CITIZENSHIP & DUAL NATIONALITY

I. Introduction

In the study of choice of law, citizenship and nationality are synonymous and interchangeable concepts
which indicate ties of allegiance and loyalty. It is defined as the membership of a person in a particular state
which brings with it the duties of loyalty and allegiance and entitlement to its protection and to the enjoyment of
civil and political rights therein. According to the Hague Convention on Conflict of Nationality Laws of 1930,
Any question as to whether a person possesses the nationality of a particular state should be determined in
accordance with the law of that state. Article IV of the 1987 Constitution of the Philippines determines who
Filipino citizens are. Hence, each country or state has the sole power and authority to determine under its internal
or municipal law who its citizens and nationals are.

II. Hague Convention on Certain Questions Relating to the Conflict of Nationality Laws

Some of the guiding principles enunciated in the Hague Convention on Certain Questions Relating to
Conflict Nationality Laws:

Article 1

It is for each State to determine under its own law who are its nationals. This law shall be
recognised by other States in so far as it is consistent with international conventions,
international custom, and the principles of law generally recognized with regard to
nationality.

Article 2

Any question as to whether a person possesses the nationality of a particular State shall
be determined in accordance with the law of that State.

Article 3

Subject to the provisions of the present Convention, a person having two or more
nationalities may be regarded as its national by each of the States whose nationality he
possesses.

Article 4

A State may not afford diplomatic protection to one of its nationals against a State whose
nationality such person also possesses.

Article 5

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 Within a third State, a person having more than one nationality shall be treated as if he
had only one. Without prejudice to the application of its law in matters of personal status
and of any conventions in force, a third State shall, of the nationalities which any such
person possesses, recognise exclusively in its territory either the nationality of the
country in which he is habitually and principally resident, or the nationality of the
country with which in the circumstances he appears to be in fact most closely connected.

Article 6

Without prejudice to the liberty of a State to accord wider rights to renounce its
nationality, a person possessing two nationalities acquired without any voluntary act on
his part may renounce one of them with the authorization of the State whose nationality
he desires to surrender. This authorization may not be refused in the case of a person
who has his habitual and principal residence abroad, if the conditions laid down in the
law of the State whose nationality he desires to surrender are satisfied.

III. The Nationality Theory

A person's citizenship is relevant to the determination of the personal law or the law that should
govern status and capacity of an individual. Moreover, the nationality of a party litigant is one of the
circumstances taken into account in determining the applicable law in a conflict of laws situation.

Article 15 of the Civil Code adopts the nationality principle. Thus, pursuant to Article 15,
Philippine laws relating to the family rights and obligations and status, condition and legal capacity of
persons, accompany a Filipino citizen although he may reside in a different country.

The second paragraph of Article 16 of the Civil Code states that Intestate and testamentary
succession, both with respect to the order of succession and to the amount of successional rights and to
the intrinsic validity of testamentary provisions shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the nature of the property and regardless of
the country wherein said property may be found. The national law refers to the private law of the state
of which the decedent was a citizen. 1

IV. Citizens of the Philippines

Filipino citizens are either natural-born citizens or naturalized citizens. This may be gleaned
Section 1 Article IV of the 1987 Constitution:
1. Those who are citizens of the Philippines at the time of the adoption of the 1987 Constitution,
2. Those whose fathers or mothers are citizens of the Philippines,

1
Aznar v. Garcia, 7 SCRA 95 [1963].

2
 3. Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship
upon reaching the age of majority, and
4. Those who are naturalized in accordance with the law.

A. Natural Born Citizenship

Section 2, Article IV of the 1987 Constitution defines natural born citizens to be those who
are citizens of the Philippines without having to perform any act or perform any act to acquire or
perfect their Philippine citizenship.

There are two guiding principles respecting acquisition of citizenship at birth: Jus
sanguinis and jus soli. A person acquires citizenship thru jus soli by being born within the territorial
boundaries of a state. On the other hand, citizenship thru jus sanguinis is acquired through blood
relationship with the parent. This is the rule that we follow in the Philippines: those whose fathers or
mothers, or both parents are Filipino citizen, is a Filipino citizen.

In the case of Valles v. COMELEC2, petitioner maintained that private respondent is an

Australian citizen, not qualified to run for elective office, because: she is a holder of an Australian
passport; and she expressly renounced her Filipino citizenship when she declared under oath in her
application for alien certificate of registration and immigrant certificate of residence that she was a
citizen or subject of Australia.SC maintained that the private respondent, Rosalind Ybasco Lopez, is
a Filipino citizen, having been born to a Filipino father. The fact of her being born in Australia is not
tantamount to her losing her Philippine citizenship. If Australia follows the principle of jus soli, then
at most, private respondent can also claim Australian citizenship resulting to her possession of dual
citizenship. A similar conclusion was reached in the case of Maria Jeanette Tecson v. COMELEC 3
on the controversy surrounding the citizenship of Fernando Poe, Jr. (FPJ), presidential candidate.

Under Section 4 Art IV of the 1987 Constitution, citizens of the Philippines who marry
aliens shall retain their citizenship, unless by their act or omission they are deemed under the law,
to have renounced it.

B. Election of Citizenship

Commonwealth 625 which was enacted pursuant to the 1935 Constitution, prescribes the
procedure for a valid lection of Philippine citizenship. He must express such intention in a

2
Valles v. Commission on Elections, 392 PHIL 327-342 [2000].
3
Maria Jeanette Tecson v. COMELEC, GR No. 161434 [2004].

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 statement to be signed and sworn to by the party concerned before any officer authorized to
administer oath. The sworn statement shall be filed, together with oath of allegiance to the
Philippine Constitution, with the nearest civil registry. The election must be made within a
reasonable time (3 years) from reaching the age of majority.

The procedure for election is mandatory. Thus, in Republic v. Sagun 4 respondent clearly
failed to comply with the procedural requirements for a valid and effective election of
Philippine citizenship. Respondent cannot assert that the exercise of suffrage and the participation
in election exercises constitutes a positive act of election of Philippine citizenship since the law
specifically lays down the requirements for acquisition of citizenship by election. The mere
exercise of suffrage, continuous and uninterrupted stay in the Philippines, and other similar acts
showing exercise of Philippine citizenship cannot take the place of election of
Philippine citizenship. As the Supreme Court decided in the case of Ching5 the prescribed
procedure in electing Philippine citizenship is certainly not a tedious and painstaking process. All
that is required of the elector is to execute an affidavit of election of Philippine citizenship and,
thereafter, file the same with the nearest civil registry. Having failed to comply with the foregoing
requirements, respondent's petition before the trial court must be denied.

Presently, election of citizenship as a mode of acquiring citizenship has been eliminated

due to the passage of time. It was a transitory law in such a manner that it was effective only as
long as there were children of Filipino mothers and alien fathers who were allowed to elect
Philippine citizenship upon reaching 21 years old. After 1994, there were no long those who could
elect Philippine citizenship, as they have already reached the age of majority, who either elected or
did not elect at all.

C. Naturalization

Naturalization is the process of conferring on an alien the citizenship of another country, by

any means provided by law. It is an act formally adopting a foreigner into the political bod of a
nation by clothing him or her with the privileges of a citizen.6Under current and existing laws,
there are two modes by which an alien may become a citizen by naturalization: direct and
derivative.

1. Direct Naturalization

4
Republic v. Sagun682 PHIL 303-317 [2012].
5
Re: Application for Admission to the Philippine Bar of Vicente D. Ching B.M. No. 914 374 PHIL 342-355 [1999].
6
Record, Senate, 12th Congress [2001].

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Under current and existing laws, there are three ways by which an alien may become a citizen based on
requirements:

a. By juridical process under Commonwealth Act 473;

Under Commonwealth Act 473, the following are the qualifications to apply for
judicial naturalization: (1) He must be not less than twenty-one years of age on
the day of the hearing of the petition; (2) He must have resided in the
Philippines for a continuous period of not less than ten years; (3) He must be of
good moral character and believes in the principles underlying the Philippine
Constitution, and must have conducted himself in a proper and irreproachable
manner during the entire period of his residence in the Philippines in his relation
with the constituted government as well as with the community in which he is
living. (4) He must own real estate in the Philippines worth not less than five
thousand pesos, Philippine currency, or must have some known lucrative trade,
profession, or lawful occupation; (5) He must be able to speak and write English
or Spanish and any one of the principal Philippine languages; and (6). He must
have enrolled his minor children of school age, in any of the public schools or
private schools recognized by the Office of Private Education of the Philippines,
where the Philippine history, government and civics are taught or prescribed as
part of the school curriculum, during the entire period of the residence in the
Philippines required of him prior to the hearing of his petition for naturalization
as Philippine citizen.

A declaration of intention must be filed one year prior to the filing of petition
with the Solicitor General. The filing of the petition must be accompanied by the
affidavit of two character witnesses. The petition shall be published. Publication
is a jurisdictional requirement. Non-compliance is fatal for it impairs the very
root or foundation of the authority to decide the case, regardless of whether the
one to blame is the clerk of court or the petitioner or his counsel. 7 Thereafter, a
hearing of the petition shall take place, and a promulgation of the decision. After
two years, a hearing shall be conducted wherein petitioner shall show that
during the two-year probation, applicant has not left the Philippines, dedicated
himself to a lawful calling, not convicted and not committed any act prejudicial
to the interest of the nation or contrary to any Government announced policies.

7
Gan Tsitung v. Republic, 122 Phil. 805

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 Naturalization vests on the wife if she does not possess any of the
disqualifications. In Mo Ya Lim Yao 8, the alien wife of a Filipino need not go
through the formal process of naturalization in order to acquire Philippine
citizenship. All she had to do was to file before the Bureau of Immigration and
Deportation a petition for the cancellation of her Alien Certificate of
Registration (ACR). Upon the grant of the petition for cancellation of ACR, she
may take the oath of allegiance to the Republic of the Philippines, and thus
become a citizen of the Philippines.

b. By legislative process

This is in the form of a law enacted by Congress bestowing citizenship upon an

alien. It is discretionary on Congress, and usually conferred on an alien who has
made outstanding contributions to the country.

c. By administrative process pursuant to The Administrative Naturalization

Law of 2000.

R.A. No. 9139 was enacted as a remedial measure intended to make the process
of acquiring Philippine citizenship less tedious, less technical and more
encouraging. It likewise addresses the concerns of degree holders who, by
reason of lack of citizenship requirement, cannot practice their profession, thus
promoting brain drain for the Philippines. 9

C.A. No. 473 and R.A. No. 9139 are separate and distinct laws the former
covers all aliens regardless of class while the latter covers native-born aliens
who lived here in the Philippines all their lives, who never saw any other
country and all along thought that they were Filipinos; who have demonstrated
love and loyalty to the Philippines and affinity to the customs and traditions. To
reiterate, the intention of the legislature in enacting R.A. No. 9139 was to make
the process of acquiring Philippine citizenship less tedious, less technical and
more encouraging which is administrative rather than judicial in nature. Thus,
although the legislature believes that there is a need to liberalize the
naturalization law of the Philippines, there is nothing from which it can be
inferred that C.A. No. 473 was intended to be amended or repealed by R.A. No.
9139. What the legislature had in mind was merely to prescribed another mode

8
MoyYa Lim Yao vs. Commissioner of immigration 41 SCRA 292 [1971].
9
So v. Rep., G.R. No. 170603, [2007]

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 of acquiring Philippine citizenship which may be availed of by native born
aliens. The only implication is that, a native born alien has the choice to apply
for judicial or administrative naturalization, subject to the prescribed
qualifications and disqualifications.

2. Derivative Naturalization

Derivative naturalization is Philippine citizenship conferred on the wife of a

naturalized husband, the minor children of a naturalized father, and the alien wife of a
natural born or naturalized citizen. Thus, in Republic v. Batuigas 10, under existing laws,
an alien may acquire Philippine citizenship through either
judicial naturalization under CA473 oradministrative naturalization under Republic Act
No. 9139 (the "Administrative Naturalization Law of 2000"). A third option,
called derivative naturalization, which is available to alien women married to Filipino
husbands is found under Section 15 of CA 473, which provides that:

"Any woman who is now or may hereafter be married to a citizen of the

Philippines and who might herself be lawfully naturalized shall be
deemed a citizen of the Philippines."

Under this provision, foreign women who are married to Philippine citizens may
be deemed ipso facto Philippine citizens and it is neither necessary for them to prove that
they possess other qualifications for naturalization at the time of their marriage nor do
they have to submit themselves to judicial naturalization. Copying from similar laws in
the United States which has since been amended, the Philippine legislature retained
Section 15 of CA 473, which then reflects its intent to confer Filipino citizenship to the
alien wife thru derivative naturalization.

V. Dual citizenship and Dual allegiance

Dual citizenship means the status of a person who is a citizen of two or more countries at the same
time. It arises when as a result of the concurrent application of the different of laws of two or more
states, a person is simultaneously considered as a national by the said states. The problem of dual
citizenship of Filipino would arise only from the point of view of the third state. The theory of
effective nationality, which shall be applied in by the third state in determining the citizenship of an
individual, is embodied in Article 5 of the Hague Convention on Conflicts of Nationality of Laws.

