G.R. No.

L-16749

January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN,

DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the
deceased, Executor and Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
LABRADOR, J.:
This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N.
Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14,
1949, approving among things the final accounts of the executor, directing the executor
to reimburse Maria Lucy Christensen the amount of P3,600 paid by her to Helen
Christensen Garcia as her legacy, and declaring Maria Lucy Christensen entitled to the
residue of the property to be enjoyed during her lifetime, and in case of death without
issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in
accordance with the provisions of the will of the testator Edward E. Christensen. The will
was executed in Manila on March 5, 1951 and contains the following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines
about twenty-eight years ago, and who is now residing at No. 665 Rodger Young
Village, Los Angeles, California, U.S.A.
4. I further declare that I now have no living ascendants, and no descendants
except my above named daughter, MARIA LUCY CHRISTENSEN DANEY.
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7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now

married to Eduardo Garcia, about eighteen years of age and who,
notwithstanding the fact that she was baptized Christensen, is not in any way
related to me, nor has she been at any time adopted by me, and who, from all

information I have now resides in Egpit, Digos, Davao, Philippines, the sum of
THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine Currency
the same to be deposited in trust for the said Maria Helen Christensen with the
Davao Branch of the Philippine National Bank, and paid to her at the rate of One
Hundred Pesos (P100.00), Philippine Currency per month until the principal
thereof as well as any interest which may have accrued thereon, is exhausted..
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12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said
MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as
aforesaid at No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all
the income from the rest, remainder, and residue of my property and estate, real,
personal and/or mixed, of whatsoever kind or character, and wheresoever
situated, of which I may be possessed at my death and which may have come to
me from any source whatsoever, during her lifetime: ....
It is in accordance with the above-quoted provisions that the executor in his final account
and project of partition ratified the payment of only P3,600 to Helen Christensen Garcia
and proposed that the residue of the estate be transferred to his daughter, Maria Lucy
Christensen.
Opposition to the approval of the project of partition was filed by Helen Christensen
Garcia, insofar as it deprives her (Helen) of her legitime as an acknowledged natural
child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural
child of the deceased Edward E. Christensen. The legal grounds of opposition are (a)
that the distribution should be governed by the laws of the Philippines, and (b) that said
order of distribution is contrary thereto insofar as it denies to Helen Christensen, one of
two acknowledged natural children, one-half of the estate in full ownership. In
amplification of the above grounds it was alleged that the law that should govern the
estate of the deceased Christensen should not be the internal law of California alone, but
the entire law thereof because several foreign elements are involved, that the forum is
the Philippines and even if the case were decided in California, Section 946 of the
California Civil Code, which requires that the domicile of the decedent should apply,
should be applicable. It was also alleged that Maria Helen Christensen having been
declared an acknowledged natural child of the decedent, she is deemed for all purposes
legitimate from the time of her birth.

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

V
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE
LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE
ESTATE IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of the United States and
of the State of California at the time of his death. But there is also no question that at the
time of his death he was domiciled in the Philippines, as witness the following facts
admitted by the executor himself in appellee's brief:

The most important assignments of error are as follows:

I
THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE
SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF
EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER
JUST SHARE IN THE INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO
RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND
CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER
INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE
INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSEN
SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF
DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE
PHILIPPINE LAWS.

In the proceedings for admission of the will to probate, the facts of record show
that the deceased Edward E. Christensen was born on November 29, 1875 in
New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an appointed
school teacher, was on July 1, 1901, on board the U.S. Army Transport
"Sheridan" with Port of Embarkation as the City of San Francisco, in the State of
California, U.S.A. He stayed in the Philippines until 1904.
In December, 1904, Mr. Christensen returned to the United States and stayed
there for the following nine years until 1913, during which time he resided in, and
was teaching school in Sacramento, California.
Mr. Christensen's next arrival in the Philippines was in July of the year 1913.
However, in 1928, he again departed the Philippines for the United States and
came back here the following year, 1929. Some nine years later, in 1938, he
again returned to his own country, and came back to the Philippines the following
year, 1939.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
admitted and approved by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered by this stipulation of
facts.
1wph1.t

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

Military Forces in the Philippines during World War II. Upon liberation, in April
1945, he left for the United States but returned to the Philippines in December,
1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits

"AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473,
t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to California shortly
after the making of his last will and testament (now in question herein) which he
executed at his lawyers' offices in Manila on March 5, 1951. He died at the St.
Luke's Hospital in the City of Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased is the Philippines, we are
persuaded by the fact that he was born in New York, migrated to California and resided
there for nine years, and since he came to the Philippines in 1913 he returned to
California very rarely and only for short visits (perhaps to relatives), and considering that
he appears never to have owned or acquired a home or properties in that state, which
would indicate that he would ultimately abandon the Philippines and make home in the
State of California.
Sec. 16. Residence is a term used with many shades of meaning from mere
temporary presence to the most permanent abode. Generally, however, it is used
to denote something more than mere physical presence. (Goodrich on Conflict of
Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he acquired in California
when he resided in Sacramento, California from 1904 to 1913, was never lost by his stay
in the Philippines, for the latter was a territory of the United States (not a state) until 1946
and the deceased appears to have considered himself as a citizen of California by the
fact that when he executed his will in 1951 he declared that he was a citizen of that
State; so that he appears never to have intended to abandon his California citizenship by
acquiring another. This conclusion is in accordance with the following principle
expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to mean the same
thing, a place of permanent abode. But domicile, as has been shown, has
acquired a technical meaning. Thus one may be domiciled in a place where he
has never been. And he may reside in a place where he has no domicile. The
man with two homes, between which he divides his time, certainly resides in
each one, while living in it. But if he went on business which would require his
presence for several weeks or months, he might properly be said to have
sufficient connection with the place to be called a resident. It is clear, however,

that, if he treated his settlement as continuing only for the particular business in
hand, not giving up his former "home," he could not be a domiciled New Yorker.
Acquisition of a domicile of choice requires the exercise of intention as well as
physical presence. "Residence simply requires bodily presence of an inhabitant
in a given place, while domicile requires bodily presence in that place and also
an intention to make it one's domicile." Residence, however, is a term used with
many shades of meaning, from the merest temporary presence to the most
permanent abode, and it is not safe to insist that any one use et the only proper
one. (Goodrich, p. 29)
The law that governs the validity of his testamentary dispositions is defined in Article 16
of the Civil Code of the Philippines, which is as follows:
ART. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary successions, both with respect to the order
of succession and to the amount of successional rights and to the intrinsic validity
of testamentary provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the nature of the
property and regardless of the country where said property may be found.
The application of this article in the case at bar requires the determination of the meaning
of the term "national law" is used therein.
There is no single American law governing the validity of testamentary provisions in the
United States, each state of the Union having its own private law applicable to its citizens
only and in force only within the state. The "national law" indicated in Article 16 of the
Civil Code above quoted can not, therefore, possibly mean or apply to any general
American law. So it can refer to no other than the private law of the State of California.
The next question is: What is the law in California governing the disposition of personal
property? The decision of the court below, sustains the contention of the executorappellee that under the California Probate Code, a testator may dispose of his property
by will in the form and manner he desires, citing the case of Estate of McDaniel, 77 Cal.
Appl. 2d 877, 176 P. 2d 952. But appellant invokes the provisions of Article 946 of the
Civil Code of California, which is as follows:

If there is no law to the contrary, in the place where personal property is situated,
it is deemed to follow the person of its owner, and is governed by the law of his
domicile.
The existence of this provision is alleged in appellant's opposition and is not denied. We
have checked it in the California Civil Code and it is there. Appellee, on the other hand,
relies on the case cited in the decision and testified to by a witness. (Only the case of
Kaufman is correctly cited.) It is argued on executor's behalf that as the deceased
Christensen was a citizen of the State of California, the internal law thereof, which is that
given in the abovecited case, should govern the determination of the validity of the
testamentary provisions of Christensen's will, such law being in force in the State of
California of which Christensen was a citizen. Appellant, on the other hand, insists that
Article 946 should be applicable, and in accordance therewith and following the doctrine
of the renvoi, the question of the validity of the testamentary provision in question should
be referred back to the law of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various authors, thus:
The problem has been stated in this way: "When the Conflict of Laws rule of the
forum refers a jural matter to a foreign law for decision, is the reference to the
purely internal rules of law of the foreign system; i.e., to the totality of the foreign
law minus its Conflict of Laws rules?"
On logic, the solution is not an easy one. The Michigan court chose to accept the
renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the
matter back to Michigan law. But once having determined the the Conflict of
Laws principle is the rule looked to, it is difficult to see why the reference back
should not have been to Michigan Conflict of Laws. This would have resulted in
the "endless chain of references" which has so often been criticized be legal
writers. The opponents of the renvoi would have looked merely to the internal law
of Illinois, thus rejecting the renvoi or the reference back. Yet there seems no
compelling logical reason why the original reference should be the internal law
rather than to the Conflict of Laws rule. It is true that such a solution avoids going
on a merry-go-round, but those who have accepted the renvoi theory avoid
this inextricabilis circulas by getting off at the second reference and at that point
applying internal law. Perhaps the opponents of the renvoi are a bit more
consistent for they look always to internal law as the rule of reference.

