insofar as its business relations regarding
selling a lot to a private entity.

RULING: The Holy See is immune from suit for the act of selling the lot of concern is non-
proprietary in nature. The lot was acquired by petitioner as a donation from the Archdiocese
of Manila. The donation was made not for commercial purpose, but for the use of petitioner
to construct thereon the official place of residence of the Papal Nuncio. The decision to
transfer the property and the subsequent disposal thereof are likewise clothed with a
governmental character. Petitioner did not sell the lot for profit or gain. It merely wanted to
dispose of the same because the squatters living thereon made it almost impossible for
petitioner to use it for the purpose of the donation.

6. Property situated in another country

Question: May Phil courts still be called to distinguish between real and personal property?

Laurel v. Garcia, 1990

Facts: Petitioners seek to stop the Philippine Government to sell the Roppongi Property,
which is located in Japan. It is one of the properties given by the Japanese Government as
reparations for damage done by the latter to the former during the war.

Petitioner argues that under Philippine Law, the subject property is property of public
dominion. As such, it is outside the commerce of men. Therefore, it cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because
the property is located in Japan. They posit that the principle of lex situs applies.

Issues: WON Philippine Law applies to the case at bar.

Ruling: Yes.

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.

In the instant case, none of the above elements exists.

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.

5. Situs of Certain Properties

2 Classes of Movables
i. Choses in possession - tangible physical objects
ii. Choses in action - also called as intangible property (e.g. debts, patents, copyright,
goodwill, trade marks and trade names, and shares of stock.)

Trademark – is the name or symbols of goods made or manufactured ex. Guess

Trade name – the name or symbol of the store or business place ex. Rustan’s
Service mark – the name or symbol of services rendered ex. Federal Express
Copyright – the right of literary property as recognized and sanctioned by positive law.

Kinds of choses in action

i. Debts or simple rights of action arising from loans or ordinary commercial contracts
ii. Negotiable instruments
iii. Corporate stocks or shares

Intangible Personal Property

(Choses in Action)
Debts Voluntary transfer of i. Personal law of the
assignment of choses in parties
action ii. Law of the place of
execution of assignment
iii. Law of the place where
debt is recoverable
Involuntary transfer of Law of the state where
choses in action (e.g. debtor may be served
garnishment) summons
Debt for taxation purposes Domicile of the creditor
where the collectible credit
may be taxed
Administration of debts Where the assets of the
debtor are usually situated
Negotiable instruments Negotiability or non- Law governing the rights
negotiability of an instrument embodied in the instrument
Validity of transfer, delivery In general, situs of the
or negotiation of the instrument at the time of
instrument transfer, delivery o
Corporate stocks or shares Effect on a corporation of the Law of the place
sale of corporate shares incorporation
 Effect between the parties of Lex loci voluntatis or lex loci
the sale of corporate shares intentionis (proper law of the
contract) – for this is really a
contract; usually this is the
place where the certificate is
delivered
Taxation on the dividends of Law of the place of
corporate shares incorporation
Taxation on the income from Law of the place where the
the sale of corporate shares sale was consummated
Franchises Law of the place that granted
them
Goodwill of the business & Law of the place where the
taxation thereto business is carried on
Patents, copyrights, In the absence of a treaty,
trademarks, trade names they are protected only by
the State that granted them

NOTE: foreigners may sue

for infringement of
trademarks and trade names
in the RP ONLY IF Filipinos
are granted reciprocal
concessions in the State of
the foreigners

Tangible Personal Property

(Choses in Possession)

General rule: lex rei sitae

Exceptions: same as the rules on real property
Means of transportation Vessels Law of the flag
Other means Law of the depot
Things in transit Loss, destruction, Law of the destination (Civil
deterioration Code, Art 1753)
Validity & effect of the Locus regit actum (where
seizure of the goods seized) – because said place
is their temporary situs
Disposition of goods The owner is permitted to
choose among several legal
systems:
iv. Law of the temporary
resting place
v. Lex loci actus
vi. Law of the place of
destination
vii. Law of the last real situs
of goods