10
Republic v. Batuigas719 PHIL 20-36 [2013]

7
 Section 5 of Article IV of the 1987 Constitution provides that dual allegiance is inimical to the
national interest and shall be dealt with by law. This shall not mean however, that dual citizenship is
prohibited by law. Dual citizenship cannot be avoided due to the diverse laws of the countries of the
world. The concern of the aforementioned provision is only with regard to those naturalized citizens of
the Philippines who still maintain their allegiance to their countries of origin.

In the case of Mercado v. Manzano11 , the Supreme Court clarified the dual citizenship
disqualification in Section 40 of the Local Government Code, and reconciled the same with dual
allegiance. Recognizing situations in which a Filipino citizen may, without performing any act and as
an involuntary consequence of the conflicting laws of different countries, be also a citizen of another
state, the Court explained the dual citizenship as a disqualification must refer to citizens with dual
allegiance. It shall be enough for the candidates with dual citizenship to elect Philippine citizenship
upon filing of a certificate of candidacy to terminate their status as persons with dual citizenship. Thus
by declaring in his certificate of candidacy that he is a Filipino citizen; that he is not a permanent
resident or immigrant of another country; that he will defend and support the Constitution of the
Philippines and bear true faith and allegiance thereto and that he does so without mental reservation,
private respondent has, as far as the laws of this country are concerned, effectively repudiated his
American citizenship and anything which he may have said before as a dual citizen.

A different rule applies to a person who, after having reacquired Philippine citizenship under RA
9225, shall run for public office. In Lopez v. COMELEC 12, the Supreme Court maintained that it is
necessary that the candidate for public office must state in unequivocal and clear terms that he is
renouncing all foreign citizenship.

VI. Expatriation

Section 3, Article IV of the Constitution sanctions the expatriation of Philippine citizens by

the commission of expatriating acts and gives the State the power to strip the people of their
citizenships. Expatriation is the commission of an act that results in the loss of citizenship. Under
Commonwealth Act No. 63, a citizen may lose his citizenship by the commission of any of the
following acts:

1. By naturalization in a foreign country;

2. By express renunciation of citizenship;
3. By subscribing to an oath of allegiance to support the constitution or laws of a foreign country
upon attaining twenty-one years of age or more: Provided, however, That a Filipino may not

11
Mercado v. Manzano 307 SCRA 620 [1999].
12
Lopez v. COMELEC GR no. 18701 [2008].

8
 divest himself of Philippine citizenship in any manner while the Republic of the Philippines is
at war with any country;
4. By rendering services to, or accepting commission in, the armed forces of a foreign country:
Provided, That the rendering of service to, or the acceptance of such commission in, the
armed forces of a foreign country, and the taking of an oath of allegiance incident thereto,
with the consent of the Republic of the Philippines, shall not divest a Filipino of his
Philippine citizenship if either of the following circumstances is present:
a. The Republic of the Philippines has a defensive and/or offensive pact of alliance
with the said foreign country; or
b. The said foreign country maintains armed forces on Philippine territory with the
consent of the Republic of the Philippines: Provided, That the Filipino citizen
concerned, at the time of rendering said service, or acceptance of said commission,
and taking the oath of allegiance incident thereto, states that he does so only in
connection with his service to said foreign country: And provided, finally, That any
Filipino citizen who is rendering service to, or is commissioned in, the armed forces
of a foreign country under any of the circumstances mentioned in paragraph (a) or
(b), shall not be permitted to participate nor vote in any election of the Republic of
the Philippines during the period of his service to, or commission in, the armed
forces of said foreign country. Upon his discharge from the service of the said
foreign country, he shall be automatically entitled to the full enjoyment of his civil
and political rights as a Filipino citizen;
5. By cancellation of the of the certificates of naturalization;
6. By having been declared by competent authority, a deserter of the Philippine armed forces in
time of war, unless subsequently, a plenary pardon or amnesty has been granted; and
7. In the case of a woman, upon her marriage to a foreigner if, by virtue of the laws in force in
her husband's country, she acquires his nationality.1

However, under Sec. 4, Article IV of the 1987 Constitution, it is no longer expatriating unless
they categorically renounce their Philippine citizenship. In Board of Immigration Commissioners
v. Callano13, Section 1 of Commonwealth Act No. 63, as amended by Republic Act No. 106,
provides the ways in which a Filipino citizen may lose his citizenship. Recognition of the
petitioners by their alien father is not among the ground for losing Philippine citizenship under
Philippine law, and it cannot be said that the petitioners lost their former status by reason of such
recognition. About the only mode of losing Philippine citizenship which closely bears on the
petitioners is renunciation. But even renunciation cannot be cited in support of the conclusion that
petition lost their Philippine citizenship because the law requires an express renunciation which

13
Board of Immigration Commissioners vs. Go Callano 25 SCRA 890 (1968)

9
 means a renunciation that is made known distinctly and explicitly and not left to inference or
implication; a renunciation manifested by direct and appropriate language, as distinguished from
that which is inferred from conduct.

VII. Loss and Reacquisition of Citizenship

A. Reacquisition v. Retention

There are two groups of beneficiaries under Republic Act No. 9225. To the first group
belong those who naturalized in a foreign country before the effectivity of RA 9225. To the
second group belong those who naturalized in a foreign country after the effectivity of RA 9225.
Beneficiaries who belong to the first group are deemed to reacquire their Philippine citizenship
upon taking the oath of allegiance to the Republic. Those who belong to the second group are
deemed to retain their Philippine citizenship upon taking the same oath of allegiance.

B. RA 9225: Citizenship Retention & Reacquisition Act

Congress enacted Republic Act No. 9225 to enable former Filipino citizens who have
since naturalized in a foreign country to reacquire their Filipino citizenships without losing their
present citizenships. This law allows former Filipino citizens to repatriate themselves by taking
the oath of allegiance to the Republic of the Philippines without, however, renouncing their
present citizenships. What is more, this law grants derivative Filipino citizenship to the unmarried
children below 18yrs of age of those availing of its benefits. This privilege comes with no
qualification that the child should have stayed in the Philippines for a number of years or that the
child makes a choice of citizenship.

Republic Act No. 9225 is also an indication that the State no longer places that much
value on unitary citizenship. The Philippines is following a growing trend among nations of
allowing their citizens to possess dual or multiple citizenships. Thus, this law appears to weaken
Commonwealth Act No. 63 insofar as it negates the effects of an expatriating act, like the act of
naturalization, as former Filipinos may now repatriate themselves.

Republic Act No. 9225 also makes it a state policy that those who naturalize in other
countries after the laws effectivity are deemed to retain their Filipino citizenships upon their
taking the oath of allegiance to the Republic.

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 Filipinos who repatriate themselves under RA No. 9225 are deemed to be natural-born citizens of
the Philippines for they do not have to perform any act to acquire or perfect their citizenship14.This
status of being a natural-born citizen retroacts to the day when they were born.

The pertinent provisions of Republic Act No. 9225 are as follows:

Section 2. Declaration of Policy - It is hereby declared the policy of the State that all
Philippine citizens of another country shall be deemed not to have lost their Philippine
citizenship under the conditions of this Act.

Section 3. Retention of Philippine Citizenship - Any provision of law to the contrary

notwithstanding, natural-born citizenship by reason of their naturalization as citizens of
a foreign country are hereby deemed to have re-acquired Philippine citizenship upon
taking the following oath of allegiance to the Republic:

"I _____________________, solemny swear (or affrim) that I will support and
defend the Constitution of the Republic of the Philippines and obey the laws and
legal orders promulgated by the duly constituted authorities of the Philippines;
and I hereby declare that I recognize and accept the supreme authority of the
Philippines and will maintain true faith and allegiance thereto; and that I
imposed this obligation upon myself voluntarily without mental reservation or
purpose of evasion."

Natural born citizens of the Philippines who, after the effectivity of this Act, become
citizens of a foreign country shall retain their Philippine citizenship upon taking the
aforesaid oath.

Section 4. Derivative Citizenship - The unmarried child, whether legitimate, illegitimate

or adopted, below eighteen (18) years of age, of those who re-acquire Philippine
citizenship upon effectivity of this Act shall be deemed citizenship of the Philippines.

Section 5. Civil and Political Rights and Liabilities - Those who retain or re-acquire
Philippine citizenship under this Act shall enjoy full civil and political rights and be
subject to all attendant liabilities and responsibilities under existing laws of the
Philippines and the following conditions:

14
Bengson III vs. HRET, G.R. No. 142840 [2001].

11
 1. Those intending to exercise their right of suffrage must meet the
requirements under Section 1, Article V of the Constitution, Republic Act
No. 9189, otherwise known as "The Overseas Absentee Voting Act of 2003"
and other existing laws;
2. Those seeking elective public office in the Philippines shall meet the
qualification for holding such public office as required by the Constitution
and existing laws and, at the time of the filing of the certificate of
candidacy, make a personal and sworn renunciation of any and all foreign
citizenship before any public officer authorized to administer an oath;
3. Those appointed to any public office shall subscribe and swear to an oath of
allegiance to the Republic of the Philippines and its duly constituted
authorities prior to their assumption of office: Provided, That they renounce
their oath of allegiance to the country where they took that oath;
4. Those intending to practice their profession in the Philippines shall apply
with the proper authority for a license or permit to engage in such practice;
and
5. That right to vote or be elected or appointed to any public office in the
Philippines cannot be exercised by, or extended to, those who:

a. are candidates for or are occupying any public office in the

country of which they are naturalized citizens; and/or
b. are in active service as commissioned or non-commissioned
officers in the armed forces of the country which they are
naturalized citizens.

C. Memorandum Circular No. AFF .05002

Memorandum Circular No. AFF. 05002 supplemented RA No. 9225 and provided for the
procedures in the reacquisition of Philippine citizenship. Moreover, it clarified that a child who
has been aged-out (beyond 18 years of age) may still be the beneficiary of Republic Act No. 9225
so long as he was born when either or both of her parents was still a Filipino citizen. However, he
must apply for reacquisition on his own behalf, and no longer as a derivative beneficiary.

Republic Act No. 9225 also benefits adopted children who are minors when they were
adopted by their Filipino parents. The nationality of the adopted children does not matter as the
source of their right to become Filipino is the nationality of their adopting parents.When travelling
between countries, beneficiaries of Republic Act No. 9225 can use either use their foreign
passports or Philippine passport. However, at the Philippine immigration counter, they must

12
 present their Philippine passport to facilitate their entry in the Philippines as nationals hereof
rather than as aliens.

Since they are natural-born citizens once more, they are also restored to their civil and
political rights. Hence, they can acquire properties without limitations just like ordinary natural-
born Filipinos. They can practice their professions, including the right to practice law as well as
the right to take the bar exams. They can also exercise their right to vote and to be voted for as
they are also restored to their political rights subject to certain limitations provided for by law.

In Jacot v. Dal15 it was discussed that Section 5(2) of Republic Act No. 9225 compels
natural-born Filipinos, who have been naturalized as citizens of a foreign country, but who
reacquired or retained their Philippine citizenship:
1. To take the oath of allegiance under Section 3 of RA No. 9225, and
2. For those seeking elective public offices in the Philippines, to additionally execute a
personal and sworn renunciation of any and all foreign citizenship before an authorized
public officer prior or simultaneous to the filing of their certificates of candidacy to
qualify as candidates in Philippine elections.

The oath of allegiance contained in the Certificate of Candidacy, which is substantially

similar to the one contained in Sec. 3 of R.A. No. 9225 does not constitute the personal and
sworn renunciation sought under Sec. 5(2) of R.A. No. 9225.

However, a it was discussed in Maquiling v. COMELEC16 that the use of foreign

passport after renouncing ones foreign citizenship is a positive and voluntary act of
representation as to ones nationality and citizenship; it does not divest Filipino citizenship
regained by repatriation but it recants the Oath of Renunciation required to qualify one to run
for an elective position. The citizenship requirement for elective public office is a continuing
one. It must be possessed not just at the time of the renunciation of the foreign citizenship but
continuously. Any act which violates the oath of renunciation opens the citizenship issue to
attack.

D. RA 9225 and US Citizenship

For Filipinos who have since naturalized as Americans and who want to reacquire their
Philippine citizenship under RA 9225, they can do so without worrying that they might be stripped

15
JACOT vs. DAL G.R. No. 179848 [2008].
16
Maquiling vs. COMELEC G.R. No. 195649 [2013]

13
 of their U.S. citizenships. While taking an oath of allegiance to a foreign state is expatriating, the
presumption under current State Department rules is that the person intended to retain his U.S.
citizenship. The U.S. citizen need only answer no to the question of a consular officer if he
intended to relinquish his U.S. citizenship. With such negative answer, the person is deemed to
retain his U.S. citizenship.