Strangely enough, both the advocates for and the objectors to the renvoi plead
that greater uniformity will result from adoption of their respective views. And still
more strange is the fact that the only way to achieve uniformity in this choice-oflaw problem is if in the dispute the two states whose laws form the legal basis of
the litigation disagree as to whether the renvoi should be accepted. If both reject,
or both accept the doctrine, the result of the litigation will vary with the choice of
the forum. In the case stated above, had the Michigan court rejected the renvoi,
judgment would have been against the woman; if the suit had been brought in
the Illinois courts, and they too rejected the renvoi, judgment would be for the
woman. The same result would happen, though the courts would switch with
respect to which would hold liability, if both courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances: where the title to
land is in question, and where the validity of a decree of divorce is challenged. In
these cases the Conflict of Laws rule of the situs of the land, or the domicile of
the parties in the divorce case, is applied by the forum, but any further reference
goes only to the internal law. Thus, a person's title to land, recognized by the
situs, will be recognized by every court; and every divorce, valid by the domicile
of the parties, will be valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp.
13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving
movable property in Massachusetts, England, and France. The question arises
as to how this property is to be distributed among X's next of kin.
Assume (1) that this question arises in a Massachusetts court. There the rule of
the conflict of laws as to intestate succession to movables calls for an application
of the law of the deceased's last domicile. Since by hypothesis X's last domicile
was France, the natural thing for the Massachusetts court to do would be to turn
to French statute of distributions, or whatever corresponds thereto in French law,
and decree a distribution accordingly. An examination of French law, however,
would show that if a French court were called upon to determine how this
property should be distributed, it would refer the distribution to the national law of
the deceased, thus applying the Massachusetts statute of distributions. So on the
surface of things the Massachusetts court has open to it alternative course of
action: (a) either to apply the French law is to intestate succession, or (b) to
resolve itself into a French court and apply the Massachusetts statute of
distributions, on the assumption that this is what a French court would do. If it

accepts the so-called renvoi doctrine, it will follow the latter course, thus applying
its own law.
This is one type of renvoi. A jural matter is presented which the conflict-of-laws
rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn,
refers the matter back again to the law of the forum. This is renvoi in the
narrower sense. The German term for this judicial process is 'Ruckverweisung.'"
(Harvard Law Review, Vol. 31, pp. 523-571.)
After a decision has been arrived at that a foreign law is to be resorted to as
governing a particular case, the further question may arise: Are the rules as to
the conflict of laws contained in such foreign law also to be resorted to? This is a
question which, while it has been considered by the courts in but a few instances,
has been the subject of frequent discussion by textwriters and essayists; and the
doctrine involved has been descriptively designated by them as the "Renvoyer"
to send back, or the "Ruchversweisung", or the "Weiterverweisung", since an
affirmative answer to the question postulated and the operation of the adoption of
the foreign law in toto would in many cases result in returning the main
controversy to be decided according to the law of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been advanced. The
theory of the doctrine of renvoi is that the court of the forum, in determining the
question before it, must take into account the whole law of the other jurisdiction,
but also its rules as to conflict of laws, and then apply the law to the actual
question which the rules of the other jurisdiction prescribe. This may be the law
of the forum. The doctrine of the renvoi has generally been repudiated by the
American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined and the reasons for its
application in a country explained by Prof. Lorenzen in an article in the Yale Law Journal,
Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article are quoted herein
below:
The recognition of the renvoi theory implies that the rules of the conflict of laws
are to be understood as incorporating not only the ordinary or internal law of the
foreign state or country, but its rules of the conflict of laws as well. According to
this theory 'the law of a country' means the whole of its law.

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Von Bar presented his views at the meeting of the Institute of International Law,
at Neuchatel, in 1900, in the form of the following theses:
(1) Every court shall observe the law of its country as regards the application of
foreign laws.
(2) Provided that no express provision to the contrary exists, the court shall
respect:
(a) The provisions of a foreign law which disclaims the right to bind its
nationals abroad as regards their personal statute, and desires that said
personal statute shall be determined by the law of the domicile, or even
by the law of the place where the act in question occurred.
(b) The decision of two or more foreign systems of law, provided it be
certain that one of them is necessarily competent, which agree in
attributing the determination of a question to the same system of law.
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If, for example, the English law directs its judge to distribute the personal estate
of an Englishman who has died domiciled in Belgium in accordance with the law
of his domicile, he must first inquire whether the law of Belgium would distribute
personal property upon death in accordance with the law of domicile, and if he
finds that the Belgian law would make the distribution in accordance with the law
of nationality that is the English law he must accept this reference back to
his own law.
We note that Article 946 of the California Civil Code is its conflict of laws rule, while the
rule applied in In re Kaufman, Supra, its internal law. If the law on succession and the
conflict of laws rules of California are to be enforced jointly, each in its own intended and
appropriate sphere, the principle cited In re Kaufman should apply to citizens living in the
State, but Article 946 should apply to such of its citizens as are not domiciled in California
but in other jurisdictions. The rule laid down of resorting to the law of the domicile in the
determination of matters with foreign element involved is in accord with the general

principle of American law that the domiciliary law should govern in most matters or rights
which follow the person of the owner.
When a man dies leaving personal property in one or more states, and leaves a
will directing the manner of distribution of the property, the law of the state where
he was domiciled at the time of his death will be looked to in deciding legal
questions about the will, almost as completely as the law of situs is consulted in
questions about the devise of land. It is logical that, since the domiciliary rules
control devolution of the personal estate in case of intestate succession, the
same rules should determine the validity of an attempted testamentary dispostion
of the property. Here, also, it is not that the domiciliary has effect beyond the
borders of the domiciliary state. The rules of the domicile are recognized as
controlling by the Conflict of Laws rules at the situs property, and the reason for
the recognition as in the case of intestate succession, is the general convenience
of the doctrine. The New York court has said on the point: 'The general principle
that a dispostiton of a personal property, valid at the domicile of the owner, is
valid anywhere, is one of the universal application. It had its origin in that
international comity which was one of the first fruits of civilization, and it this age,
when business intercourse and the process of accumulating property take but
little notice of boundary lines, the practical wisdom and justice of the rule is more
apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)
Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as
the national law is the internal law of California. But as above explained the laws of
California have prescribed two sets of laws for its citizens, one for residents therein and
another for those domiciled in other jurisdictions. Reason demands that We should
enforce the California internal law prescribed for its citizens residing therein, and enforce
the conflict of laws rules for the citizens domiciled abroad. If we must enforce the law of
California as in comity we are bound to go, as so declared in Article 16 of our Civil Code,
then we must enforce the law of California in accordance with the express mandate
thereof and as above explained, i.e., apply the internal law for residents therein, and its
conflict-of-laws rule for those domiciled abroad.
It is argued on appellees' behalf that the clause "if there is no law to the contrary in the
place where the property is situated" in Sec. 946 of the California Civil Code refers to
Article 16 of the Civil Code of the Philippines and that the law to the contrary in the
Philippines is the provision in said Article 16 that the national law of the deceased should
govern. This contention can not be sustained. As explained in the various authorities

cited above the national law mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the
reference or return of the question to the law of the testator's domicile. The conflict of
laws rule in California, Article 946, Civil Code, precisely refers back the case, when a
decedent is not domiciled in California, to the law of his domicile, the Philippines in the
case at bar. The court of the domicile can not and should not refer the case back to
California; such action would leave the issue incapable of determination because the
case will then be like a football, tossed back and forth between the two states, between
the country of which the decedent was a citizen and the country of his domicile. The
Philippine court must apply its own law as directed in the conflict of laws rule of the state
of the decedent, if the question has to be decided, especially as the application of the
internal law of California provides no legitime for children while the Philippine law, Arts.
887(4) and 894, Civil Code of the Philippines, makes natural children legally
acknowledged forced heirs of the parent recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil.
105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil.
130; and Gibbs vs. Government, 59 Phil. 293.) cited by appellees to support the decision
can not possibly apply in the case at bar, for two important reasons, i.e., the subject in
each case does not appear to be a citizen of a state in the United States but with
domicile in the Philippines, and it does not appear in each case that there exists in the
state of which the subject is a citizen, a law similar to or identical with Art. 946 of the
California Civil Code.
We therefore find that as the domicile of the deceased Christensen, a citizen of
California, is the Philippines, the validity of the provisions of his will depriving his
acknowledged natural child, the appellant, should be governed by the Philippine Law, the
domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal law of
California..
WHEREFORE, the decision appealed from is hereby reversed and the case returned to
the lower court with instructions that the partition be made as the Philippine law on
succession provides. Judgment reversed, with costs against appellees

G.R. No. L-23678

June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of
First Instance of Manila dated April 30, 1964, approving the project of partition filed by
the executor in Civil Case No. 37089 therein.
1wph1.t

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United
States." By his first wife, Mary E. Mallen, whom he divorced, he had five legitimate
children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A.
Bellis, Alexander Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy, who
survived him, he had three legitimate children: Edwin G. Bellis, Walter S. Bellis and
Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed
that after all taxes, obligations, and expenses of administration are paid for, his
distributable estate should be divided, in trust, in the following order and manner: (a)
$240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each
and (c) after the foregoing two items have been satisfied, the remainder shall go to his
seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry
A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and
Dorothy E. Bellis, in equal shares.
1wph1.t