6. 2 kinds of movables, 2 kinds of choses in action

a. Movable property

ASIATIC PETROLEUM V. CO QUICO 69 Phil 433 (1940)

FACTS : Co Quico entered into a contract of agency with Asiatic by virtue of which the former
became the sales agent on commission of the latter. Respondent was in default in the sum of
P2,213 and without rendering account to Asiatic left for China. Asiatic filed a complaint and
after summons by publication Co Quico was decalred in default and thereafter Co’s deposit in
the Bank was levied. Co’s counsel moved to declare the proceedings as null and void on the
ground that the court never acquired jurisdiction over the person of the respondent because
the action is one in personam against a non-resident who was summoned by publication and
did not appear.

ISSUE : Whether or not the court acquired jurisdiction over the person of the defendant.

HELD : Yes. Although respondent was outside the Philippines at the time the action was
instituted, he possessed property found and located here in the Philippines and such property
was within the reach of our courts. It is well emphasized in this connection that all property
within the state is subject to the jurisdiction of its courts and they have the right to
adjudicate title thereto, to enforce liens therupon and to subject it to the payment of the
debts of its owners, whether resident or not.

b. Situs of money -

Leon v. Manulife, 1951:

c. Situs of Debts –

Harris vs Balk
Ratio: It ought to be and it is the object of courts to prevent the payment of any debt twice
over.

FACTS: A citizen of North Carolina owed money to another citizen of that State. While
temporarily in Maryland, however, the debtor got garnished by a creditor of his creditor
(garnishee). Judgment was duly entered according to Maryland practice and paid. Thereafter
the debtor was sued in North Carolina by the creditor and as a defense, showed the
judgment and payment made in Maryland. Nevertheless, North Carolina courts held that as
the situs of the debt was in North Carolina the Maryland judgment was not a bar and
awarded judgment against him. The United States Court of Appeals reversed. The Supreme
Court of North Carolina, on the other hand, reversed the decision, which refused to give full
faith and credit to a Maryland judgment. The case was elevated to the Supreme Court of the
United States.

ISSUE: Should the Maryland judgment be recognized in North Carolina courts?

RULING: Yes. The Court held that the garnishee's debt owed to the creditor in Maryland
followed the garnishee everywhere. Since Maryland had a law that would allow the Maryland
creditor to pursue the debt owed by the garnishee to it, debtor could attach the debt owed
by the garnishee to the creditor, even though the garnishee was not a Maryland resident. The
garnishee's failure to notify defendant of attachment was not prejudicial because defendant
had the opportunity to show that he did not owe a debt to plaintiff. Moreover, the court also
reminded that it is the object of courts to prevent the payment of any debt twice over.

d. Intangible properties

Lim v. CA, 1995

Facts: Manuel Lim and Rosita Lim are the officers of the Rigi Bilt Industries, Inc. (RIGI). RIGI
had been transacting business with Linton Commercial Company, Inc. The Lims ordered 100
pieces of mild steel plates from Linton and were delivered to the Lim’s place of business
which was in Caloocan. To pay Linton, the Lims issued a postdated check for P51,800.00. On
a different date, the Lims also ordered another 65 pcs of mild steel plates and were delivered
in the place of business. They again issued another postdated check. On that same day, they
also ordered purlins worth P241,800 which were delivered to them on various dates. The
Lims issued 7 checks for this.

When the 7 checks were presented to the drawee bank (Solidbank), it was dishonored
because payment for the checks had been stopped and/or insufficiency of funds. So the Lims
were charged with 7 counts of violation of Bouncing Checks Law.

The Malabon trial court held that the Lims were guilty of estafa and violation of BP 22. They
went to CA on appeal.

The CA acquitted the Lims of estafa, on the ground that the checks were not made in
payment of an obligation contracted at the time of their issuance. However, the CA affirmed
the finding that they were guilty of violation for BP 22. Motion for Reconsideration to SC.