United States citizenship is a cherished commodity. Unlike Philippine laws which readily
sanctions the loss of Philippine citizenship, U.S. law and jurisprudence make expatriation a
difficult, if not impossible, proposition. This was not formerly the case, however, as earlier U.S.
jurisprudence sanctioned the loss of U.S. nationality by the simple performance of an expatriating
act. The earlier view was that the State had the power to strip a person of his citizenship based on
the foreign relations power of Congress.

VIII. Practice of Profession

The practice of profession is an activity or undertaking rendered by a registered and

licensed professional or a holder of special temporary permit as defined in the scope of practice of a
professional regulatory law.

Section 14 Article XII of the 1987 Constitution provides: "The sustained development of
a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers,
high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the
State. The State shall encourage appropriate technology and regulate its transfer for the national
benefit.The practice of all professions in the Philippines shall be limited to Filipino citizens, save in
cases prescribed by law. "

The practice of profession is a privilege and is therefore restricted to Philippine citizens.

While a foreigner is allowed to practice his profession in our country, he must first seek a license or
permit from the government authority. Thus, In Re: Petition to Re-Acquire the Privilege to Practice
Law in the Philippines17, petitioner Epifanio B. Muneses became a member of the Integrated Bar of the
Philippines in 1966 but lost that privilege when he became a U.S. citizen on August 28, 1981. He
thereafter reacquired his Philippine citizenship under RA 9225 which raised the issue of whether or not
he may be permitted by the Supreme Court for him to resume the practice of law. The Court reiterated
that Filipino citizenship is a requirement for admission to the bar and is, in fact, a continuing
requirement for the practice of law. The loss thereof means termination of the petitioners membership
to the bar; ipso jure the privilege to engage in the practice of law. Under RA 9225, natural born
citizens who have lost their Philippine citizenship by reason of their naturalization as citizens of a

17
In Re: Petition to Re-Acquire the Privilege to Practice Law in the Philippines BM 2112 [2012].

14
foreign country are deemed to have re-acquired their Philippine citizenship upon taking the oath of
allegiance to the Republic. Thus, a Filipino lawyer who becomes a citizen of another country and later
re-acquires his Philippine citizenship under RA 9225, remains to be a member of the Philippine Bar.

However, the right to resume the practice of law is not automatic. RA 9225 provides thatperson
who intends to practice his profession in the Philippines must apply with the proper authority for a
license or permit to engage in such practice.

A. Alien Employment Permit

It is a document issued by the Department of Labor and Employment which authorizes a

foreign national to work in the Philippines. All foreign nationals who intend to engage in gainful
employment in the Philippines. Foreign professionals who are allowed to practice their profession
in the Philippines under reciprocity and other international agreements and consultancy services
pursuant to Section 7(j) of the PRC Modernization Act of 2000. Holders of Special Investors
Resident Visa, Special Retirees Resident Visa, Treaty Traders Visa or Special Non-Immigrant
Visa for as long as they occupy any executive, advisory, supervisory, or technical position in any
establishment.

B. Regulation of Practice of Profession of Foreigners in the Philippines

It is the Supreme Court which is constitutionally mandated under Article VIII, Section
5(5) to promulgate rules on the practice of law and admission to the bar. In this regard, Rule 138
of the Rules of Court states that only Filipino citizens may be admitted to the Philippine bar and
therefore practice law.

Practice of law - any activity, in or out of court, which requires the application of law,
legal procedure, knowledge, training and experience. To engage in the practice of law is to
perform those acts which are characteristics of the profession. Generally, to practice law is to give
notice or render any kind of service, which device or service requires the use in any degree of
legal knowledge or skill.

The Professional Regulation Commission (PRC) and the Supreme Court (SC) are the
official organizations mandated by the Philippine government to regulate and supervise the
practice of various professionals. They are responsible for the administration, implementation,
and enforcement of regulatory policies on the regulation and licensing of various professions and
occupations under Philippine jurisdiction.

15
 Licensed professionals from foreign countries who wish to practice their professions
in the Philippines, except in the practice of law, should obtain a special temporary permit from the
PRC based on the provision of Republic Act 8981.

The practice of law is reserved exclusively for Philippine citizens who have completed
the requisite coursework at a duly accredited Philippine law school and have passed the bar
examinations. The two exceptions to the citizenship and education requirement are (1) U.S.
citizens who, before July 4, 1946, were licensed to practice before Philippine courts, and (2)
Philippine citizens who were enrolled attorneys in good standing in the Supreme Court of the
United States or in any circuit court of appeals or district court therein, or in the highest court of
any State or Territory of the United States.

Consequently, foreign lawyers cannot engage in the practice of law in the Philippines,
and must be represented by a member of the Philippine Bar in all matters connected with such
practice.

IX. Citizenship of Juridical Entities

Under Section 2 of the Corporation Code of the Philippines, a domestic corporation is defined as a
corporation is an artificial being created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by law or incident to its existence. A corporation
is an artificial being, intangible and existing only in contemplation of law and is the collective name of
its corporators, members and stockholders. Its citizenship cannot be disassociated from the persons
who compose it.

As a general rule, the nationality of a private corporation is determined by the character or

citizenship of its controlling stockholders. There are two tests to determine whether a corporation or
juridical entity is a Filipino corporation: the grandfather test and the control test.

Shares belonging to corporations or partnerships, at least 60 percent of the capital stock of

which is owned by Filipino citizens, shall be considered as of Philippine nationality, but if the
percentage of Filipino ownership in the corporation or partnership is less than 60 percent, only
the number of shares corresponding to such percentage shall be counted as of Philippine
nationality.

The High Court explained that the first part of the quoted paragraph pertains to the control test or
the liberal rule, while the second part refers to the stricter and more stringent grandfather rule. In
applying these rules to the present case, the Court did not limit the application of the grandfather rule

16
to instances when the Filipino stockholdings are less than 60 percent. It stated that when there is doubt
over the 60-40 Filipino equity ownership, the grandfather may be applied, contrary to the allegations
by the petitioners that the control test should be used as it was the test applied under Republic Act
7042 as amended (otherwise known as the Foreign Investments Act or FIA).

The Court concluded that the control test is still the prevailing mode of determining the nationality
of a corporation, within the ambit of the Constitution, as to who is entitled to participate in the
exploration, development and utilization of the natural resources of the Philippines. The grandfather
rule would only apply if based on the surrounding facts and circumstances, there is doubt on the 60-40
required Filipino-equity ownership in the corporation.

17
 DOMICILE

I. INTRODUCTION

Conflict of laws is that part of the law which deals with the extent to which the law of the state operates and
determines whether the rules of one or another state should govern a legal situation. According to Paras, it is that
part of the municipal law of a state which directs its courts and administrative agencies, when confronted with a
legal problem involving a foreign element, whether they should apply a foreign law or foreign laws.

There are some certain concepts which are regarded as a determinative factor in the conflict of laws. Such
concepts include domicile. The developments of technology and mobility from one state or another brought the
emergence of problems. This is because in the process of moving about, an individual has to determine which law
applies to him.

I. DOMICILIARY THEORY

In countries adhering to the domiciliary rule of determining the personal law of a person, domicile is an
important point of contact.

The Domiciliary Theory in Conflict of Laws is one whereby the status, condition, family rights and
obligations, and capacity of a person are governed by the law of his domicile or the lex domicilii. While the
Philippines follow the nationality rule, there are certain matters in which our courts apply the lex domicilii rule.
Thus, Article 816 of the Civil Code provides that the will of an alien who is abroad produces the effect in the
Philippines if made with the formalities prescribed by law of the place in which he resides, or according to the
formalities observed in his country, or in conformity with those which this Code prescribes.

II. DEFINITION OF DOMICILE

Domicile is that place where a man has his true, fixed and permanent home and principal establishment,
and to which whenever he is absent he has the intention of returning. 18The concept of domicile is not uniform
throughout the world. To civil lawyers in Europe who do not apply common law, it means habitual residence. While
at common law, it is regarded as equivalent to a persons permanent home.In the Philippines, domicile has been
defined as the fixed permanent residence to which, when absent, one has the intention of returning. 19 It has also been
defined as the place where a party actually or constructively has his permanent home, where he, no matter where he
may be found at any given time, eventually intends to return and remain. 20 The law of the forum governs domicile.

18
Black Law Dictionary, Fifth Ed., p. 425
19
Uytengsu v. Republic, 95 Phil. 890 [1954]
20
Aquino v. COMELEC, 248 SCRA 400 [1995]

18
In applying its rules of Conflict of Laws, the forum determines domicile according to its own standards.21 In short,
the Philippine court where a conflict of laws case is filed determines, based on its law, the domicile of one or both
parties, when their domicile is in issue.

For the exercise of civil rights and the fulfillment of civil obligations, Article 50 of the Civil Code defines
domicile as follows:

For the exercise of civil rights and the fulfillment of civil obligations, the domicile of
natural persons is the place of their habitual residence.

As above defined, for the exercise of civil rights and the fulfillment of civil obligations, the domicile of
natural persons is the place of their habitual residence. It means the individuals permanent home, a place to
which, whenever absent for business or for pleasure, one intends to return, and depends on facts and circumstances
in the sense that they disclose intent.22

Domicile includes the twin elements of the fact of residing or physical presence in a fixed place and animus
manendi, or the intention of returning there permanently.23

III. DOMICILE AND RESIDENCE DISTINGUISHED

It has been held that there is a difference between domicile and residence.

Residence is used to indicate a place of abode, whether permanent or temporary while

Domicile denotes a fixed permanent residence to which, when absent one has the intention of
returning. A man may have a residence in one place and domicile in another. Residence is not
domicile, but domicile is residence coupled with the intention to remain for an unlimited time.
A man can have but one domicile for the same purpose at any time, but he may have
numerous places of residence. His place of residence is generally his place of domicile, but it
is not any means necessary so since no length of residence without the intention of remaining
will constitute domicile.24

21
Sec. 13, Restatement of the Law, Conflict of Laws, 2d
22
Ong v. Republic, 19 SCRA 966 [1967]
23
Romualdez-Marcos v. COMELEC, 248 SCRA 300, 323 [1995]
24
Romualdez-Marcos v. COMELEC, 248 SCRA 300, 323 [1995]

19
When a person has more than one dwelling place, his domicile is in the earlier dwelling place unless the second
dwelling place is his principal home. Home is defined as the place where a person dwells and which is the center of
his domestic, social, and civil life.

IV. DOMICILE AND RESIDENCE FOR POLITICAL PURPOSES

Domicile may be understood in many ways. However, for the exercise of political rights, such as running
for an elective position, domicile and residence mean the same thing. The word residence for meeting the
qualification for an elective position, means domicile or the individuals permanent home, a place to which,
whenever absent for business or for pleasure, one intends to return, and depends on facts and circumstances in the
sense that they disclose intent. It includes the twin elements of the fact of residing or physical presence in a fixed
place, and animus manendi, or the intention of returning there permanently. In showing compliance with the
residence requirement, both intent and actual presence in the place where the candidate intends to run must satisfy
the length of time prescribed by the Constitution or the law. 25

The place where a party, actually or constructively, has his permanent home, his domicile, is that which the
Constitution refers when it speaks of residence for the purpose of election law. The fact that a person is registered as
a voter in one district is not proof that he is not domiciled in another district. It is the fact of residence, not a
statement in the certificate of candidacy, which ought to be decisive in determining whether or not an individual has
satisfied the Constitutions residence requirement. 26

Owning a house is not required to establish residence and domicile. It is enough that he should have lived
in the municipality or district or in the rented house or in that of a friend or relative for the required period. For
nowhere is it required by law or the Constitution that a candidate should own a property in order to be qualified to
run.27 All that is required is his intention to make it his domicile for all political purposes as shown in his
contemporaneous words and acts.28

V. DOMICILE AND CITIZENSHIP DISTINGUISHED

Domicile in general speaks of ones permanent place of abode, while citizenship or nationality indicates
ties of allegiance and loyalty. A person may be a citizen or national of one state and a domiciliary of another.
Filipinos who are immigrants abroad, like the holders of green cards in the U.S., are still Filipino citizens, but their
domicile is the country to where they have permanently migrated.

25
Domino v. COMELEC, 310 SCRA 546 [1999]
26
Perez v. COMELEC, 317 SCRA 641 [1999]
27
Co v. HRET, 199 SCRA 692 [1991]
28
Aquino v. COMELEC, 248 SCRA 400 [1995]

20
 VI. DOMICILE OF JURIDICAL PERSON

Article 51 of the Civil Code defines the domicile of juridical persons or corporations. It reads:

Art. 51. When the law creating or recognizing them, or any other provision
does not fix the domicile of juridical persons, the same shall be understood to be
the place where their legal representation is established or where they exercise
their principal functions.

For purposes of determining a corporations domicile, Section 14 of the Corporation Code requires that the
articles of incorporation of a Philippine Corporation must state the place where the original office of the corporation
is to be established or located, which place must be within the Philippines. Thus, the place of incorporation of a
Philippine Corporation is also its domicile.