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas,
U.S.A. His will was admitted to probate in the Court of First Instance of Manila on
September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the bequests
therein including the amount of $240,000.00 in the form of shares of stock to Mary E.
Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of their
respective legacies, or a total of P120,000.00, which it released from time to time
according as the lower court approved and allowed the various motions or petitions filed
by the latter three requesting partial advances on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor submitted and
filed its "Executor's Final Account, Report of Administration and Project of Partition"

wherein it reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the
delivery to her of shares of stock amounting to $240,000.00, and the legacies of Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the amount of P40,000.00
each or a total of P120,000.00. In the project of partition, the executor pursuant to the
"Twelfth" clause of the testator's Last Will and Testament divided the residuary estate
into seven equal portions for the benefit of the testator's seven legitimate children by his
first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective
oppositions to the project of partition on the ground that they were deprived of their
legitimes as illegitimate children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which
is evidenced by the registry receipt submitted on April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent pleadings, the
lower court, on April 30, 1964, issued an order overruling the oppositions and approving
the executor's final account, report and administration and project of partition. Relying
upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this
case is Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the lower court on
June 11, 1964, oppositors-appellants appealed to this Court to raise the issue of which
law must apply Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the doctrine of
renvoi, applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963.
Said doctrine is usually pertinent where the decedent is a national of one country, and a
domicile of another. In the present case, it is not disputed that the decedent was both a
national of Texas and a domicile thereof at the time of his death. 2 So that even assuming
Texas has a conflict of law rule providing that the domiciliary system (law of the domicile)
should govern, the same would not result in a reference back (renvoi) to Philippine law,
but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the
situs theory (lex rei sitae) calling for the application of the law of the place where the
properties are situated, renvoi would arise, since the properties here involved are found
in the Philippines. In the absence, however, of proof as to the conflict of law rule of
Texas, it should not be presumed different from ours.3Appellants' position is therefore not
rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in

their arguments. Rather, they argue that their case falls under the circumstances
mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of
the decedent, in intestate or testamentary successions, with regard to four items: (a) the
order of succession; (b) the amount of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed. They provide that
ART. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
However, intestate and testamentary successions, both with respect to the order
of succession and to the amount of successional rights and to the intrinsic validity
of testamentary provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may he the nature of the
property and regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the
decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating
that
Prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not
correct. Precisely, Congress deleted the phrase, "notwithstanding the provisions of this
and the next preceding article" when they incorporated Art. 11 of the old Civil Code as
Art. 17 of the new Civil Code, while reproducing without substantial change the second
paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must have been their
purpose to make the second paragraph of Art. 16 a specific provision in itself which must
be applied in testate and intestate succession. As further indication of this legislative
intent, Congress added a new provision, under Art. 1039, which decrees that capacity to
succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our
System of legitimes, Congress has not intended to extend the same to the succession of
foreign nationals. For it has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national law. Specific provisions must prevail over
general ones.
Appellants would also point out that the decedent executed two wills one to govern his
Texas estate and the other his Philippine estate arguing from this that he intended
Philippine law to govern his Philippine estate. Assuming that such was the decedent's
intention in executing a separate Philippine will, it would not alter the law, for as this
Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the
effect that his properties shall be distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national law cannot be ignored in regard
to those matters that Article 10 now Article 16 of the Civil Code states said national
law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas,
U.S.A., and that under the laws of Texas, there are no forced heirs or legitimes.
Accordingly, since the intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the Philippine law on legitimes
cannot be applied to the testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with costs against
appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and
Castro, JJ., concur.

G.R. No. 133876 December 29, 1999

BANK OF AMERICA, NT and SA, petitioner,
vs.
AMERICAN REALTY CORPORATION and COURT OF APPEALS, respondents.

BUENA, J.:
Does a mortgage-creditor waive its remedy to foreclose the real estate mortgage
constituted over a third party mortgagor's property situated in the Philippines by filing an
action for the collection of the principal loan before foreign courts?
Sought to be reversed in the instant petition for review on certiorari under Rule 45 of the
Rules of Court are the decision 1 of public respondent Court of Appeals in CA G.R. CV No.
51094, promulgated on 30 September 1997 and its resolution, 2 dated 22 May 1998, denying
petitioner's motion for reconsideration.
Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing
institution duly licensed to do business in the Philippines, organized and existing under
and by virtue of the laws of the State of California, United States of America while private
respondent American Realty Corporation (ARC) is a domestic corporation.
Bank of America International Limited (BAIL), on the other hand, is a limited liability
company organized and existing under the laws of England.
As borne by the records, BANTSA and BAIL on several occasions granted three major
multi-million United States (US) Dollar loans to the following corporate borrowers: (1)
Liberian Transport Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania
Naviera S.A. (hereinafter collectively referred to as "borrowers"), all of which are existing
under and by virtue of the laws of the Republic of Panama and are foreign affiliates of
private
respondent. 3

Due to the default in the payment of the loan amortizations, BANTSA and the corporate
borrowers signed and entered into restructuring agreements. As additional security for
the restructured loans, private respondent ARC as third party mortgagor executed two
real estate mortgages, 4 dated 17 February 1983 and 20 July 1984, over its parcels of land
including improvements thereon, located at Barrio Sto. Cristo, San Jose Del Monte, Bulacan,
and which are covered by Transfer Certificate of Title Nos. T-78759, T-78760, T-78761, T78762 and T-78763.
Eventually, the corporate borrowers defaulted in the payment of the restructured loans
prompting petitioner BANTSA to file civil actions 5 before foreign courts for the collection of
the principal loan, to wit:
a) In England, in its High Court of Justice, Queen's Bench
Division, Commercial Court (1992-Folio No 2098) against
Liberian Transport Navigation S.A., Eshley Compania
Naviera S.A., El Challenger S.A., Espriona Shipping
Company S.A., Eddie Navigation Corp., S.A., Eduardo
Katipunan Litonjua and Aurelio Katipunan Litonjua on
June 17, 1992.
b) In England, in its High Court of Justice, Queen's Bench
Division, Commercial Court (1992-Folio No. 2245) against
El Challenger S.A., Espriona Shipping Company S.A.,
Eduardo Katipuan Litonjua & Aurelio Katipunan Litonjua
on July 2, 1992;
c) In Hongkong, in the Supreme Court of Hongkong High
Court (Action No. 4039 of 1992) against Eshley
Compania Naviera S.A., El Challenger S.A., Espriona
Shipping Company S.A. Pacific Navigators Corporation,
Eddie Navigation Corporation S.A., Litonjua Chartering
(Edyship) Co., Inc., Aurelio Katipunan Litonjua, Jr. and
Eduardo Katipunan Litonjua on November 19, 1992; and
d) In Hongkong, in the Supreme Court of Hongkong High
Court (Action No. 4040 of 1992) against Eshley
Compania Naviera S.A., El Challenger S.A., Espriona
Shipping Company, S.A., Pacific Navigators Corporation,
Eddie Navigation Corporation S.A., Litonjua Chartering

(Edyship) Co., Jr. and Eduardo Katipunan Litonjua on

November 21, 1992.
In the civil suits instituted before the foreign courts, private respondent ARC, being a third
party mortgagor, was private not impleaded as party-defendant.
On 16 December 1992, petitioner BANTSA filed before the Office of the Provincial Sheriff
of Bulacan, Philippines an application for extrajudicial foreclosure 6 of real estate
mortgage.
On 22 January 1993, after due publication and notice, the mortgaged real properties
were sold at public auction in an extrajudicial foreclosure sale, with Integrated Credit and
Corporation Services Co (ICCS) as the highest bidder for the sum of Twenty four Million
Pesos (P24,000.000.00). 7
On 12 February 1993, private respondent filed before the Pasig Regional Trial Court,
Branch 159, an action for damages 8 against the petitioner, for the latter's act of foreclosing
extrajudicially the real estate mortgages despite the pendency of civil suits before foreign
courts for the collection of the principal loan.
In its answer 9 petitioner alleged that the rule prohibiting the mortgagee from foreclosing the
mortgage after an ordinary suit for collection has been filed, is not applicable in the present
case, claiming that:
a) The plaintiff, being a mere third party mortgagor and not a party to the
principal restructuring agreements, was never made a party defendant in
the civil cases filed in Hongkong and England;
b) There is actually no civil suit for sum of money filed in the Philippines
since the civil actions were filed in Hongkong and England. As such, any
decisions (sic) which may be rendered in the abovementioned courts are
not (sic) enforceable in the Philippines unless a separate action to
enforce the foreign judgments is first filed in the Philippines, pursuant to
Rule 39, Section 50 of the Revised Rules of Court.
c) Under English Law, which is the governing law under the principal
agreements, the mortgagee does not lose its security interest by filing
civil actions for sums of money.

On 14 December 1993, private respondent filed a motion for

suspension 10 of the redemption period on the ground that "it cannot exercise said right of
redemption without at the same time waiving or contradicting its contentions in the case that
the foreclosure of the mortgage on its properties is legally improper and therefore invalid."
In an order 11 dated 28 January 1994, the trial court granted the private respondent's motion
for suspension after which a copy of said order was duly received by the Register of Deeds of
Meycauayan, Bulacan.
On 07 February 1994, ICCS, the purchaser of the mortgaged properties at the
foreclosure sale, consolidated its ownership over the real properties, resulting to the
issuance of Transfer Certificate of Title Nos. T-18627, T-186272, T-186273, T-16471 and
T-16472 in its name.
On 18 March 1994, after the consolidation of ownership in its favor, ICCS sold the real
properties to Stateland Investment Corporation for the amount of Thirty Nine Million
Pesos (P39,000,000.00). 12 Accordingly, Transfer Certificate of Title Nos. T-187781(m), T187782(m), T-187783(m), T-16653P(m) and T-16652P(m) were issued in the latter's name.
After trial, the lower court rendered a decision 13 in favor of private respondent ARC dated
12 May 1993, the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered declaring that the filing in
foreign courts by the defendant of collection suits against the principal
debtors operated as a waiver of the security of the mortgages.
Consequently, the plaintiff's rights as owner and possessor of the
properties then covered by Transfer Certificates of Title Nos. T-78759, T78762, T-78763, T-78760 and T-78761, all of the Register of Deeds of
Meycauayan, Bulacan, Philippines, were violated when the defendant
caused the extrajudicial foreclosure of the mortgages constituted thereon.
Accordingly, the defendant is hereby ordered to pay the plaintiff the
following sums, all with legal interest thereon from the date of the filing of
the complaint up to the date of actual payment:
1) Actual or compensatory damages in the amount of Ninety Nine Million
Pesos (P99,000,000.00);

2) Exemplary damages in the amount of Five Million Pesos

(P5,000,000.00); and

2. Whether or not the award by the lower court of actual

and exemplary damages in favor of private respondent
ARC, as third-party mortgagor, is proper.