Issue: Whether or not the issue was within the jurisdiction of the Malabon Trial Court

Held: Yes. The venue of jurisdiction lies either in the RTC Caloocan or Malabon Trial Court.

BP 22 is a continuing crime. A person charged with a transitory crime may be validly tried in
any municipality or territory where the offense was partly committed. In determining the
proper venue, the ff. must be considered. 1) 7 checks were issued to Linton in its place of
business in Navotas. 2) The checks were delivered Linton in the same place. 3) The checks
were dishonored in Caloocan 4) The Lims had knowledge of their insufficiency of funds.

Under sec 191 of the Negotiable Instruments Law:

ISSUE = 1ST delivery of the instrument complete in form to a person who takes it as a holder
HOLDER = payee or indorsee of a bill/note who is in possession of it or the bearer

The place where the bills were written, signed or dated does not necessarily fix or determine
the place where they were executed. It is the delivery that is important. It is the final act
essential to its consummation of an obligation. An undelivered bill is unoperative. The
issuance and delivery of the check must be to a person who takes it as a holder.
Although Linton sent a collector who received the checks fr. The Lims at their place of
business, the checks were actually issued and delivered to Linton in Navotas. The collector is
not a holder or an agent, he was just an employee.

e. Situs of Shares of Stock

CIR V. ANGLO CALIFORNIA NATIONAL BANK 106 Phil 903

FACTS : Respondent Calamba Sugar Estate Inc. (CSEI), represented by its trustee, the Anglo
Cal. Nat’l Bank is a foreign corporation organized under the laws of California, duly licensed to
do business in the Phils. Petitoner notified CSEI of an assessment for an alleged deficiency
income taxes. Based on the allegation that the sale of its shares of stocks was perfected and
payment took place in USA and that the sale was made in accordance with the laws of USA,
the CTA absolved CSEI from liability on the ground that the capital gains which constituted
income were derived from abroad and not subject to income tax. Petitioner appealed
contending that the situs of shares of stock of corporation is considered to be at the domicile
of the latter.

ISSUE : WON the situs of the corporate shares of stock is within the Philippines

HELD : No. Shares of stock of corporation are considered as intangible personal properties.
Sec. 24 of NIRC levies income taxes on foreign corporations only on income derived from
sources within the Philippines and with respect to capital gains on the sale of personal
properties. Sec 37 (e) of NIRC deems the place of the sale as also that place or source of
capital gain. Moreover, income derived from sale abroad is not taxable here in the Phils. Only
income within the Philippines are taxable.
 TAYAG v. BENGUET CONSOLIDATED INC. 26 SCRA 242
FACTS : Perkins died leaving two stock certificates in the Benguet Consolidated Inc., a Phil.
Corporation. The certificates were in possession of Country Trust Co. of New York, which was
the domiciliary adminstrator of the estate of the deceased. Meanwhile, anciliary
administration proceedings in the CFI of Manial were instituted and the court appointed
Lazaro Marquez as anciliary administrator, wo was substituted by Renato Tayag. A dispute
arose between the domiciliary and anciliary administratoes as to which of them was entitled
to the possession of the stock certificates. The CFI ordered the domiciliary administrator to
produce and deposit the certificates with Tayag or with the Cerk of Court, but the former did
not comply with the said order. Tayag petitioned the Court to issued an order declaring the
stocks certificates as lost, which the court granted. Hence, this appeal by the oppositor
Benguet Consolidated Inc.

ISSUE : Whether or not ancillary administrator is entitled to the possession of the stock
certificates

HELD : Yes. The ancillary administration is proper, whenever a person dies, leaving in a
country other than that of is last domicile, property to be administered in the nature of assets
of the deceased liable for his individual debts or to be distributed among his heirs. It would
follow then that the authority of the probate court to require that anciliary administrato’s right
to the stock certificates…standing in her name in the books of appellant-Benguet
Consolidated Inc., be respected is equally beyond question. For appellant is a Phil.
Corporation owing full allegiance and subject to the unrestricted jurisdiction of the local
courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful
court orders.