The domicile of a corporation is the place where its principal place of business or principal office is
established. The articles of incorporation indicate its principal place of business or office, and it is where its
residence is. The fact that it maintains branch offices in some parts of the country does not mean that it has a
residence in said places because a corporation can have only one residence at a time, which is the place of its
principal office as indicated in its articles of incorporation filed with the Securities and Exchange Commission.29

The principal place of business or office of a corporation is its residence for purposes of venue of suit or
action. The residence of its president is not the residence of the corporation because a corporation has a personality
separate and distinct from that of its officers and stockholders. Nor is it its branch office in a place other than its
principal place of business. Hence, there is improper venue where the suit against a corporation is filed in the
residence of its officer or in the place of its branch office, unless such residence or branch office is also the principal
business of the corporation. 30

A defectively organized partnership which the law recognizes as de facto insofar as third persons are
concerned, can possess a domicile for purposes of its de facto existence. 31

Under Article 51 of the New Civil code, the domicile of a partnership organized under Philippine law, is
like domestic corporations, the place where their legal representation is established or where they exercise their
principal functions.

29
Clavecilla Radio System v. Antillon, 19 SCRA 379 [1967]
30
Sy v. Tyson Enterprises, Inc., 119 SCRA 367 [1982]
31
MacDonald v. NCBNY, L-7991 [1956]

21
VII. DOMICILE OF FOREIGN CORPORATION

domicile of a corporation is in the state where it is incorporated. Nonetheless, a corporation formed in one
state may, for certain purposes, be regarded as a resident in another state in which it has offices and transacts
business.32Thus, while a foreign corporation is domiciled in the state of its incorporation, it may also be considered a
resident in the Philippines, where it does business. What effectively makes such a foreign corporation a resident
corporation in the Philippines is its actually being in the Philippines and licitly doing business in the country. As for
a foreign corporation that has been granted a license to operate or to do business in the Philippines, it acquires
domicile in the country by virtue of said license. The purpose of the rule requiring a foreign corporation to secure
license to do business in the Philippines is to enable the courts to exercise jurisdiction over them or the regulation of
their activities in our country. 33

VIII. LEGAL CLASSIFICATION OF DOMICILE

The first kind of domicile is Domicilium Originis or Domicile of Origin which is one that is attributed by
law to every person at birth. It is assigned to a person by the law at the moment of his birth. The domicile of origin
of:
a. a legitimate child is the domicile of choice of his father at the moment of the birth of the child. However, if
the child is a posthumous one (born after the death of the father) its domicile of origin is the domicile of
choice of the mother
b. an illegitimate child is the domicile of choice of the mother at the time of the birth of the child.
c. a legitimated child (an illegitimate child who subsequently is granted the status of a legitimate child by the
process called legitimation) is the domicile of the father at the time of the birth, not the legitimation, of the
child. This is so because legitimation shall take effect from the time of the childs birth. (Art. 273, Civil
Code)
d. an adopted child is not the domicile of the adopter but the domicile of the real parent or the parent by
consanguinity.
e. a foundling (an abandoned infant whose parents are unknown) is the country where it was found.

The point of domicile of origin ensures that everyone has one domicile and only one domicile at all times.
If a person leaves the country of his domicile of origin, intending never to return to it, he continues to be domiciled
there until he acquires a domicile of choice in another country. But if a person leaves the country of his domicile of
choice, intending to never return to it, he ceases to be domiciled in that country unless and until he acquires a new
domicile of choice, his domicile of origin revives. The domicile of origin acts as a fallback, whenever there is no
other domicile, it comes to fill the gap.

32
Northwest Orient Airlines, Inc. v. Court of Appeals, 241 SCRA 192 [1990]
33
Granger Associates v. Microwave Systems, Inc., 189 SCRA 631 [1990]

22
 Another kind of domicile is Domicilium Necesarium or Domicile by Operation of Law or Constructive
Domicile. This type of domicile refers to all those who lack capacity to choose their own domicile: infants, married
women, idiots, and the insane. It is their legal disabilities that prevent them from making a choice. The domicile of a
dependent person is the same as and changes (if at all) with the domicile of the person on whom he is, as regards his
domicile, legally dependent.

The rules for the Constructive Domicile are as follows:

1. Rules for infants:
a. If legitimate is the domicile of the choice of the father. If the father is dead, the mother generally
exercises authority over the child; hence, this time the constructive domicile is the domicile of
choice of the mother.

The following articles of the Civil Code are in point:

Art. 328. The mother who contracts a subsequent marriage loses the parental
authority over her children, unless the deceased husband, father of the latter, has
expressly provided in his will that his widow might marry again, and has ordered
that in such case she should keep and exercise parental authority over their
children.

Art. 333. If the widowed mother who has contracted a subsequent marriage
should again become a widow, she shall recover from this moment her parental
authority over all her unemancipated children.

It would seem, therefore, that in our country the legitimate child follows the domicile of whoever exercises
parental authority over him.

If both parents of the legitimate child are dead, the constructive domicile of the child will be that of the
parent who died later.

b. If illegitimate is the domicile of the choice of the mother after all she is supposed to take care of
the child.
c. If adopted is the domicile of choice of the adopter.
d. If a ward is the domicile of choice of the guardian over the person of the ward.

2. Rules for Married Women:

23
 a. If the marriage is valid is the domicile of choice of her husband. This is because, in general, the
husband fixes the residence or domicile of the family. In certain instances, however, the wife is
allowed to have a separate domicile; in this case, her domicile will not be constructive anymore; it will
be her domicile of choice. In the following instances, among others, the wife may be allowed to have a
separate domicile:

i. If the husband lives abroad, except if living abroad is in the service of the Republic.
ii. If they are legally separated
iii. If the husband forcibly ejects the wife from the conjugal home so that he may have
illicit relations with another
iv. If there is a separation de facto of the spouses. However, it must be noted that under
Art. 221 of the Civil Code, any contact for personal separation between husband
and wife shall be void and no effect.

The reason for the general rule has been well stated by the Supreme Court in the following manner: This
contention of the petitioner is not tenable. It is true, as a general of law, that the domicile of the wife
follows that of her husband. This rule is founded upon the theoretic identity of person and of interest
between the husband and the wife, and the presumption that, from the nature of the relation, the home of
the one is that of the other. It is intended to promote, strengthen, and secure their interests in this relation,
as it ordinarily exists, where union and harmony prevail. But the authorities are unanimous in holding
that this is not an absolute rule. Under modern laws it is clear that many exceptions to the rule that the
domicile from of the wife is determined by that of her husband must obtain. When married women as
well as children subject to parental authority live, with the acquiescence of their husbands or fathers, in a
place distinct from where the latter live, they have their own independent domicile, which should be
considered in determining jurisdiction in cases of provisional support, guardianship of persons, etc. If the
wife can acquire a separate residence when her husband consents or acquiesces, we see no reason why
the law will not allow her to do so when, as alleged in the present case, the husband unlawfully ejects her
from the conjugal home in order that he may freely indulge in his illicit relations with another woman.
Under no other circumstance could a wife be more justified in establishing a separate residence from that
of her husband. For her to continue living with him, even if he had permitted it, would have been a
condonation of his flagrant breach of fidelity and marital duty. Furthermore, in this case no longer was
there an identity of persons and of interest between the husband and the wife. Therefore, the law allowed
her to acquire a separate residence. For it would do violence to the plainest principle of common sense
and common justice of to call this residence of the guilty husband, where the wife is forbidden to come,
the domicile of the wife."34

34
De la Vina v. Villareal, 41 Phil. 13

24
 b. If the marriage is voidable, prior to the annulment the constructive domicile of the wife is the domicile
of choice of the husband, unless she is permitted under circumstances to select her own domicile of
choice.

After the marriage is annulled, the woman ceases to be the wife, hence, being no longer under any legal
disability, she no longer has any constructive domicile. If she decides to remain in the domicile of the
former husband, this would be her own freely selected domicile of choice, not her constructive domicile.

c. If the marriage is void, it is as if there was no marriage, and the wife is not really one. Hence, she is
not laboring under any legal disability, consequently she has no constructive domicile. Should she
continue being domiciled in the same place as where her husband is a domiciliary, such place would
not be her constructive domicile, it would be her domicile of choice.

3. Rules for Idiots, Imbecile, and the Insane:

Idiots, imbecile, and the insane are generally devoid of any intelligence that may enable them to freely
select their own domicile of choice, hence, the law assigns to them their domicile:

a. If they are below the age of majority, they are still considered infants under the law, thus, the rules for
infants are applicable to them.

b. If they are above the age of majority a distinction must be made:

i. If they have guardians over their persons, they have to follow the domicile of choice of their guardians
ii. If they have no guardians over their persons, their constructive domicile is in the place where they had
their domicile of choice shortly before they become insane.

It should be remembered, however that a voluntary domicile of choice may be acquired by insane
individuals if at the time of the choice they were in their lucid intervals. Furthermore, the choice of voluntary
domicile does not require as much as intelligence as would normally be essential for binding oneself in a contract; to
enter into an agreement respecting a contract, one must possess capacity to assume burden; on the other hand, the
choice of domicile does not necessarily carry with it the assumption of obligations. According to Goodrich, in
changing domicile, the actor merely subjects himself to the operation of the legal system of the new jurisdiction a
system that must be presumed to guard rights and privileges and to operate equally upon all. So that the test is said
to be whether the party had sufficient reason and understanding to choose his place of residence. 35

35
Goodrich, Conflict of Laws, p. 94

25
d. Other Persons
i. Convict or prisoner Prisoners fall under the category of those who are given a domicile of another by law.
He is not free to have a domicile of choice; his domicile is that which he has possessed prior to his incarceration
ii. Soldiers since they are compelled to follow the dictates of the military, domicile is that before their
enlistment
iii. Public Officials or Employees abroad since their stay abroad is in their official and not in their
personal capacity, their domicile is the one before they were assigned elsewhere, unless they
voluntarily adopt their place of employment as their permanent residence. Public officers who are
assigned with public duty will have to reside in other places for the discharge of their duty. In such
cases, public officers can retain their original domicile which they have in their respective state.
36
Table 1:
DOMICILE OF ORIGIN CONSTRUCTIVE DOMICILE

Acquired at birth Acquired after birth

Assigned only to infants Assigned to persons under legal disabilities

Never changes Changes from time to time

3. Domicile of Choice or Voluntary Domicile

A domicile of choice is a self-acquired domicile. It is a domicile which a person chooses to replace his/her
former domicile, which may be either a domicile of origin or domicile of choice. Only a legally competent person
can choose his/her domicile.37

According to common law every independent person can acquire a domicile of choice by satisfying the
following conditions. They are:
a. he must have a freedom of choice;
b. he must make an intention to change their current residence;
c. he must have an intention to make the new residence his/her permanent residence.

However a person can abandons his/her domicile of choice in a country by satisfying the following two
conditions:

a. he must cease to reside in the country; and

b. he must have an intention to cease their residence permanently.

Table 2: 38

36
San Beda College of Law Memory Aid Civil Law. (2017).
37
Domicile. (n.d.). Retrieved October 12, 2017, from https://domicile.uslegal.com/types-of-domicile/domicile-of-choice/
38
San Beda College of Law Memory Aid Civil Law. (2017).

26
DOMICILE OF ORIGIN CONSTRUCTIVE DOMICILE DOMICILE OF CHOICE

Result of the voluntary will and

Assigned by law Assigned by law
action of the person concerned

XI. SITUS OR ECLECTIC THEORY

The capacity, status, and family relations of a person are governed not necessarily by the law of his
nationality or the law of his domicile but by the law of the place (situs) where an important element of the problem
occurs or is situated.39

I. Kinds of Participation of the Individual Concerned

a. If participation is active When he does an act voluntarily, the governing law is the law of the actual situs
of the transaction or event.
b. If the participation is passive When the effects of the act are set forth or determined by law, the governing
law is the law of the legal situs, i.e., the domicile of the individual concerned.

Example: The marriage between two Filipinos in the USA

(a) The act of getting married is voluntary, the validity of the marriage is governed by its actual situs, or
the lex loci celebrationis (Art. 26, first par., Family Code)

(b) With respect to the rights and obligations, and property relations, of the Filipino couple, however, they
are governed by the national law of the spouses, which regulates or fixes such matters between them; in
other words, the legal situs is the national law of the spouses. (Art. 80, Family Code)

XII. GENERAL RULES ON DOMICILE

1. No person can ever be without a domicile or every natural person must have a domicile. A persons domicile of
origin prevails until he acquires a new domicile
2. A person cannot have two simultaneous domiciles. He can only have one domicile for a given purpose, for a
given time, under the law of a particular state. He may have residence in different places but he is domiciled
only in the place where he intends to make a permanent home. Reason: The very purpose for identifying ones
domicile is to establish a connection between the person and a definite legal system
3. A natural person, free (not a prisoner) and sui juris (one of age and under no disability), can change his domicile
at pleasure
4. A domicile, once acquired, is retained until a new one is gained

39
Paras, J. L. (2016). Civil Code Persons and Family Relations (Vol. I). Manila: Rex Bookstore.

27
5. The presumption being in favor of the continuance of an existing domicile, the burden of proof is on the one
who alleges that a change of domicile has taken place. To acquire a new domicile of choice, the following must
concur: residence or bodily presence in the new locality; an intention to remain there (animus manendi); and an
intention not to return to the former abode (animus non revertendi).