3) Costs of suit.
The petition is bereft of merit.
SO ORDERED.
On appeal, the Court of Appeals affirmed the assailed decision of the lower court
prompting petitioner to file a motion for reconsideration which the appellate court denied.
Hence, the instant petition for review 14 on certiorari where herein petitioner BANTSA
ascribes to the Court of Appeals the following assignment of errors:
1. The Honorable Court of Appeals disregarded the
doctrines laid down by this Hon. Supreme Court in the
cases of Caltex Philippines, Inc. vs. Intermediate
Appellate Court docketed as G.R. No. 74730 promulgated
on August 25, 1989 and Philippine Commercial
International Bank vs. IAC, 196 SCRA 29 (1991 case),
although said cases were duly cited, extensively
discussed and specifically mentioned, as one of the
issues in the assignment of errors found on page 5 of the
decision dated September 30, 1997.
2. The Hon. Court of Appeals acted with grave abuse of
discretion when it awarded the private respondent actual
and exemplary damages totalling P171,600,000.00, as of
July 12, 1998 although such huge amount was not asked
nor prayed for in private respondent's complaint, is
contrary to law and is totally unsupported by evidence
(sic).
In fine, this Court is called upon to resolve two main issues:
1. Whether or not the petitioner's act of filing a collection
suit against the principal debtors for the recovery of the
loan before foreign courts constituted a waiver of the
remedy of foreclosure.

First, as to the issue of availability of remedies, petitioner submits that a waiver of the
remedy of foreclosure requires the concurrence of two requisites: an ordinary civil action
for collection should be filed and subsequently a final judgment be correspondingly
rendered therein.
According to petitioner, the mere filing of a personal action to collect the principal loan
does not suffice; a final judgment must be secured and obtained in the personal action
so that waiver of the remedy of foreclosure may be appreciated. To put it differently,
absent any of the two requisites, the mortgagee-creditor is deemed not to have waived
the remedy of foreclosure.
We do not agree.
Certainly, this Court finds petitioner's arguments untenable and upholds the
jurisprudence laid down in Bachrach 15 and similar cases adjudicated thereafter, thus:
In the absence of express statutory provisions, a mortgage creditor may
institute against the mortgage debtor either a personal action or debt or a
real action to foreclose the mortgage. In other words, he may he may
pursue either of the two remedies, but not both. By such election, his
cause of action can by no means be impaired, for each of the two
remedies is complete in itself. Thus, an election to bring a personal action
will leave open to him all the properties of the debtor for attachment and
execution, even including the mortgaged property itself. And, if he waives
such personal action and pursues his remedy against the mortgaged
property, an unsatisfied judgment thereon would still give him the right to
sue for a deficiency judgment, in which case, all the properties of the
defendant, other than the mortgaged property, are again open to him for
the satisfaction of the deficiency. In either case, his remedy is complete,
his cause of action undiminished, and any advantages attendant to the
pursuit of one or the other remedy are purely accidental and are all under
his right of election. On the other hand, a rule that would authorize the

plaintiff to bring a personal action against the debtor and simultaneously

or successively another action against the mortgaged property, would
result not only in multiplicity of suits so offensive to justice (Soriano vs.
Enriques, 24 Phil. 584) and obnoxious to law and equity (Osorio vs. San
Agustin, 25 Phil., 404), but also in subjecting the defendant to the
vexation of being sued in the place of his residence or of the residence of
the plaintiff, and then again in the place where the property lies.
In Danao vs. Court of Appeals, this Court, reiterating jurisprudence enunciated in Manila
Trading and Supply Co vs. Co Kim 17 and Movido vs.
RFC, 18 invariably held:
16

. . . The rule is now settled that a mortgage creditor may elect to waive
his security and bring, instead, an ordinary action to recover the
indebtedness with the right to execute a judgment thereon on all the
properties of the debtor, including the subject matter of the
mortgage . . . , subject to the qualification that if he fails in the remedy by
him elected, he cannot pursue further the remedy he has waived.
(Emphasis Ours)
Anent real properties in particular, the Court has laid down the rule that a mortgage
creditor may institute against the mortgage debtor either a personal action for debt or a
real action to foreclose the mortgage. 19
In our jurisdiction, the remedies available to the mortgage creditor are deemed
alternative and not cumulative. Notably, an election of one remedy operates as a waiver
of the other. For this purpose, a remedy is deemed chosen upon the filing of the suit for
collection or upon the filing of the complaint in an action for foreclosure of mortgage,
pursuant to the provision of Rule 68 of the of the 1997 Rules of Civil Procedure. As to
extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon
filing of the petition not with any court of justice but with the Office of the Sheriff of the
province where the sale is to be made, in accordance with the provisions of Act No.
3135, as amended by Act No. 4118.
In the case at bench, private respondent ARC constituted real estate mortgages over its
properties as security for the debt of the principal debtors. By doing so, private
respondent subjected itself to the liabilities of a third party mortgagor. Under the law, third
persons who are not parties to a loan may secure the latter by pledging or mortgaging
their own property. 20

Notwithstanding, there is no legal provision nor jurisprudence in our jurisdiction which

makes a third person who secures the fulfillment of another's obligation by mortgaging
his own property, to be solidarily bound with the principal obligor. The signatory to the
principal contractloanremains to be primarily bound. It is only upon default of the
latter that the creditor may have recourse on the mortgagors by foreclosing the
mortgaged properties in lieu of an action for the recovery of the amount of the loan. 21
In the instant case, petitioner's contention that the requisites of filing the action for
collection and rendition of final judgment therein should concur, is untenable.
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner in said case, that the
filing of a collection suit barred the foreclosure of the mortgage:
A mortgagee who files a suit for collection abandons the remedy of
foreclosure of the chattel mortgage constituted over the personal property
as security for the debt or value of the promissory note when he seeks to
recover in the said collection suit.
. . . When the mortgagee elects to file a suit for collection, not
foreclosure, thereby abandoning the chattel mortgage as basis for relief,
he clearly manifests his lack of desire and interest to go after the
mortgaged property as security for the promissory note . . . .
Contrary to petitioner's arguments, we therefore reiterate the rule, for clarity and
emphasis, that the mere act of filing of an ordinary action for collection operates as a
waiver of the mortgage-creditor's remedy to foreclose the mortgage. By the mere filing of
the ordinary action for collection against the principal debtors, the petitioner in the
present case is deemed to have elected a remedy, as a result of which a waiver of the
other necessarily must arise. Corollarily, no final judgment in the collection suit is
required for the rule on waiver to apply.
Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate Court, 23 a case relied upon
by petitioner, supposedly to buttress its contention, this Court had occasion to rule that the
mere act of filing a collection suit for the recovery of a debt secured by a mortgage constitutes
waiver of the other remedy of foreclosure.
In the case at bar, petitioner BANTSA only has one cause of action which is nonpayment of the debt. Nevertheless, alternative remedies are available for its enjoyment

and exercise. Petitioner then may opt to exercise only one of two remedies so as not to
violate the rule against splitting a cause of action.
As elucidated by this Court in the landmark case of Bachrach Motor Co., Inc, vs.
Icarangal. 24

Notably, though, petitioner took the Caltex ruling out of context. We must stress that the
Caltex case was never intended to overrule the well-entrenched doctrine enunciated
Bachrach, which to our mind still finds applicability in cases of this sort. To reiterate,
Bachrach is still good law.
We then quote the decision 25 of the trial court, in the present case, thus:

For non-payment of a note secured by mortgage, the creditor has a

single cause of action against the debtor. This single cause of action
consists in the recovery of the credit with execution of the security. In
other words, the creditor in his action may make two demands, the
payment of the debt and the foreclosure of his mortgage. But both
demands arise from the same cause, the non-payment of the debt, and
for that reason, they constitute a single cause of action. Though the debt
and the mortgage constitute separate agreements, the latter is subsidiary
to the former, and both refer to one and the same obligation.
Consequently, there exists only one cause of action for a single breach of
that obligation. Plaintiff, then, by applying the rules above stated, cannot
split up his single cause of action by filing a complaint for payment of the
debt, and thereafter another complaint for foreclosure of the mortgage. If
he does so, the filing of the first complaint will bar the subsequent
complaint. By allowing the creditor to file two separate complaints
simultaneously or successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be authorizing him plural
redress for a single breach of contract at so much cost to the courts and
with so much vexation and oppression to the debtor.
Petitioner further faults the Court of Appeals for allegedly disregarding the doctrine
enunciated in Caltex wherein this High Court relaxed the application of the general rules
to wit:
In the present case, however, we shall not follow this rule to the letter but
declare that it is the collection suit which was waived and/or abandoned.
This ruling is more in harmony with the principles underlying our judicial
system. It is of no moment that the collection suit was filed ahead, what is
determinative is the fact that the foreclosure proceedings ended even
before the decision in the collection suit was rendered. . . .

The aforequoted ruling in Caltex is the exception rather than the rule,
dictated by the peculiar circumstances obtaining therein. In the said case,
the Supreme Court chastised Caltex for making ". . . a mockery of our
judicial system when it initially filed a collection suit then, during the
pendency thereof, foreclosed extrajudicially the mortgaged property
which secured the indebtedness, and still pursued the collection suit to
the end." Thus, to prevent a mockery of our judicial system", the
collection suit had to be nullified because the foreclosure proceedings
have already been pursued to their end and can no longer be undone.
xxx xxx xxx
In the case at bar, it has not been shown whether the defendant pursued
to the end or are still pursuing the collection suits filed in foreign courts.
There is no occasion, therefore, for this court to apply the exception laid
down by the Supreme Court in Caltex by nullifying the collection suits.
Quite obviously, too, the aforesaid collection suits are beyond the reach
of this Court. Thus the only way the court may prevent the spector of a
creditor having "plural redress for a single breach of contract" is by
holding, as the Court hereby holds, that the defendant has waived the
right to foreclose the mortgages constituted by the plaintiff on its
properties originally covered by Transfer Certificates of Title Nos. T78759, T-78762, T-78760 and T-78761. (RTC Decision pp., 10-11)
In this light, the actuations of Caltex are deserving of severe criticism, to say the least.
Moreover, petitioner attempts to mislead this Court by citing the case of PCIB vs.
IAC. 27 Again, petitioner tried to fit a square peg in a round hole. It must be stressed that far
from overturning the doctrine laid down in Bachrach, this Court in PCIB buttressed its firm
stand on this issue by declaring:

26

While the law allows a mortgage creditor to either institute a personal

action for the debt or a real action to foreclosure the mortgage, he cannot
pursue both remedies simultaneously or successively as was done by
PCIB in this case.
xxx xxx xxx
Thus, when the PCIB filed Civil Case No. 29392 to enforce payment of
the 1.3 million promissory note secured by real estate mortgages and
subsequently filed a petition for extrajudicial foreclosure, it violates the
rule against splitting a cause of action.
Accordingly, applying the foregoing rules, we hold that petitioner, by the expediency of
filing four civil suits before foreign courts, necessarily abandoned the remedy to foreclose
the real estate mortgages constituted over the properties of third-party mortgagor and
herein private respondent ARC. Moreover, by filing the four civil actions and by
eventually foreclosing extrajudicially the mortgages, petitioner in effect transgressed the
rules against splitting a cause of action well-enshrined in jurisprudence and our statute
books.
In Bachrach, this Court resolved to deny the creditor the remedy of foreclosure after the
collection suit was filed, considering that the creditor should not be afforded "plural
redress for a single breach of contract." For cause of action should not be confused with
the remedy created for its enforcement. 28
Notably, it is not the nature of the redress which is crucial but the efficacy of the remedy
chosen in addressing the creditor's cause. Hence, a suit brought before a foreign court
having competence and jurisdiction to entertain the action is deemed, for this purpose, to
be within the contemplation of the remedy available to the mortgagee-creditor. This
pronouncement would best serve the interest of justice and fair play and further
discourage the noxious practice of splitting up a lone cause of action.
Incidentally, BANTSA alleges that under English Law, which according to petitioner is the
governing law with regard to the principal agreements, the mortgagee does not lose its
security interest by simply filing civil actions for sums of money. 29
We rule in the negative.

This argument shows desperation on the part of petitioner to rivet its crumbling cause. In
the case at bench, Philippine law shall apply notwithstanding the evidence presented by
petitioner to prove the English law on the matter.
In a long line of decisions, this Court adopted the well-imbedded principle in our
jurisdiction that there is no judicial notice of any foreign law. A foreign law must be
properly pleaded and proved as a fact. 30 Thus, if the foreign law involved is not properly
pleaded and proved, our courts will presume that the foreign law is the same as our local or
domestic or internal
law. 31 This is what we refer to as the doctrine of processual presumption.
In the instant case, assuming arguendo that the English Law on the matter were properly
pleaded and proved in accordance with Section 24, Rule 132 of the Rules of Court and
the jurisprudence laid down in Yao Kee, et al. vs.
Sy-Gonzales, 32 said foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to a sound and established
public policy of the forum, the said foreign law, judgment or order shall not be applied. 33
Additionally, prohibitive laws concerning persons, their acts or property, and those which
have for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country. 34
The public policy sought to be protected in the instant case is the principle imbedded in
our jurisdiction proscribing the splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent
If two or more suits are instituted on the basis of the same cause of
action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others.
Moreover, foreign law should not be applied when its application would work undeniable
injustice to the citizens or residents of the forum. To give justice is the most important
function of law; hence, a law, or judgment or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws. 35
Clearly then, English Law is not applicable.

As to the second pivotal issue, we hold that the private respondent is entitled to the
award of actual or compensatory damages inasmuch as the act of petitioner BANTSA in
extrajudicially foreclosing the real estate mortgages constituted a clear violation of the
rights of herein private respondent ARC, as third-party mortgagor.
Actual or compensatory damages are those recoverable because of pecuniary loss in
business, trade, property, profession, job or occupation and the same must be proved,
otherwise if the proof is flimsy and non-substantial, no damages will be given. 36 Indeed,
the question of the value of property is always a difficult one to settle as valuation of real
property is an imprecise process since real estate has no inherent value readily ascertainable
by an appraiser or by the court. 37 The opinions of men vary so much concerning the real
value of property that the best the courts can do is hear all of the witnesses which the
respective parties desire to present, and then, by carefully weighing that testimony, arrive at a
conclusion which is just and equitable. 38
In the instant case, petitioner assails the Court of Appeals for relying heavily on the
valuation made by Philippine Appraisal Company. In effect, BANTSA questions the act of
the appellate court in giving due weight to the appraisal report composed of twenty three
pages, signed by Mr. Lauro Marquez and submitted as evidence by private respondent.
The appraisal report, as the records would readily show, was corroborated by the
testimony of Mr. Reynaldo Flores, witness for private respondent.
On this matter, the trial court observed:
The record herein reveals that plaintiff-appellee formally offered as
evidence the appraisal report dated March 29, 1993 (Exhibit J, Records,
p. 409), consisting of twenty three (23) pages which set out in detail the
valuation of the property to determine its fair market value (TSN, April 22,
1994, p. 4), in the amount of P99,986,592.00 (TSN, ibid., p. 5), together
with the corroborative testimony of one Mr. Reynaldo F. Flores, an
appraiser and director of Philippine Appraisal Company, Inc. (TSN, ibid.,
p. 3). The latter's testimony was subjected to extensive crossexamination by counsel for defendant-appellant (TSN, April 22, 1994, pp.
6-22). 39
In the matter of credibility of witnesses, the Court reiterates the familiar and wellentrenched rule that the factual findings of the trial court should be respected. 40 The timetested jurisprudence is that the findings and conclusions of the trial court on the credibility of

witnesses enjoy a badge of respect for the reason that trial courts have the advantage of
observing the demeanor of witnesses as they testify. 41

This Court will not alter the findings of the trial court on the credibility of witnesses,
principally because they are in a better position to assess the same than the appellate
court. 42 Besides, trial courts are in a better position to examine real evidence as well as
observe the demeanor of witnesses. 43
Similarly, the appreciation of evidence and the assessment of the credibility of witnesses
rest primarily with the trial court. 44 In the case at bar, we see no reason that would justify
this Court to disturb the factual findings of the trial court, as affirmed by the Court of Appeals,
with regard to the award of actual damages.
In arriving at the amount of actual damages, the trial court justified the award by
presenting the following ratiocination in its assailed decision 45, to wit:
Indeed, the Court has its own mind in the matter of valuation. The size of
the subject real properties are (sic) set forth in their individuals titles, and
the Court itself has seen the character and nature of said properties
during the ocular inspection it conducted. Based principally on the
foregoing, the Court makes the following observations:
1. The properties consist of about 39 hectares in Bo. Sto. Cristo, San
Jose del Monte, Bulacan, which is (sic) not distant from Metro Manila
the biggest urban center in the Philippines and are easily accessible
through well-paved roads;
2. The properties are suitable for development into a subdivision for low
cost housing, as admitted by defendant's own appraiser (TSN, May 30,
1994, p. 31);
3. The pigpens which used to exist in the property have already been
demolished. Houses of strong materials are found in the vicinity of the
property (Exhs. 2, 2-1 to 2-7), and the vicinity is a growing community. It
has even been shown that the house of the Barangay Chairman is
located adjacent to the property in question (Exh. 27), and the only
remaining piggery (named Cherry Farm) in the vicinity is about 2
kilometers away from the western boundary of the property in question
(TSN, November 19, p. 3);

4. It will not be hard to find interested buyers of the property, as

indubitably shown by the fact that on March 18, 1994, ICCS (the buyer
during the foreclosure sale) sold the consolidated real estate properties
to Stateland Investment Corporation, in whose favor new titles were
issued, i.e., TCT Nos. T-187781(m); T-187782(m), T-187783(m); T16653P(m) and T-166521(m) by the Register of Deeds of Meycauayan
(sic), Bulacan;

Further, petitioner ascribes error to the lower court awarding an amount allegedly not
asked nor prayed for in private respondent's complaint.
Notwithstanding the fact that the award of actual and compensatory damages by the
lower court exceeded that prayed for in the complaint, the same is nonetheless valid,
subject to certain qualifications.
On this issue, Rule 10, Section 5 of the Rules of Court is pertinent:

5. The fact that ICCS was able to sell the subject properties to Stateland
Investment Corporation for Thirty Nine Million (P39,000,000.00) Pesos,
which is more than triple defendant's appraisal (Exh. 2) clearly shows that
the Court cannot rely on defendant's aforesaid estimate (Decision,
Records, p. 603).
It is a fundamental legal aphorism that the conclusions of the trial judge on the credibility
of witnesses command great respect and consideration especially when the conclusions
are supported by the evidence on record. 46Applying the foregoing principle, we therefore
hold that the trial court committed no palpable error in giving credence to the testimony of
Reynaldo Flores, who according to the records, is a licensed real estate broker, appraiser and
director of Philippine Appraisal Company, Inc. since 1990. 47 As the records show, Flores had
been with the company for 26 years at the time of his testimony.
Of equal importance is the fact that the trial court did not confine itself to the appraisal
report dated 29 March 1993, and the testimony given by Mr. Reynaldo Flores, in
determining the fair market value of the real property. Above all these, the record would
likewise show that the trial judge in order to appraise himself of the characteristics and
condition of the property, conducted an ocular inspection where the opposing parties
appeared and were duly represented.
Based on these considerations and the evidence submitted, we affirm the ruling of the
trial court as regards the valuation of the property
. . . a valuation of Ninety Nine Million Pesos (P99,000,000.00) for the 39hectare properties (sic) translates to just about Two Hundred Fifty Four
Pesos (P254.00) per square meter. This appears to be, as the court so
holds, a better approximation of the fair market value of the subject
properties. This is the amount which should be restituted by the
defendant to the plaintiff by way of actual or compensatory
damages . . . . 48

Sec. 5. Amendment to conform to or authorize presentation of evidence.