XIII. LOSS OR RETENTION OF DOMICILE

Domicile may be lost through the performance of certain acts indicative of an intent to abandon domicile.
These acts, however, may also indicate the intent to retain ones domicile.

A person may abandon his domicile by choosing a new domicile, actually residing therein, and intending that place
to be his permanent residence.40

In the case of Marcos v. Commission on Elections, 41 the Court ruled that:

Moreover, while petitioner was born in Manila, as a minor she naturally followed the domicile of her
parents. She grew up in Tacloban, reached her adulthood there and eventually established residence in
different parts of the country for various reasons. Even during her husband's presidency, at the height of the
Marcos Regime's powers, petitioner kept her close ties to her domicile of origin by establishing residences
in Tacloban, celebrating her birthdays and other important personal milestones in her home province,
instituting well-publicized projects for the benefit of her province and hometown, and establishing a
political power base where her siblings and close relatives held positions of power either through the ballot
or by appointment, always with either her influence or consent. These well-publicized ties to her domicile
of origin are part of the history and lore of the quarter century of Marcos power in our country. Either they
were entirely ignored in the COMELEC'S Resolutions, or the majority of the COMELEC did not know
what the rest of the country always knew: the fact of petitioner's domicile in Tacloban, Leyte.

Similarly, in the case of Jalosjos v. COMELEC: 42

Indeed, the Court has repeatedly held that a candidate is not required to have a house in a community to
establish his residence or domicile in a particular place. It is sufficient that he should live there even if it be
in a rented house or in the house of a friend or relative. To insist that the candidate own the house where he
lives would make property a qualification for public office. What matters is that Jalosjos has proved two
things: actual physical presence in Ipil and an intention of making it his domicile.

XIV. ABSENTEE VOTING AND DOMICILE

40
Pe Benito, G. R. (2016). Conflicts of Law. Manila : Rex Bookstore.
41
248 SCRA 300 (1995)
42
G.R. No. 191970, April 24, 2012

28
 It is a state policy of the Philippines to enfranchise its citizens who are qualified to vote in the elections.
There is thus a requirement of residency before a person can exercise his right of suffrage. This residency
requirement, however, must conform with the doctrine of domicile so that persons who have the intention of
returning to their domicile may be allowed to vote despite being absent thereat for a considerable time.

The efforts of OFWs in nation-building are therefore recognized by giving them the right to vote despite
lacking actual residency in the Philippines. However, even if they lack actual residency, they must still demonstrate
that the Philippines is their domicile and that they have the intention of returning before they can be allowed to vote.
43

XV. VENUE IN ESTATE PROCEEDINGS

The residence of a person is significant in determining the venue of estate proceedings and ordinary civil
actions. Residence, for venue purposes, usually refer only to actual residence or place of abode, and not to a
persons domicile. As held in Baritua v. Court of Appeals:44

We have held that the residence of a person must be his personal, actual or physical habitation or his actual
residence or abode. It does not mean fixed permanent residence to which when absent, one has the intention
of returning. The word resides connotes ex vi termini actual residence as distinguished from legal residence
or domicile. Actual residence may in some cases be the legal residence or domicile, but for purposes of
venue, actual residence is the place of abode and not necessarily legal residence or domicile. Actual
residence signifies personal residence, i.e., physical presence and actual stay thereat. This physical
presence, nonetheless, must be more than temporary and must be with continuity and consistency.

43
Pe Benito, G. R. (2016). Conflicts of Law. Manila : Rex Bookstore.
44
G.R. No.100748, February 3, 1997

29
 ADOPTION
It is n act, which establishes a relationship of paternity and filiation and in so doing, endows the child with
legitimate status.

I. Law which determines whether the relationship of adoption has been created or not
The childs personal law
If the child does not reside in the country of his citizenship the personal law of the adopter will govern, or
the personal law of the adopter and that of the child will be applied concurrently

II. Adoptions recognized overseas are considered valid in the Philippines

Private international law offers no obstacle to recognition of foreign adoption. This rests on the principle
that the status of adoption, created by the law of a State having jurisdiction to create it, will be given the same effect
in another state as is given by the latter state to the status of adoption when created by its own law. It is quiteobvious
then that the status of adoption, once created under the proper foreign law, will be recognized in this country, except
where public policy or the interests of its inhabitants forbid its enforcement and demand the substitution of the lex
fori. Indeed, implicit in Article 15 of our Civil Code just quoted, is that the exercise of incidents to foreign adoption
"remains subject to local law."(Marcaida v. Anglubat G.R. No. L-24006, November 25, 1967)

III. Law which determines the legal effects of adoption

The legal effects of adoption are determined by the same law that created the relationship of adoption

IV. Adoption Laws in the Philippines

RA 8552 Domestic Adoption Act of 1998
RA 8043 Inter-Country Adoption Act of 1995

V. Adoption by aliens in the Philippines

Under RA 8552 or the Domestic Adoption Act of 1998, aliens (who are not even former Filipino citizens) can adopt
in our country, provided:

1. The have the same qualifications as those required of Filipino citizens

2. Their countries have diplomatic relations with our country
3. They have been living in the Philippines for at least 3 years prior to the filing of the petition for adoption,
and maintain such residence until the adoption decree is entered

30
 4. The have been certified by their diplomatic or consular offices or by any appropriate government agency that
they have the legal capacity to adopt in their own countries and
5. Their government allows the adopted child to enter their own country as their adopted child

VI. Special aliens who can adopt under RA 8552

A former Filipino citizen who seeks to adopt a relative within the 4th degree of consanguinity or affinity
One who seeks to adopt the legitimate son or daughter of his or her Filipino spouse
One who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse a relative within
the 4th degree of consanguinity or affinity of the Filipino spouse
These aliens need not comply with the residency in the Philippines and they also need not submit a certification that
they have the capacity to adopt from the diplomatic or consular office of their country in the Philippines or any
other government agency.

Note:

RA 8552 still requires that the (alien) husband and wife must jointly adopt. However in cases where the
spouses are legally separated, the husband or the wife can adopt alone, and the consent of the other spouse to an
adoption filed by one spouse is not necessary.

VII. Residency requirement is not present in RA 8043

The objective of inter-country adoption law is to allow foreigners to adopt in our jurisdiction, subject to substantive
and procedural requirements. However, RA 8043 provides that inter-country adoption should be the last resort and
that domestic adoption is still preferred.

VIII. Nature of adoption in Philippine law

1. Adoption proceedings are always judicial and in rem, i.e., publication is required
2. A mere agreement of adoption between the adopters and the parents of the child is not a valid adoption, nor
the fact that the child had been adopted de facto (ampon) by the alleged adopting parents
3. Neither is mere registration of the child in the civil registry as the child of the adopter a valid adoption. This
even amounts to the crime of simulation of birth
4. The capacity and right of the adopter to file a petition for adoption are governed by the law in force at the
time the petition is filed, and cannot be impaired by a new law disqualifying him or her for adoption

IX. Recognition of a foreign decree of adoption

31
While there is no provision of law nor jurisprudence expressly requiring the Philippines to recognize a foreign
decree of adoption, it is believed that under Sec. 48 of Rule 39 of the Rules on Civil Procedure, we can recognize
such foreign decree of adoption provided the foreign court had jurisdiction to render said decree, and that there is no
want of notice, collusion, extrinsic fraud, or clear mistake of law or fact leading to the foreign decree of adoption.

X. Does adoption confer on the adopted child the citizenship of the adopter?

No. Adoption does not confer on the adopted child the citizenship of the adopter. Adoption is a matter political and
not civil in nature, and the ways in which it should be conferred are outside the ambit of the Civil Code.

32
 PROPERTY
Choice of Law in Property

I. Real Property

General Rule: Lex Situs or Lex Rei Sitae

Article 16 of the Civil Code states that real property and personal property are subject to the law of the
country where it is situated.

Exceptions:45

A. successional rights- National Law of decedent

B. capacity to succeed- National Law of decedent

C. contracts involving real property but which do not deal with the title thereto- the law
intended will be the proper law of the contract (lex loci voluntaries or lex loci intentions)

D. contracts where the real property is given as security- the principal contract (usually loan) is
governed by the proper law of the contract (lex loci voluntaries or the lex loci intentions)

WHEN CONFLICT ARISES?46 When a foreign element is involved in the case. The foreign element may be in
the form of the ff.:

1. a foreigner owns property in another country; or

2. there is a foreign law on land ownership that conflicts with domestic law.

The only time a Philippine court has to settle a problem of classifying property is when it is located in a foreign
country which has a law that distinguishes between real and personal property.47

***Capacity; Legal Capacity; Lex Rei Sitae (2007 Bar Questions)

45 Conflict of Laws by Paras

46 Conflict of Laws by Pe-Benito
47 Conflict of Laws by Coquia and Aquiling-Pangalangan

33
TRUE OR FALSE. EXPLAIN

Roberta, a Filipino, 17 years of age, without the knowledge of his parents, can acquire a house in Australia
because Australian Laws allow aliens to acquire property from the age of 16.

Answer: True. Since Australian Law allows alien to acquire property from the age of 16, Roberta may
validly own a house in Australia, following the principle of lex rei sitae enshrined in Art. 16, NCC, which states
Real property as well as personal property is subject to the law of the country where it is situated. Moreover, even
assuming that legal capacity of Roberta in entering the contract in Australia is governed by Philippine Law, she will
acquire ownership over the property bought until the contract is annulled.

SPECIFIC RULES AS TO OWNERSHIP OF REAL PROPERTY48

Philippine law governs real property situated within its territory. The ff. are rules relating to the ownership
of real property in the Philippines:

1. Section 7, Article XII, 1987 Constitution

SEC. 7. Save in cases of hereditary succession, no private lands shall be

transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain.

It must be noted that hereditary succession only refers to intestate succession. Otherwise, if a testator were
allowed to transfer property to a person or entity not qualified to own property by merely executing a will, the same
would allow a direct contravention of the constitution.

Matthews v. Taylor
G.R. No. 164584, June 22, 2009

FACTS: Benjamin Taylor, British citizen, was married to Joselyn C. Taylor, a Filipino citizen. They
purchased a property in Boracay Island, constructed improvements thereon, and converted the
same into a resort. Benjamin and Joselyn subsequently had a falling-out from one another.

48 Ibid

34
 Joselyn later on leased the property to petitioner Philip Matthews who took over the property.
Benjamin challenged the lease by filing an action for Declaration of Nullity of the lease on the ground
that his funds were used in the acquisition of the property and that the lease was executed without
his consent.

After trial, the RTC ruled in favor of Benjamin. On appeal, the CA affirmed the judgment of the
RTC, and held that the lease was entered into without Benjamins consent.

ISSUE: Whether Benjamin has the right to nullify the lease agreement?

HELD: NO, he has no right.

The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands
in the Philippines, save only in constitutionally recognized exceptions. There is no rule more settled
than this constitutional prohibition, as more and more aliens attempt to circumvent the provision by
trying to own lands through another.

Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner.
Benjamin, being an alien, is absolutely prohibited from acquiring private and public lands in the
Philippines. Considering that Joselyn appeared to be the designated "vendee" in the Deed of Sale of
said property, she acquired sole ownership thereto. This is true even if we sustain Benjamins claim that
he provided the funds for such acquisition. By entering into such contract knowing
that it was illegal, no implied trust was created in his favor; no reimbursement for his expenses can
be allowed; and no declaration can be made that the subject property was part of the
conjugal/community property of the spouses. In any event, he had and has no capacity or personality to
question the subsequent lease of the Boracay property by his wife on the theory that in so doing, he
was merely exercising the prerogative of a husband in respect of conjugal property. To
sustain such a theory would countenance indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would accord the alien husband a substantial
interest and right over the land, as he would then have a decisive vote as to its transfer or disposition. This
is a right that the Constitution does not permit him to have.

2. Section 8, Article XII, 1987 Constitution49

49 Id.

35
 SEC. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-
born citizen of the Philippines who has lost his Philippine citizenship may be a
transferee of private lands, subject to limitations provided by law.

Section 8 allows former natural-born citizens of the Philippines to be transferees of private lands but subject to area
exceptions. R.A. 8179, Sec. 5 or the Foreign Investments Act, the area that a former natural-born citizen may
acquire has been increased to a maximum area of five thousand (5,000) square meters in the case of urban land or
three (3) hectares in the case of rural land to be used by him for business or other purposes. These limitations are
enforced by the Register of Deeds by requiring the transferee to execute a sworn statement stating, among other
things, the area of the property they are acquiring.

NOTE: The rule with respect to former natural-born citizens who have reacquired their Philippine
citizenships under RA 9225 is different. Beneficiaries of RA 9225 enjoy full civil and political rights and are not
subject to the area limitations under RA 8179.