When issues not raised by the pleadings are tried with the express or
implied consent of the parties, they shall be treated in all respects as if
they had been raised in the pleadings. Such amendment of the pleadings
as may be necessary to cause them to conform to the evidence and to
raise these issues may be made upon motion of any party at any time,
even after judgement; but failure to amend does not affect the result of
the trial of these issues. If evidence is objected to at the trial on the
ground that it is not within the issues made by the pleadings, the court
may allow the pleadings to be amended and shall do so with liberality if
the presentation of the merits of the action and the ends of substantial
justice will be subserved thereby. The court may grant a continuance to
enable the amendment to be made.
The jurisprudence enunciated in Talisay-Silay Milling Co., Inc. vs. Asociacion de
Agricultures de Talisay-Silay, Inc. 49 citing Northern Cement Corporation vs. Intermediate
Appellate Court 50 is enlightening:
There have been instances where the Court has held that even without
the necessary amendment, the amount proved at the trial may be validly
awarded, as in Tuazon v. Bolanos (95 Phil. 106), where we said that if the
facts shown entitled plaintiff to relief other than that asked for, no
amendment to the complaint was necessary, especially where defendant
had himself raised the point on which recovery was based. The appellate
court could treat the pleading as amended to conform to the evidence
although the pleadings were actually not amended. Amendment is also
unnecessary when only clerical error or non substantial matters are
involved, as we held in Bank of the Philippine Islands vs. Laguna (48
Phil. 5). In Co Tiamco vs. Diaz (75 Phil. 672), we stressed that the rule on
amendment need not be applied rigidly, particularly where no surprise or

prejudice is caused the objecting party. And in the recent case of National
Power Corporation vs. Court of Appeals (113 SCRA 556), we held that
where there is a variance in the defendant's pleadings and the evidence
adduced by it at the trial, the Court may treat the pleading as amended to
conform with the evidence.
It is the view of the Court that pursuant to the above-mentioned rule and
in light of the decisions cited, the trial court should not be precluded from
awarding an amount higher than that claimed in the pleading
notwithstanding the absence of the required amendment. But it is upon
the condition that the evidence of such higher amount has been
presented properly, with full opportunity on the part of the opposing
parties to support their respective contentions and to refute each other's
evidence.
The failure of a party to amend a pleading to conform to the evidence
adduced during trial does not preclude an adjudication by the court on
the basis of such evidence which may embody new issues not raised in
the pleadings, or serve as a basis for a higher award of damages.
Although the pleading may not have been amended to conform to the
evidence submitted during trial, judgment may nonetheless be rendered,
not simply on the basis of the issues alleged but also the basis of issues
discussed and the assertions of fact proved in the course of trial. The
court may treat the pleading as if it had been amended to conform to the
evidence, although it had not been actually so amended. Former Chief
Justice Moran put the matter in this way:
When evidence is presented by one party, with the
expressed or implied consent of the adverse party, as to
issues not alleged in the pleadings, judgment may be
rendered validly as regards those issues, which shall be
considered as if they have been raised in the pleadings.
There is implied consent to the evidence thus presented
when the adverse party fails to object thereto.
Clearly, a court may rule and render judgment on the basis of the
evidence before it even though the relevant pleading had not been
previously amended, so long as no surprise or prejudice is thereby

caused to the adverse party. Put a little differently, so long as the basis
requirements of fair play had been met, as where litigants were given full
opportunity to support their respective contentions and to object to or
refute each other's evidence, the court may validly treat the pleadings as
if they had been amended to conform to the evidence and proceed to
adjudicate on the basis of all the evidence before it.
In the instant case, inasmuch as the petitioner was afforded the opportunity to refute and
object to the evidence, both documentary and testimonial, formally offered by private
respondent, the rudiments of fair play are deemed satisfied. In fact, the testimony of
Reynaldo Flores was put under scrutiny during the course of the cross-examination.
Under these circumstances, the court acted within the bounds of its jurisdiction and
committed no reversible error in awarding actual damages the amount of which is higher
than that prayed for. Verily, the lower court's actuations are sanctioned by the Rules and
supported by jurisprudence.
Similarly, we affirm the grant of exemplary damages although the amount of Five Million
Pesos (P5,000,000.00) awarded, being excessive, is subject to reduction. Exemplary or
corrective damages are imposed, by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory damages. 51 Considering its
purpose, it must be fair and reasonable in every case and should not be awarded to unjustly
enrich a prevailing party. 52 In our view, an award of P50,000.00 as exemplary damages in the
present case qualifies the test of reasonableness.
WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The
decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION of the
amount awarded as exemplary damages. According, petitioner is hereby ordered to pay
private respondent the sum of P99,000,000.00 as actual or compensatory damages;
P50,000.00 as exemplary damage and the costs of suit.SO ORDERED.
Bellosillo, Mendoza, Quisumbing and De Leon, Jr., JJ., concur.
G.R. No. 168785

February 5, 2010

HERALD BLACK DACASIN, Petitioner,

vs.
SHARON DEL MUNDO DACASIN, Respondent.
DECISION

CARPIO, J.:
The Case
For review1 is a dismissal2 of a suit to enforce a post-foreign divorce child custody
agreement for lack of jurisdiction.
The Facts
Petitioner Herald Dacasin (petitioner), American, and respondent Sharon Del Mundo
Dacasin (respondent), Filipino, were married in Manila in April 1994. They have one
daughter, Stephanie, born on 21 September 1995. In June 1999, respondent sought and
obtained from the Circuit Court, 19th Judicial Circuit, Lake County, Illinois (Illinois court) a
divorce decree against petitioner.3 In its ruling, the Illinois court dissolved the marriage of
petitioner and respondent, awarded to respondent sole custody of Stephanie and
retained jurisdiction over the case for enforcement purposes.

In its Order dated 23 June 2005, the trial court denied reconsideration, holding that unlike
in the case of respondent, the divorce decree is binding on petitioner under the laws of
his nationality.
Hence, this petition.
Petitioner submits the following alternative theories for the validity of the Agreement to
justify its enforcement by the trial court: (1) the Agreement novated the valid divorce
decree, modifying the terms of child custody from sole (maternal) to joint;8 or (2) the
Agreement is independent of the divorce decree obtained by respondent.
The Issue
The question is whether the trial court has jurisdiction to take cognizance of petitioners
suit and enforce the Agreement on the joint custody of the parties child.
The Ruling of the Court

On 28 January 2002, petitioner and respondent executed in Manila a contract

(Agreement4 ) for the joint custody of Stephanie. The parties chose Philippine courts as
exclusive forum to adjudicate disputes arising from the Agreement. Respondent
undertook to obtain from the Illinois court an order "relinquishing" jurisdiction to Philippine
courts.
In 2004, petitioner sued respondent in the Regional Trial Court of Makati City, Branch 60
(trial court) to enforce the Agreement. Petitioner alleged that in violation of the
Agreement, respondent exercised sole custody over Stephanie.
Respondent sought the dismissal of the complaint for, among others, lack of jurisdiction
because of the Illinois courts retention of jurisdiction to enforce the divorce decree.
The Ruling of the Trial Court
In its Order dated 1 March 2005, the trial court sustained respondents motion and
dismissed the case for lack of jurisdiction. The trial court held that: (1) it is precluded from
taking cognizance over the suit considering the Illinois courts retention of jurisdiction to
enforce its divorce decree, including its order awarding sole custody of Stephanie to
respondent; (2) the divorce decree is binding on petitioner following the "nationality rule"
prevailing in this jurisdiction;5 and (3) the Agreement is void for contravening Article 2035,
paragraph 5 of the Civil Code6prohibiting compromise agreements on jurisdiction.7
Petitioner sought reconsideration, raising the new argument that the divorce decree
obtained by respondent is void. Thus, the divorce decree is no bar to the trial courts
exercise of jurisdiction over the case.

The trial court has jurisdiction to entertain petitioners suit but not to enforce the
Agreement which is void. However, factual and equity considerations militate against the
dismissal of petitioners suit and call for the remand of the case to settle the question of
Stephanies custody.
Regional Trial Courts Vested With Jurisdiction
to Enforce Contracts
Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in the
trial court, statutory law vests on Regional Trial Courts exclusive original jurisdiction over
civil actions incapable of pecuniary estimation.9An action for specific performance, such
as petitioners suit to enforce the Agreement on joint child custody, belongs to this
species of actions.10 Thus, jurisdiction-wise, petitioner went to the right court.
Indeed, the trial courts refusal to entertain petitioners suit was grounded not on its lack
of power to do so but on its thinking that the Illinois courts divorce decree stripped it of
jurisdiction. This conclusion is unfounded. What the Illinois court retained was
"jurisdiction x x x for the purpose of enforcing all and sundry the various provisions of [its]
Judgment for Dissolution."11 Petitioners suit seeks the enforcement not of the "various
provisions" of the divorce decree but of the post-divorce Agreement on joint child
custody. Thus, the action lies beyond the zone of the Illinois courts so-called "retained
jurisdiction."
Petitioners Suit Lacks Cause of Action

The foregoing notwithstanding, the trial court cannot enforce the Agreement which is
contrary to law.
In this jurisdiction, parties to a contract are free to stipulate the terms of agreement
subject to the minimum ban on stipulations contrary to law, morals, good customs, public
order, or public policy.12 Otherwise, the contract is denied legal existence, deemed
"inexistent and void from the beginning."13 For lack of relevant stipulation in the
Agreement, these and other ancillary Philippine substantive law serve as default
parameters to test the validity of the Agreements joint child custody stipulations. 14
At the time the parties executed the Agreement on 28 January 2002, two facts are
undisputed: (1) Stephanie was under seven years old (having been born on 21
September 1995); and (2) petitioner and respondent were no longer married under the
laws of the United States because of the divorce decree. The relevant Philippine law on
child custody for spouses separated in fact or in law15 (under the second paragraph of
Article 213 of the Family Code) is also undisputed: "no child under seven years of age
shall be separated from the mother x x x."16 (This statutory awarding of sole parental
custody17 to the mother is mandatory,18 grounded on sound policy consideration,19 subject
only to a narrow exception not alleged to obtain here. 20 ) Clearly then, the Agreements
object to establish a post-divorce joint custody regime between respondent and petitioner
over their child under seven years old contravenes Philippine law.
The Agreement is not only void ab initio for being contrary to law, it has also been
repudiated by the mother when she refused to allow joint custody by the father. The
Agreement would be valid if the spouses have not divorced or separated because the
law provides for joint parental authority when spouses live together.21 However, upon
separation of the spouses, the mother takes sole custody under the law if the child is
below seven years old and any agreement to the contrary is void. Thus, the law
suspends the joint custody regime for (1) children under seven of (2) separated or
divorced spouses. Simply put, for a child within this age bracket (and for
commonsensical reasons), the law decides for the separated or divorced parents how
best to take care of the child and that is to give custody to the separated mother. Indeed,
the separated parents cannot contract away the provision in the Family Code on the
maternal custody of children below seven years anymore than they can privately agree
that a mother who is unemployed, immoral, habitually drunk, drug addict, insane or
afflicted with a communicable disease will have sole custody of a child under seven as
these are reasons deemed compelling to preclude the application of the exclusive
maternal custody regime under the second paragraph of Article 213. 22
It will not do to argue that the second paragraph of Article 213 of the Family Code applies
only to judicial custodial agreements based on its text that "No child under seven years
of age shall be separated from the mother, unless the court finds compelling reasons to
order otherwise." To limit this provisions enforceability to court sanctioned agreements
while placing private agreements beyond its reach is to sanction a double standard in

custody regulation of children under seven years old of separated parents. This
effectively empowers separated parents, by the simple expedient of avoiding the courts,
to subvert a legislative policy vesting to the separated mother sole custody of her
children under seven years of age "to avoid a tragedy where a mother has seen her baby
torn away from her."23 This ignores the legislative basis that "[n]o man can sound the
deep sorrows of a mother who is deprived of her child of tender age." 24
It could very well be that Article 213s bias favoring one separated parent (mother) over
the other (father) encourages paternal neglect, presumes incapacity for joint parental
custody, robs the parents of custodial options, or hijacks decision-making between the
separated parents.25 However, these are objections which question the laws wisdom not
its validity or uniform enforceability. The forum to air and remedy these grievances is the
legislature, not this Court. At any rate, the rules seeming harshness or undesirability is
tempered by ancillary agreements the separated parents may wish to enter such as
granting the father visitation and other privileges. These arrangements are not
inconsistent with the regime of sole maternal custody under the second paragraph of
Article 213 which merely grants to the mother final authority on the care and custody of
the minor under seven years of age, in case of disagreements.
1avvphi1

Further, the imposed custodial regime under the second paragraph of Article 213 is
limited in duration, lasting only until the childs seventh year. From the eighth year until
the childs emancipation, the law gives the separated parents freedom, subject to the
usual contractual limitations, to agree on custody regimes they see fit to adopt. Lastly,
even supposing that petitioner and respondent are not barred from entering into the
Agreement for the joint custody of Stephanie, respondent repudiated the Agreement by
asserting sole custody over Stephanie. Respondents act effectively brought the parties
back to ambit of the default custodial regime in the second paragraph of Article 213 of
the Family Code vesting on respondent sole custody of Stephanie.
Nor can petitioner rely on the divorce decrees alleged invalidity - not because the Illinois
court lacked jurisdiction or that the divorce decree violated Illinois law, but because the
divorce was obtained by his Filipino spouse26 - to support the Agreements enforceability.
The argument that foreigners in this jurisdiction are not bound by foreign divorce decrees
is hardly novel. Van Dorn v. Romillo27 settled the matter by holding that an alien spouse
of a Filipino is bound by a divorce decree obtained abroad.28 There, we dismissed the
alien divorcees Philippine suit for accounting of alleged post-divorce conjugal property
and rejected his submission that the foreign divorce (obtained by the Filipino spouse) is
not valid in this jurisdiction in this wise:
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. What he is contending in this case is that the divorce is not valid and binding
in this jurisdiction, the same being contrary to local law and public policy.

It is true that owing to the nationality principle embodied in Article 15 of the Civil Code,
only Philippine nationals are covered by the policy against absolute divorces the same
being considered contrary to our concept of public policy and morality. However, aliens
may obtain divorces abroad, which may be recognized in the Philippines, provided they
are valid according to their national law. In this case, the divorce in Nevada released
private respondent from the marriage from the standards of American law, under which
divorce dissolves the marriage.
xxxx
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 petitioners husband
entitled to exercise control over conjugal assets. As he is bound by the Decision of his
own countrys Court, which validly exercised jurisdiction over him, and whose decision he
does not repudiate, he is estopped by his own representation before said Court from
asserting his right over the alleged conjugal property. (Emphasis supplied)
We reiterated Van Dorn in Pilapil v. Ibay-Somera29 to dismiss criminal complaints for
adultery filed by the alien divorcee (who obtained the foreign divorce decree) against his
former Filipino spouse because he no longer qualified as "offended spouse" entitled to
file the complaints under Philippine procedural rules. Thus, it should be clear by now that
a foreign divorce decree carries as much validity against the alien divorcee in this
jurisdiction as it does in the jurisdiction of the aliens nationality, irrespective of who
obtained the divorce.
The Facts of the Case and Nature of Proceeding
Justify Remand
Instead of ordering the dismissal of petitioners suit, the logical end to its lack of cause of
action, we remand the case for the trial court to settle the question of Stephanies
custody. Stephanie is now nearly 15 years old, thus removing the case outside of the
ambit of the mandatory maternal custody regime under Article 213 and bringing it within
coverage of the default standard on child custody proceedings the best interest of the
child.30 As the question of custody is already before the trial court and the childs parents,
by executing the Agreement, initially showed inclination to share custody, it is in the
interest of swift and efficient rendition of justice to allow the parties to take advantage of
the courts jurisdiction, submit evidence on the custodial arrangement best serving
Stephanies interest, and let the trial court render judgment. This disposition is consistent
with the settled doctrine that in child custody proceedings, equity may be invoked to
serve the childs best interest.31

WHEREFORE, we REVERSE the Orders dated 1 March 2005 and 23 June 2005 of the
Regional Trial Court of Makati City, Branch 60. The case is REMANDED for further
proceedings consistent with this ruling.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice

ROBERTO A. ABAD
Associate Justice

JOSE P. PEREZ
Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

Footnotes
1

In this regard, Art. 2035 of the Civil Code expressly states that no
compromise upon the questions of civil status of persons, validity of
marriage, or legal separation, future support, jurisdiction of courts and
future legitimate shall be valid.

Under Rule 45 of the 1997 Rules of Civil Procedure.

In the Orders dated 1 March 2005 and 23 June 2005 issued by the Trial Court
of Makati City, Branch 60.
2

Petitioner did not contest the proceedings.

Denominated "Compromise Agreement on Child Custody and Support."

Under Article 15 of the Civil Code which provides: "Laws relating to family rights
and duties, or to the status, condition and legal capacity of persons are binding
upon citizens of the Philippines, even though living abroad."
5

This provides: "No compromise upon the following questions shall be valid: x x x
(5) The jurisdiction of courts[.]"

As a corollary claim, petitioner submits that the stipulation in the Agreement

"vesting" exclusive jurisdiction to Philippine courts over conflicts arising from the
Agreement, even if void for being contrary to Article 2035, paragraph 5 of the
Civil Code, is severable from and does not affect the validity of the other terms of
the Agreement on joint custody.
8

Section 19, paragraph 1, Batas Pambansa Blg. 129, as amended by Republic

Act No. 7691, provides: "Jurisdiction in civil cases.- Regional Trial Courts shall
exercise exclusive original jurisdiction: (1) In all civil actions in which the subject
of the litigation is incapable of pecuniary estimation; x x x x"
9

The trial court held (Records, pp. 157-158):

[H]aving expressly recognized the validity of the Illinois Courts judgment
[petitioner] is bound by its provisions including the provision that the
Court would maintain sole jurisdiction to implement and enforce the
provisions of the said judgment which necessarily included guidelines for
the childs custody.
[Petitioner] being admittedly an American, following the nationality rule
which Philippine civil laws adhere to, the Judgment of the Illinois Court
would be binding upon him since the judicial disposition refers to matters
of status or legal capacity of a person.
xxxx
Moreover, this Court cannot act upon [petitioners] prayer to enforce the
terms of the said Compromise Agreement the said agreement being
invalid and therefore, void, precisely because it seeks to transfer
jurisdiction over the issue of child custody from the Illinois Court to this
Court by agreement of the parties, when the previous Court had already
effectively asserted its authority to act upon all matters relating to the said
issue.

10

See Ortigas & Company, Limited Partnership v. Herrera, 205 Phil. 61 (1983).

11

Records, p. 17 (emphasis supplied).

Article 1306 of the Civil Code provides: "The contracting parties may establish
such stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or
public policy."
12

Article 1409, paragraph 1 of the Civil Code provides: "The following contracts
are inexistent and void from the beginning: (1) Those whose cause, object or
purpose is contrary to law, morals, good customs, public order or public policy; x
x x x"
13

It can be inferred from the terms of the Agreement that the parties intended to
be bound by Philippine law on its intrinsic validity (this is evident, for instance,
from the stipulation selecting Philippine courts as exclusive forum to settle "any
legal issue or dispute that may arise from the provisions of [the] Agreement and
its interpretation x x x" (Records, p. 19; emphasis supplied). At any rate,
Philippine law has the most substantial connection to the contract, considering its
object (custody of a Filipino-American child), subject (Filipino-American child
under seven years of age, born of a Filipino mother, both of whom reside in the
country) and parties (Filipina mother and alien father).
14

Including those marriages whose vinculum has been severed (see Sempio-Dy,
Handbook on the Family Code of the Philippines 67-68 [1988]).
15

The provision states: "In case of separation of the parents, parental authority
shall be exercised by the parent designated by the Court. 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.
16

No child under seven years of age shall be separated from the mother,
unless the court finds compelling reasons to order otherwise." (Emphasis
supplied)
Gamboa-Hirsch v. Court of Appeals (Res.), G.R. No. 174485, 11 July 2007, 527
SCRA 320 (reversing the Court of Appeals ruling mandating joint custody and
awarding sole custody to the mother).
17

Perez v. Court of Appeals, 325 Phil. 1014 (1996). For children over seven,
custody decisions are guided by the standard of "best interest of the child."
18

Our discussion in Pablo-Gualberto v. Gualberto V, G.R. No. 154994, 28 June

2005, 461 SCRA 450, 471-472, on the statutory genealogy and policy grounding
of the second paragraph of Article 213 is enlightening:
19

[A]rticle 213 takes its bearing from Article 363 of the Civil Code, which
reads:

Sole maternal custody is denied only for "compelling reasons" such as

"neglect, abandonment, unemployment, immorality, habitual drunkenness, drug
addiction, maltreatment of the child, insanity or affliction with a communicable
disease" (Id. at 476; internal citation omitted).
20

21

Civil Code, Article 211, as amended.