3. Condominium Act of Philippines50

RA 4726 or otherwise known as the Condominium Act of the Philippines, allows foreigner to own units in
the condominium building subject to limitation of 60-40 percentage ownership ratio in favor of Filipino citizens or
corporations.

II. PERSONAL PROPERTY

Lex Rei Sitae is applicable to BOTH real and personal property.

Thus, Article 16, par. 1 of the new Civil Code says: Real and property as well as personal
property is subject to the law of the country where it is situated.

Reason: In the words of Senator Lorenzo Taada, now that there has been great increase in the
amount and variety of personal property not immediately connected with the person of the owner,
it was deemed advisable by Congress of the Philippines to adopt the doctrine of lex rei sitae also

50 Id.

36
 to movables.

Situs is easily ascertainable, making it convenient and fair for both the immediate parties and third
persons, who may be affected by rights in rem in the property and who are, therefore, interested in
having these rights enforced and rendered effective by the state which logically (by reason of
location) possesses the jurisdiction to issue the necessary legal and coercive process.

Scope: extends in general to all the relations and situations already adverted to in the case of real property.
Similarly, the exceptions to the rule in the case of immovables apply to problems in personal property. Except in
case of mortgage, it should be modified to one of pledge of personalty.

Certain modifications have to be called because of the very nature of movable property.

Personal Property

Tangible Intangible

-May be appropriately referred to as CHOSES IN -May be appropriately referred to as CHOSES

POSSESSION(is a personal thing of which one has IN ACTION(a thing in action and is the right of
possession) bringing an action or right to recover a debt or
money.)

-the doctrine of lex rei sitae presents no difficulty except -sometimes present complicated problems
in the case of moving objects (ship and goods in transit)

Examples: Tangible physical objects Examples: debts, patents, copyright, goodwill trademarks
and trade names and shares of stock

Choses in Possession that Usually Move

a. Means of transportation

Vessels, in view of their inherent movability, are governed by the LAW OF THE FLAG
in many states; in others, the LAW OF THE PLACE OR REGISTRY takes the place of lex rei sitae.

37
 - Said law of the flag OR the registry is deemed controlling in case of the sale or mortgage of the vessel IF
the vessel at the time of the transaction is on HIGH SEAS.

- If the vessel, however is docked at a foreign port, said port is usually regarded as the temporary lex situs by
both the owner and third parties.

b. Goods in transitu

1. Liability for loss, destruction or deterioration of goods in transit is governed by the law of
destination.

- Art. 1753 of the New Civil Code provides that: The law of the country to which the goods are transported
shall govern the liability of the common carrier for their loss, destruction or deterioration.

- If, in the course of the voyage the destination is changed, it is evident that the law of the new destination
applies

- If the goods were never shipped, they were never in transit and Art. 1753 cannot be made use of, and
consequently the controlling law would be that of the actual situs.

2. The validity and effect of the seizure of goods in transit are governed by the law of the place where
they were seized (locus regit actum) because this place was their temporary situs.

3. The disposition or alienation of the goods in transit is generally governed by the law of the place
voluntarily agreed upon (lex loci voluntatis) or the law of the place intended (lex loci intentionis).

- The disposition or alienation is effected thru a contractual obligation.

- However, in some states, the transfer of title to chattels is governed by the law of the place of the chattels at
the time of the transfer; and this title once accrued will ordinarily be recognized in any State into which
chattels are brought.

INTANGIBLE PERSONAL PROPERTY (CHOSES IN ACTION)

1. For the recovery of debts or for the involuntary assignment of the debts (garnishment), the proper
point of contact is the place where tthe debtor may be effectively served with summons (usually, but
not always, the domicile of the debtor).

Examples:

38
 a. A German domiciled and found in California, owes a Filipino in Manila an amount of money.
Generally, where should the Filipino sue for the recovery of the debt?

Answer: Generally, suit must be instituted in California because the debtor is domiciled and found
there; however, should he be in Japan, for instance, litigation may be commenced in the latter country.
This is a convenient and practical solution.

b. A Japanese, domiciled in Florida, but found in New York owes by final judgment a Filipino in Manila
a sum of money. The Japanese, however, has in the meantime no money; upon the other hand, he is the
creditor of a French domiciled in Indonesia but now temporarily residing in Manila, where he is a
university student. The Filipino creditor wants to file garnishment proceedings, that is, a judgment
creditor of the Japanese, he wants to attach the sum of money due to the Japanese from the French so
that the said French may directly pay the money to the Filipino. May the garnishment proceedings
prosper in Manila?

Answer: Yes, because the French is now in Manila where he may be effectively served with summons.
The garnishment, if granted by the Court, operated as an involuntary assignment to the Filipino of the
Frenchs debt (in favour of the Japanese); moreover since the Philippine tribunal had effective
jurisdiction, its assignment of the debt discharges the Frenchs liability. The discharge will generally
be universally recognized. Indeed, it has been held that jurisdiction to reach by garnishment a claim
due to ones debtor rests upon jurisdiction over the garnishee. (Harris v. Balkm 198 US 215).

2. The validity and effectiveness of a voluntary assignment of a debt depends on the lex loci voluntatis
or the lex loci intentionis; in other words, the proper law of the contract controls.

Example: A Filipino is the creditor of a German domiciled in Manila. The credit is the result of a
business transaction entered into in Manila; payment is stipulated to be made also in Manila. If the
Filipino while vacationing in Japan assigns his credit in favour of a Russian, also domiciled in
Manila, the proper law that should control the validity and the effectiveness of the assignment should be the Philip
pine law, for it is evident that it this is the law that the parties intended to be ap plicable (lex loci
intentionis). It is clear in the problem that Manila is the place which has the most substantial connection
with the assignment.

Other theories:

The controlling law is the national law of the debtor and the creditor if the forum adheres to the nationality
principle and the domicillary law of the debtor and creditor if the forum is guided by the domicillary
principle.

39
 o This theory is difficult and impractical application when the personal law of the parties varies.
Also, a needless investigation of the personal law would be inevitable, and business transaction
would suffer.

The lex loci celebracionis of the assignment, which is the law of the place where the voluntary assignment
of credit was made.

o In some cases the lex loci celebracionis may be purely accidental and is least connected with the
credit that is assigned.

Lex loci solutionis or the law of the place of performance or the law of the place where payment may be
asked of the debtor) that is controlling.

o The defect in this theory is the fact that there are many places where performance may be sought,
namely, any state where the debtor may be served with summons.

3. The situs of a debt for purposes of taxation is the domicile of the creditor and accordingly, the
collectible credit may be taxed therein.

- Note that the interest on debts are deductible from the gross income of the taxpayer.

4. For the purpose of administering debts, the situs is the place where the assets if the debtor are
actually situated.

Example: An assignee in insolvency is required to take hold of the assets of the debtor for eventual distribution
among the creditors: it is obvious that the lex situs of the properties will be the determining law.

5. The negotiability or the non-negotiability of an instrument is determined by the right embodied in

the instrument.

Examples:

a. a Swedish bill of exchange, it is the Swedish law that determines whether or not it is negotiable

b. A Philippine check is governed by the Philippine Negotiable Instruments Law

40
 6. The validity of transfer, delivery or negotiation of the instrument is, in general, governed by the law
of the situs of the instrument at the time of transfer, delivery or negotiation.

- Note: Under Act No. 2031 (Phil. Negotiable Instruments Law), Sec. 152. In what cases protest
necessary. - Where a foreign bill appearing on its face to be such is dishonored by nonacceptance,
it must be duly protested for nonacceptance, by nonacceptance is dishonored and where such a bill
which has not previously been dishonored by nonpayment, it must be duly protested for
nonpayment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does
not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary.

7. The effect on a corporation of the sale of corporate shares is governed by the law of the place of
incorporation.

Rationale: To bind the corporation, the sale must be recorded in the books of the corporation.

In the case of a corporation incorporated under Philippine Laws, sale or transfer of shares shall be binding
between two parties, and shall also bind the corporation only after the recording of the transaction in the books of
the corporation.

8. The effect between the parties of the sale of corporate shares is governed by the Lex Loci Voluntatis
or the Lex Loci Intentionis (the proper law of the contract)

Reason: The sale or transfer is a contract. The proper law of the contract is the place where the certificate is
delivered.

9. Taxation on the dividends of corporate shares is governed by the law of the place of incorporation.

Business situs situs acquired for tax purposes by one who has carried on a business in the state more or less
permanent in its nature.

10. Franchises are subject to the law of the place that granted them.

Franchise special privilege conferred by the government on an individual or upon a corporation

With particular reference to corporations, it may mean the corporation itself (as a franchise belonging to the
shareholders of the corporation), or to the different powers of the corporation (right to hold or dispose property)

11. The goodwill of a business, as well as its taxation, is governed by the law where the business is carried
on.

41
Goodwill patronage of any established trade or business

Under Art. 521 of the Civil Code, the goodwill of a business is property, and may be transferred with the right to use
the name under which the business is conducted.

12. Patents, Copyrights, Trademarks, and Trade Names are in the absence of a treaty protected only by
the state that granted or recognized them.

Patentable Inventions refers to any technical solution to a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable.

Requisites of Patentability:

(1) Any TECHNICAL SOLUTION of a problem in any field of human activity;

(2) INVENTIVE STEP - An invention involves an inventive step if, having regard to prior art, it is not
obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming
the invention (IPC, Sec. 26).

(3) NOVELTY

An invention shall not be considered new if it forms part of a prior art (IPC, Sec. 23).

(4) INDUSTRIAL APPLICABILITY

An invention that can be produced and used in any industry shall be industrially applicable (IPC, Sec. 27).

(5) PATENTABLE SUBJECT MATTER

An invention that does not fall within the prohibitions of a non-patentable invention under Sec. 22 of the
IPC

Non-patentable inventions

(1) Discoveries, scientific theories and mathematical methods, a law of nature, a scientific truth or
knowledge as such;

(2) Abstract ides/theories, fundamental concepts apart from the means or processes for carrying the concept
to produce a technical effect;

(3) Schemes, rules, and methods of performing mental acts and playing games;

42
 (4) Method of doing business, such as a method or system for transacting business without the technical
means for carrying out the method or system;

(5) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods
practiced on the human or animal body. The non-patentability shall not apply to products and compositions
for use in any of these methods;

(6) Anything which is contrary to public order, healthy, welfare, or morality, or process for cloning or
modifying the germ line genetic identity of humans or animals or uses of the human embryo;

(7) Aesthetic creations;

(8) Programs for computers; or

(9) Plant varieties or animal breeds or essentially biological processes for the production of plants and
animals. This provision shall not apply to microorganisms and non-biological and microbiological
processes.

Differences between Copyright, Trademark, and Patent

COPYRIGHT TRADEMARK PATENT

Confined to a literary or artistic
works which are original creations
in the literary or artistic domain
protected from the moment of their
creation
Any visible sign capable of Right granted to an inventor by the
distinguishing the goods of an State, or by the Regional office
enterprise and shall include a acting for several states, which
stamped or marked container of allows the inventor to exclude
goods anyone else from commercially
exploiting his invention for a
limited period

A patent lasts for 20 years after the filing of its application, and its ownership inures to the public after the expiration
of such.

Sec. 28 of the IP Code states that the right to a patent belongs to the inventor, his heirs, or assigns. When two or
more persons have jointly made an invention, the right to a patent shall belong to them jointly.

A Trademark or Service Mark is any visible sign capable of distinguishing the goods or services of an enterprise
and shall include a stamped or marked container of goods.

43
Sec. 160 of the Intellectual Property Code provides a right of foreign corporation to sue in trademark or service
mark enforcement action, which states:

Any foreign national or juridical person who meets the requirements of Section 3 of this Act and does not
engage in business in the Philippines may bring a civil or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false designation of origin and false description, whether
or not it is licensed to do business in the Philippines under existing laws.

A patent can also be exploited through Compulsory Licensing, after application to the Director of Legal Affairs of
the IPO, exerting efforts informing the owner of the patent, and within the prescribed period of time, as long as it
has one of the following grounds:

(1) National emergency or other circumstances of extreme emergency;

(2) When public interest requires;

(3) Manner of exploitation of patent is anti-competitive;

(4) Public non-commercial use of the patent without satisfactory reason;

(5) Patented invention is not being worked in the Philippines on a commercial scale although capable of
being worked; or

(6) Where the demand for the patented drugs and medicines is not being met to an adequate extent and on
reasonable terms.

Section 29. First to File Rule. - If two (2) or more persons have made the invention separately and independently of
each other, the right to the patent shall belong to the person who filed an application for such invention, or where
two or more applications are filed for the same invention, to the applicant who has the earliest filing date or, the
earliest priority date.

FIRST-TO-INVENT RULE grants the patent rights to the first true and actual inventor, his heirs, legal
representatives or assigns.