22

See note 20.

23

See note 19.

24

Id.

This line of argument can be subsumed under the rubric of "unfair state
intervention" but this complaint can very well be leveled against the entire field of
family law where the state injects itself on a host of areas impinging on the
decision-making capacity and autonomy of individuals ranging from the intensely
personal (e.g. who can marry [Article 5, Family Code], where to marry [Article 5,
Family Code], who can celebrate the marriage [Article 5, Family Code], and how
to relate to ones spouse [Articles 68-72]) to proprietary (e.g. Articles 74-125,
Family Code, on property relations of spouses and Articles 194-208, Family
Code, on support) to familial (e.g. Articles 209-233, Family Code, on parental
authority).
25

1avvph!1

Art. 363. In all questions on the care, custody, education and property of
children, the latters welfare shall be paramount. No mother shall be
separated from her child under seven years of age, unless the court finds
compelling reasons for such measure.
The general rule that children under seven years of age shall not be
separated from their mother finds its raison detre in the basic need of
minor children for their mothers loving care. In explaining the rationale
for Article 363 of the Civil Code, the Code Commission stressed thus:

Petitioner hooks his argument on Gonzales v. Gonzales (58 Phil. 67 [1933]),

Arca v. Javier (95 Phil. 579 [1954]) and Tenchavez v. Escao (122 Phil. 752
[1965]). These cases, involving Filipino spouses, merely applied the "nationality
rule" (now embodied in Article 15 of the Civil Code) to reject validating foreign
divorce decrees obtained by Filipino spouses to circumvent the no-divorce rule in
this jurisdiction. They are no authority to support petitioners submission that as
to aliens, foreign divorce decrees are void here.
26

27

The general rule is recommended in order to avoid a tragedy where a

mother has seen her baby torn away from her. No man can sound the
deep sorrows of a mother who is deprived of her child of tender age. The
exception allowed by the rule has to be for compelling reasons for the
good of the child: those cases must indeed be rare, if the mothers heart
is not to be unduly hurt. If she has erred, as in cases of adultery, the
penalty of imprisonment and the (relative) divorce decree will ordinarily
be sufficient punishment for her. Moreover, her moral dereliction will not
have any effect upon the baby who is as yet unable to understand the
situation. (Report of the Code Commission, p. 12)

223 Phil. 357 (1985).

Id. at 361-363.Van Dornspawned the second paragraph of Article 26 granting to

Filipino spouses of aliens who obtain foreign divorce decrees the right to remarry.
(Republic v. Orbecido III, G.R. No. 154380, 5 October 2005, 472 SCRA 114).
28

29

G.R. No. 80116, 30 June 1989, 174 SCRA 653.

30

Bagtas v. Santos, G.R. No. 166682, 27 November 2009.

Thus, in habeas corpus proceedings involving child custody, judicial resolutions

extend beyond the custodial right of persons exercising parental authority over
the child and reach issues on custodial arrangements serving the childs best
interest (see Bagtas v. Santos, id., remanding a habeas corpus petition to
determine the fitness of the legal custodians notwithstanding that the question of
illegal withholding of custody has been mooted by the transfer of the childs
physical custody to the habeas corpus petitioners).
31

The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION
ABAD, J.:
I agree with the reasons that the majority of the Court gave in support of the decision,
except one. I am uncomfortable with the proposition that an agreement between the
mother and the father on a joint custody over a child below seven years of age is void for
being contrary to law and public policy. True, the law provides in Article 363 of the Civil
Code that "No mother shall be separated from her child under seven years of age,
unless the court finds compelling reasons for such measure." The State can think up
ways of protecting the child. But the 1987 Constitution acknowledges in Article II, Section
12, the natural and primary right and duty of parents to nurture their children and that the
State must support them in this respect.1
I submit that, in the matter of child custody, the mutual will of the childs parents takes
precedence in the absence of circumstances that justify recourse to the law. The law
becomes relevant, only as a default, if a separated couple cannot agree on the custody
of their child. The law should not supplant parental discretion or unnecessarily infringe on
parental authority.
Parents have a natural and fundamental right to autonomy in the care, custody, and
upbringing of their children. The Family Code recognizes this in Article 209:
Art. 209. Pursuant to the natural right and duty of parents over the person and property
of their unemancipated children, parental authority and responsibility shall include the
caring for and rearing them for civic consciousness and efficiency and the development
of their moral, mental and physical character and well-being. (n)

The State ought not to interfere with the right of parents to bring up their child unless its
exercise causes potential harm to him. The State steps in, through the law, only if there
are compelling reasons to do so. State intrusion is uncalled for where the welfare of a
child is not jeopardized.
Regardless of marital circumstances, the mother and the father are presumed to be fit
and competent to act in the best interest of their child. They can agree to share parental
authority or, if you will, parental custody even as they decide to live under separate roofs.
In a voluntary joint custody the mother might want to keep the child in her home during
schooldays but allow the father to have him on weekends. And they could agree on some
device for arriving at a consensus on where the child will study and how his spiritual
needs are to be attended to.
The law does not take away from a separating couple the authority and competence to
determine what is best for their child. If they resolve on their own that shared parental
custody is in their childs best interest, then the law and the courts have no business
vetoing their decision. The parents enjoy a primary right to make such decision. I cannot
concede that, where the child is below seven years of age, any agreement that
diminishes the mothers absolute custody over him is void.
The second paragraph of Article 213 of the Family Code should not be read as
prohibiting separated couples from agreeing to a custody arrangement, other than sole
maternal custody, for their child of tender age. The statutory preference for the mothers
custody comes into play only when courts are compelled to resolve custody fights
between separated parents. Where the parents settle the matter out of court by mutual
agreement, the statutory preference reserved to the mother should not apply.
A reading of the entire text of Article 213 shows that the second paragraph applies only
to custody disputes that have reached the courtroom. Thus:
Article 213. In case of separation of the parents, parental authority shall be exercised by
the parent designated by the Court. 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.
No child under seven years of age shall be separated from the mother, unless the court
finds compelling reasons to order otherwise.
It is unmistakable that the legislative policy is to vest the separated mother with physical
custody of the child under seven years old, in cases where the courts are called upon to
designate a parent for the exercise of parental authority. The second sentence of the first
paragraph and the second paragraph itself merely qualify the general rule expressed in

the first sentence that "parental authority shall be exercised by the parent designated by
the Court," in case of parental separation.
In choosing the parent who will exercise parental authority, the court must take into
account all relevant considerations. One of these is the childs age, as the court is
directed to give due regard to the childs choice, if the child is more than seven years of
age. If the child, however, is below seven years of age, the court cannot separate the
child from the mother, except for compelling reasons. This is the import of the entire
provision.
Thus, no legislative policy is violated if separated parents are allowed to voluntarily agree
to a child custody arrangement other than sole maternal custody. It is not the policy of
the state to prohibit separated parents from compromising on child custody even if the
child is of tender age. On the contrary, voluntary custody agreements are generally
favored as it can only work for the best interest of the child.
It is not logical to say that the Court would be subverting the legislative policy of avoiding
"a tragedy where a mother has seen her baby torn away from her" if separated parents
are allowed to enter into a joint custody agreement. It can hardly be said that a child is
being "torn away" from the mother, if the mother sees the wisdom and benefit of sharing
custody of the child with the father. The voluntary nature of the agreement negates any
"deep sorrow" or sense of deprivation that the mother may experience on account of her
separation from the child.
Consequently, if separated parents mutually stipulate to uphold some form of joint
authority over their children of tender age, it cannot in any way be regarded as illegal or
contrary to public policy. Joint parental authority and custody is the norm and should be
viewed as the more desirable custody arrangement. It encourages continuing contact
with and involvement of both parents in the lives of their children. It can only redound to
the minors greater well-being and should thus be favored.
To declare that a joint custody agreement over minors of tender age contravenes
Philippine laws will only discourage separating couples from sharing parental duties and
responsibilities. It will render shared parenthood illegal and unduly promote paternal
alienation. It also presumes that separated parents cannot cooperate and compromise
for the welfare of their children. It constitutes undue interference in the parents intrinsic
right to direct their relations with their child.

A joint custody agreement can of course never be regarded as permanent and

unbending. The situations of the mother or the father and even of the child can change
and render performance of such agreement no longer in the latters best interest. If the
parents disagree on what they think is best for the child, recourse to the Court may be
inevitable. But I suggest that the parent who wants the joint custody agreement changed
or set aside bears the burden of showing to the court the new situations of the parties
and how such arrangement have become unfavorable or detrimental to the child under
the circumstances. This is a consequence of the presumption that contracts that are valid
remain valid unless shown otherwise.
Here, the agreement between petitioner Herald and his estranged wife providing for joint
custody of their then six-year-old child is a valid exercise of parental discretion and
authority. It is independent of the foreign divorce decree and may be enforced or
repudiated in this jurisdiction, since its object is the custody of a Filipino-American minor
residing in the Philippines. Although Heralds complaint before the trial court appears to
be one for specific performance, it is, at heart, an action for custody and enforcement of
parental rights. Being so, the Regional Trial Courts have exclusive original jurisdiction
over the action.
I concur in the decision subject to my above reservations.
ROBERTO A. ABAD
Associate Justice