44
NOTE: The Philippines adheres to the first-to-file rule.

Section 31. Right of Priority. - An application for patent filed by any person who has previously applied for the
same invention in another country which by treaty, convention, or law affords similar privileges to Filipino citizens,
shall be considered as filed as of the date of filing the foreign application: Provided, That:

(a) the local application expressly claims priority;

(b) it is filed within twelve (12) months from the date the earliest foreign application was filed; and

(c) a certified copy of the foreign application together with an English translation is filed within six (6)
months from the date of filing in the Philippines.

Grounds for cancellation of patent (Sec. 61, IP Code):

Any interested person may, upon payment of the required fee, petition to cancel the patent or any claim
thereof, or parts of the claim, on any of the following grounds:

(a) That what is claimed as the invention is not new or patentable;

(b) That the patent does not disclose the invention in a manner sufficiently clear and complete

for it to be carried out by any person skilled in the art; or

(c) That the patent is contrary to public order or morality.

MARRIAGE

I. MARRIAGE AS A CONTRACT

Conflict Problem arising in Marriage as a Contract

While rules on marriage is simple enough in Philippine jurisdiction as long as the marriage is
between Filipinos and is celebrated in our country, difficulties start to arise when marriage is complicated
by the involvement of a foreign national and more so, when celebrated abroad. This is true especially when
foreign law does not conform or is completely contradictory to our idea and concept of marriage. Such
would create a very serious problem in the status of children, personal and property relations of the
spouses, authority and rights of parents to children and vice versa, and successional rights among others.
Thus, it is imperative to know the rules to apply in such cases.

45
Definition/ Philippine Rules
In understanding conflict of laws with regard to marriage, it is worthy to revisit our basic rules in
marriage. In the Philippines, marriage is defined as follows:
Marriage is a special contract of permanent union between a man and a woman entered into in
accordance with law for the establishment of conjugal and family life. It is the foundation of the
family and an inviolable social institution whose nature, consequences, and incidents are governed
by law and not subject to stipulation, except that marriage settlements may fix the property
relations during the marriage within the limits provided by this Code. Article 1, Family Code of
the Philippines

The Family Code further enumerates essential and formal requisites of marriage, in the absence of
which, such marriage is void ab initio except in cases of putative marriages.
Essential requisites
1. Legal capacity of the contracting parties who must be a male and a female; and
2. Consent freely given in the presence of the solemnizing officer.

Formal requisites:
1. Authority of the solemnizing officer;
2. A valid marriage license except in the cases provided for in Chapter 2, Title 1 of the Family
Code; and
3. A marriage ceremony which takes place with the appearance of the contracting parties before
the solemnizing officer and their personal declaration that they take each other as husband and
wife in the presence of not less than two witnesses of legal age.

Any defect in the essential requisites renders the marriage voidable while irregularity in the formal
requisites does not affect the validity of marriage but the party responsible for such irregularity shall be
criminally, civilly, and administratively liable.

Filipinos married abroad

In cases where Filipinos marry abroad, we follow the rule of lex loci celebetionis. Article 26 states that:
All marriages solemnized outside the Philippines, in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country,
except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and 38

Foreign marriages of Filipinos, however, shall still be void if:

1. Either or both parties did not have legal capacity to get married

46
 2. Marriage is bigamous/ polygamous
3. Lack of consent due to mistake in identity
4. Psychological incapacity at the time of the marriage to comply with the essential marital
obligations
5. Incestuous marriages
6. Marriages barred by public policy

Foreigners married abroad

Marriage of Foreigners abroad is also recognized in the Philippines. The rule to be followed still is
lex loci celebrationis. The exceptions in Article 26 of the Family Code do not apply to foreigners married
abroad. Universally considered incestuous marriages (i.e. marriage between brothers and sisters and
ascendants and descendants) and those that are highly immoral are still void.

Mixed marriage abroad

When one of the parties to a marriage celebrated abroad is a Filipino and the other is a foreigner,
we still apply the rule of lex loci celebrationis. The exception on universally incestuous and highly immoral
marriages still applies. Marriage is still upheld even if considered void in the Philippines (e.g. marriage
void for being against public policy)

Mixed marriage in the Philippines

Where the marriage between a Filipino and a foreigner is celebrated in the Philippines, Philippine Law
is followed in both intrinsic and extrinsic validity of the marriage. Thus while mixed marriage between
cousins may be held valid when celebrated in a country allowing such, the same marriage would be held
void if celebrated in the Philippines.

II. MARRIAGE AS A STATUS

Aspects of Marriage

(Remember Pro-Per)

Personal Rights and Obligations - purely personal to them and are not ordinarily interfered with by the
courts.

Property Relations - the law lays down certain rules and judicial sanctions, as they may affect public
interest.

Governing Law over Personal Relations of Spouses in Conflict of Laws

47
 here, governed by Philippine law since we follow the nationality theory (Art. 15, New Civil Code)

Governing Law over Personal Relations of Spouses with Different Nationalities

Gen. Rule: National Law of the Husband

Reasons: Because

- when a woman marries a foreigner, she usually loses her nationality and instead follows that of the
husband;

- the husband is usually the head of the family

Two (2) Situations:

(Remember -- Alien Filipino - Filipina Alien)

A) When an alien woman marries a Filipino husband -- we apply the General Rule.

Moya Lim Yao v. Comm. of Immigration

Here, an alien woman who marries a Filipino husband ipso facto becomes a Filipino Citizen if she does not
suffer under any disqualification for naturalization as a Filipino Citizen.

B) What if a Filipina marries an alien husband? This is the Exception.

Our Constitution provides, she "shall retain her Philippine citizenship, unless by her act or omission, she is
deemed, under the law, to have renounced her citizenship."

Exception:

If the Filipino wife retains her Philippine Citizenship, the governing law is the national law of the
wife or the Philippine law, by parity of reasoning with Art. 80 of the Family Code on the property
relations of the husband and wife.

Reason: to protect the Filipino wife from the harshness of the personal law of the husband, [which usually
deprives her] of her basic, fundamental rights. Many alien husbands have divorced their Filipino wived
under their personal laws.

This should not, however, preclude the wives from claiming the rights due them under Philippine laws, i.e.
rights to support, custody to their minor children, heir of the husband, and in the division of the properties
acquired during marriage.

48
Governing Law over the Personal Relations of Spouses in Case there is a Change in Nationality

Three (3) Situations:

(Remember -- NN-HL-DBH)

A) Both have the same nationality, and thereafter, they acquire a new nationality by their
common act -- New national law to govern;

B) Husband alone changes nationality after marriage -- Last common nationality to govern,
to avoid prejudice to the wife who would suffer a change in her rights without any free exercise
of choice on her part (as provided in the Hague Convention of 1905);

C) Both retain their different nationalities -- There are two (2) suggestions:

i. The national law of both should govern (Author Rabel);

ii. The better solution is to apply the law of the husband (Author Wolf), since the result
will not be necessarily unfair to the wife, because the then national law may be even
more favorable to her.

Some Exceptions:

If the national law of the husband violates the public policy of the law of the forum, or the national law
of the wife happens to be the law of the forum, [the law of the wife should be applied as it is] intended to
protect the wife's rights.

Personal Rights and Duties of Spouses under Philippine Laws

(Remember -- RF-SM-RP)

A) Live together, observe mutual love, Respect and fidelity, and render mutual help and support (Art. 68,
Family Code);

B) they have the right to Fix together the family domicile (Art. 69, id.);

C) jointly responsible for the Support of the family (Art. 70);

D) Management of the household shall be the right and duty of both (Art. 71, id.);

E) in case of neglect, etc. aggrieved spouse may apply to the court for Relief (Art. 72, id.); and

49
 F) either may exercise any legitimate Profession, etc. (Art. 73, id.).

Conflicts Rules on the Property Relations of Spouses

Two (2) Situations: (Remember SD-P)

A) Same Nationality -- since we follow the Nationality theory, in the absence of a marriage settlement, it
is governed by Philippine law, regardless of the place of celebration and their residence (Art. 80, Family
Code)

B) Different Nationality -- still the Philippine law will govern, to protect the wife, considering that in
most mixed marriages, it is the wife who is the Filipino. (Minutes of the meetings, Civil Code Revision).
The previous rule under the New Civil Code was amended by the Family Code.

The Exceptions under Art. 80, Family Code are:

A) Both alien - general rule of Conflict of Law will apply;

B) With respect to extrinsic validity of contracts affecting real property, whether inside or out of the
Philippines, the lex situs will govern the formalities for the validity of the contract (Art. 15, New Civil
Code)

Governing Law when there is Change in the Citizenship of One, or Both of the Spouses

No change in the rules. Under the Doctrine of Immutability of Matrimonial Regime of the Spouses,
regardless of the change in the nationality, the original regime that prevailed at the start of the marriage
prevails.

Reason: For the protection of the Spouses, the Creditors, and against each other.

Immutability of Law Governing Regime

It is different with the Doctrine in No. 7. While the subsequent change of nationality by one, or both does
not affect the original property regime, the law that creates and governs said regime may change.

However, marriages solemnized before the new law takes effect are still governed by the old law.

III. ANNULMENT AND DECLARATION OF NULLITY OF MARRIAGE

50
Annulment vs Declaration of Nullity of Marriage

Annulment is the remedy if the marriage is voidable (valid until annulled) while Declaration of Nullity of
Marriage is the remedy for marriages which are void ab initio (void from the start.)

The following causes are grounds for Annulment under Article 45 of the Family Code:
1. Lack of parental consent in certain cases. If a party is 18 years or over, but below 21, and the
marriage was solemnized without the consent of the parents/guardian. However, the marriage is
validated if, upon reaching 21, the spouses freely cohabited with the other and both lived together
as husband and wife.

2. Insanity. A marriage may be annulled if, at the time of marriage, either party was of unsound
mind, unless such party after coming to reason, freely cohabited with the other as husband and
wife.

3. Fraud. The consent of either party was obtained by fraud, unless such party afterwards, with full
knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife.
Fraud includes: (i) non-disclosure of a previous conviction by final judgment of the other party of
a crime involving moral turpitude; (ii) concealment by the wife of the fact that at the time of the
marriage, she was pregnant by a man other than her husband; (iii) concealment of sexually
transmissible disease or STD, regardless of its nature, existing at the time of the marriage; or (iv)
concealment of drug addiction, habitual alcoholism or homosexuality or lesbianism existing at the
time of the marriage. However, no other misrepresentation or deceit as to character, health, rank,
fortune or chastity shall constitute such fraud as will give grounds for action for the annulment of
marriage.

4. Force, intimidation or undue influence. If the consent of either party was obtained by any of
these means, except in cases wherein the force, intimidation or undue influence having
disappeared or ceased, the complaining party thereafter freely cohabited with the other as husband
and wife.

5. Impotence. At the time of marriage, either party was physically incapable of consummating the
marriage with the other, and such incapacity continues and appears to be incurable. Impotence is
different from being infertile.

51
 6.STD. If, at the time of marriage, either party was afflicted with a sexually-transmissible disease
found to be serious and appears to be incurable. If the STD is not serious or is curable, it may still
constitute fraud (see No. 3 above).

On the other hand, below are grounds for declaration of nullity of marriage:
1. Minority (those contracted by any party below 18 years of age even with the consent of
parents or guardians).

2. Lack of authority of solemnizing officer (those solemnized by any person not legally
authorized to perform marriages, unless such marriages were contracted with either or both
parties believing in good faith that the solemnizing officer had the legal authority to do so).

3. Absence of marriage license (except in certain cases).

4. Bigamous or polygamous marriages (except in cases where the other spouse is declared as
presumptively dead).

5. Mistake in identity (those contracted through mistake of one contracting party as to the
identity of the other).

6. After securing a judgement of annulment or of absolute nullity of marriage, the parties, before
entering into the subsequent marriage, failed to record with the appropriate registry the: (i)
partition and distribute the properties of the first marriage; and (ii) delivery of the childrens
presumptive legitime.

7. Incestuous marriages (between ascendants and descendants of any degree, between brothers
and sisters, whether of the full or half blood).

8. Void by reason of public policy. Marriages between (i) collateral blood relatives whether
legitimate or illegitimate, up to the fourth civil degree; (ii) step-parents and step-children; (iii)
parents-in-law and children-in-law; (iv) adopting parent and the adopted child; (v) surviving
spouse of the adopting parent and the adopted child; (vi) surviving spouse of the adopted child
and the adopter; (vii) an adopted child and a legitimate child of the adopter; (viii) adopted
children of the same adopter; and (ix) parties where one, with the intention to marry the other,
killed that other persons spouse, or his or her own spouse.

52
 9. Psychological Incapacity. Psychological incapacity, which a ground for annulment of
marriage, contemplates downright incapacity or inability to take cognizance of and to assume
the basic marital obligations; not a mere refusal, neglect or difficulty, much less, ill will, on
the part of the errant spouse. Irreconcilable differences, conflicting personalities, emotional
immaturity and irresponsibility, physical abuse, habitual alcoholism, sexual infidelity or
perversion, and abandonment, by themselves, also do not warrant a finding of psychological
incapacity. We already discussed the guidelines and illustrations of psychological incapacity,
including a case involving habitual lying, as well as the steps and procedure in filing a
petition.

It is important to know the difference between annulment and declaration of nullity of marriage as they
have different legal consequences. Since a voidable marriage is valid until annulled:
1. It can be convalidated either by free cohabitation or prescription
2. The same property regime as in a valid marriage is established between the spouses
3. The children are legitimate if conceived before the decree of annulment
4. Marriage cannot be attacked collaterally
5. Marriage cannot be impugned after death of the spouses

Void marriages, being absolutely inexistent, have the following effects:

1. It cannot be convalidated
2. Only co-ownership is the property relationship
3. Children are illegitimate (except if under 36 or 53)
4. Marriage may be attacked directly or collaterally
5. Marriage may still be impugned even after the death of the spouses

Final Judgment of court needed

Just because a marriage is null and void or an absolute nullity, it does not mean that the parties
may freely enter into another marriage. A final declaration by the courts is still warranted by our laws.
Article 40 of the Family Code states:

The absolute nullity of a previous marriage may be invoked for purposes of remarriage on the
basis solely of a final judgment declaring such previous marriage void.

What the law wanted was for a person not to assume that his or her marriage is null and void, even
if such be the fact, unless and until a judicial declaration of nullity of marriage is issued by the courts
(Wiegel vs Sempio-Dy.) It protects the spouses from being charged with bigamy.

53
Conflict Rules on Annulment and declaration of Nullity of Marriage

Considering that it is lex loci celebrationis which is usually applied to determine the validity of the
marriage, it is the same rule which determines whether a marriage is voidable or not, and whether it is void or not.
The grounds provided for by the law alleged to be violated in the place where the marriage is celebrated governs the
annulment or declaration of nullity of marriage. For Filipinos married abroad, the additional grounds are the
exceptions enumerated in Article 26 as above stated while for foreigners, highly immoral and incestuous marriages.

Jurisdiction
Following the nationality theory, our courts have jurisdiction over annulment and nullity suits where the
litigants are Filipinos. Domiciliaries of the Philippines may also file such suits. In other countries, the rule is that the
courts of the parties domicile have jurisdiction. The reason for this rule is for the parties not to be necessitated to
travel to another country just to file such cases akin to forum non conveniens

IV. ABSOLUTE DIVORCE

Situation:

Q: An alien divorces Filipino spouse in his home country and comes back to the Philippines to ask for legal
separation and separation of property against his Filipino wife on the ground of the latter's adultery. Will it prosper?

A: No, because the spouse who accuses the other must be the offended spouse, i.e. Must still be married to the other.
Here, the alien no longer has legal standing to sue because the marriage has already been severed. (Pilapil v. Ibay-
Somera, 174 SCRA 653)

Compare the Pilapil Case with Van Dorn v. Romillo, 139 SCRA 159

The two cases are similar. The Van Dorn v. Romillo is a case for accounting and management of a business
under the name of Alice Reyes which was allegedly a conjugal property. The Supreme Court said that the
divorce obtained by the husband against Alice released the latter from the marriage, thus he no longer had
the legal standing to sue as husband in view of the divorce.

Rules on the Validity of Foreign Divorces obtained by Foreigners abroad:

I. Under the Hague Convention, a foreign divorce will be recognized in the contracting states if, at the date of
the filing of the proceedings:

54
 (A) The petitioner/respondent had his habitual residence in the state where the divorce was obtained;

(B) if both spouses were nationals of said state; or

(C) although the petitioner was a national of another country, he had his residence in the place where
the divorce was obtained.

II. In the US, a state has the duty to recognize a divorce obtained in a sister state if the spouses were domiciled in
the latter state.

III. A divorce obtained in a foreign country would be recognized under the same circumstances that a divorce
obtained from a sister state is given recognition.

IV. In the Philippines, if both spouses are aliens, we recognize a decree of divorce obtained by them abroad if
valid under their national law. (Recto v. Harden, GR No. 6897, Nov. 29, 1956)

V. If one of the spouses is a Filipino, we also recognize the divorce obtained by the alien spouse abroad.
(Pilapil v. Ibay-Somera, supra.)

Situation:

Q: Suppose a Filipino spouse divorces his Filipino Spouse, then acquires naturalization in another country which
allows divorce, should we recognize the divorce and allow the other Filipino spouse to remarry?

A: No, we should not. Art. 26, par. 2 of the Family Code cannot apply, because the spouse is still a Filipino when he
divorced his spouse. Hence, the situation is governed by Philippine laws which do not recognize divorce.

Situation:

Q: What if the Filipino spouse first gets naturalized in a country which allows divorce, then divorces his Filipino
spouse under his new national law, should we recognize the divorce as having dissolved the former marriage
between the spouses?

A: Two Cases in Point:

(A) Llorente v. CA, GR No. 124371, Nov. 23, 2000

Ruling -- the Supreme Court applied the Pilapil and Van Dorn Decisions (id.) and held that Llorente was no
longer a Filipino when he divorced Paula, the Nationality principle did not apply to him anymore so that we
should already recognize the divorce obtained by Llorente from Paula as a matter of comity.

55
(B) Next came Republic v. Obrecido, GR No. 154380, Oct. 5, 2005

Ruling -- the Supreme Court, although conceding that the provision in question on its face does not appear
to govern the case at hand and seems to apply only to cases where at the time of the celebration of
marriage, the parties were a Filipino and a foreigner, xxx, held, however that provision should be
interpreted to allow a Filipino citizen who had been divorced by his former Filipino spouse after the latter
had acquired foreign citizenship and remarried, also to remarry.

V. LEGAL SEPARATION/RELATIVE DIVORCE

Legal Separation

or Relative Divorce is only separation from bed and board but the parties remain married.

Conflicts Rules on Legal Separation

a. If parties are of same nationality : grounds for granting legal separation are those given by their personal
law (whether national law or domiciliary law, as the case may be)
b. If parties are of different nationality : grounds for granting legal separation are those under the personal
law of the husband as well as those available under the personal law of the wife

Jurisdiction: What court should it be filed?

a. In case of aliens: not assumed by the forum UNLESS the national law of the parties is willing to
recognize its jurisdiction
b. Foreigners in the Philippines: foreigners may ask for legal separation in our courts, even if they didnt get
married in this country. The court MUST HAVE jurisdiction over both parties.
Is it necessary that the cause for legal separation take place in this country?

No. There is no such requirement in the Family Code. As long as the court has jurisdicino
over the parties; and that the procedural requirements of the Rules of Court are complied with. (Art.
99, New Civil Code has been expressly repealed by Art 254, Family Code)

c. Most countries assume jurisdiction BASED on domicile of one of the parties OR matrimonial domicile.
(Rationale: It is that which they are most intimately connected)

Grounds for Legal Separation

According to Article 55 of the Family Code, the following are the grounds for legal separation

56
 a. Repeated physical violence or grossly abusive conduct against the petitioner, a common child, or child of
the petitioner
b. Physical violence or moral pressure to compel the petitioner to change religious or political affiliation
c. Attempt to corrupt or induce the petitioner, a common child or a child of the petitioner to engage in
prostitution, or connivance in such corruption or inducement
d. Final judgment sentencing the respondent to imprisonment of more than 6 years, even if pardoned
e. Drug addiction or habitual alcoholism of the respondent
f. Contracting by the respondent of a subsequent bigamous marriage, whether in the Philippines or abroad
g. Lesbianism or homosexuality of the respondent
h. Sexual infidelity or perversion
i. Attempt by the respondent against the life of the petitioner
j. Abandonment of petitioner by respondent without justifiable cause for more than one year

Defenses to Legal Separation

According to Article 56 of the Family Code, the following are the defences to legal separation under the Philippine
internal law

a. Condonation of the offense or act complained of

b. Consent of the aggrieved party to the commission of the act or offense complained of
c. Connivance between the parties in the commission on the offense or act constituting the ground for legal
separation
d. Where both parties have given ground for legal separation
e. Collusion between the parties to obtain legal separation
f. Prescription

Prescriptive Period for Filing of the action

5 years from the time of the occurrence of the cause (Art. 57, FC)

Laperal vs Republic

Doctrine: The wife who has been granted legal separation cannot petition to be allowed to revert to her
maiden name. They are still married and this is true whether she is the guilty party or not.

The case for legal separation is purely a personal one

In the case one of the parties dies during the pendency of the case, the case does not survive and it is
dismissed. The case is purely a personal one. This remains even if properties are involved.

57
Inheritance

In the case of the offended spouse:

The offended spouse can still inherit from the guilty spouse.

(Rationale: They are still married)

In the case of guilty spouse:

The guilty spouse is disqualified from inheriting from the offended spouse and the provisions of
the will that is favourable to the former are revoked by operation of law

(Basis: Art. 63(4),Family Code)

Requirement: There must be a DECREE OF LEGAL SEPARATION in order to disqualify thr

guilty spouse

(Basis: Article 1002, Civil Code)

VI. JURISPRUDENCE ON RECOGNITION OF FOREIGN DIVORCE

Doreen Medina vs Michiyuki Koike, G.R. No. 215723, July 27,, 2016

The Philippine law does not provide for absolute divorce; hence our courts cannot grant it. However, Art.
26 of the Family Code allows a Filipino spouse to contract a subsequent marriage in case the divorce is validly
obtained by an alien spouse capacitating him or her to remarry.

The law confers jurisdiction on Philippine courts to extend the effect of foreign divorce decree to a Filipino
spouse without undergoing trial to determine the validity of the dissolution of marriage

In this case, after RTC denied the petition for judicial recognition of foreign divorce, Doreen filed petition
for review on certiorari under Rule 45, Rules of Court. The Court denied the petition and referred the case to the CA
stating that the validity of the divorce decree and the existence of pertinent laws of Japan on the matter are
essentially factual and the issue raised in the instant appeals is a question of fact that is beyond the ambit of Rule 45
petition for review.

Garcia vs Recio, G.R. No. 138322, October 2, 2001

In order for a divorce obtained abroad by the alien spouse to be recognized in our jurisdiction, it must be
shown that the divorce decree is valid according to the national law of the foreigner. Both the divorce decree and the

58
governing personal law of the alien spouse who obtained the divorce must be proven. Since our courts do not take
judicial notice of foreign laws and judgment, our law on evidence requires that both the divorce decree and the
national law of the alien must be alleged and proven like any other fact.

Before a foreign judgment is given presumptive evidentiary value, the document must first be presented
and admitted as evidence. A divorce obtained abroad is proven by the divorce decree itself. Under Sections 24 and
25 of Rule 132, on the other hand, a writing or document may be proven as a public or official record of a foreign
country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which
the record is kept and (b) authenticated by the seal of his office.

The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an
Australian Family Court. However, appearance is not sufficient, compliance with the aforementioned rules on
evidence must be demonstrated.

Corpuz vs Sto. Tomas, G.R. No. 186571, August 10, 2010

The foreign judgment and its authenticity must be proven as facts under our rules on evidence, together
with the aliens applicable national law to show the effect of the judgment on the alien himself or herself.Section 24,
Rule 132 of the Rules of Court requires proof, either by (1) official publications or (2) copies attested by the officer
having legal custody of the documents. If the copies of official records are not kept in the Philippines, these must be
(a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippines foreign service
stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.

In the case at bar, Gerbert attached to his petition a copy of the divorce decree as well as the required
certificates proving its authenticity, but failed to include a copy of the Canadian law on divorce. Hence, the Court
deemed it more appropriate to remand the case to the RTC to determine whether the divorce decree is consistent
with the Canadian divorce law.

A judgment of divorce is a judicial decree, although a foreign one, affecting a persons legal capacity and
status that must be recorded. The law and submission of the decree by do not ipso facto authorize the decree
registration. Act No. 3753 should be read in relation with requirement of a judicial recognition of a foreign judgment
before it can be given res judicata effect.

The recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of
special proceedings is precisely to establish the status or right of a party or a particular fact.

Minori Fujiki vs Maria Paz Marinay, G.R. No. 196049, June 26, 2013

59
 A recognition of a foreign judgment is not an action to nullify a marriage.Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriaged (A.M. No. 02-11-10-SC) does not apply in a
petition to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a
foreign country.While the Philippines has no divorce law, the Japanese Family Court judgment is fully consistent
with Philippines public policy, as bigamous marriages are declared void from the beginning under Article 35(4) of
the Family Code. Thus, Fujiki can prove the existence of the Japanese Family Court judgment in accordance with
Rule 132, Sections 24 and 24, in relation to Rule 39, Section 48(b) of the Rules of Court.Section 48(b), Rule 39 of
Rules of Court provides that a foreign judgment or final order against a person creates a presumptive evidence of a
right as between the parties and their successors-in-interest by a subsequent title.

Philippine courts exercise limited review on foreign judgment. Upon recognition of the foreign judgment, this right
becomes conclusive and judgment serves as a basis for the correction or cancellation of entry in the civil registry in
a Rule 108 proceeding itself, as the object of a special proceeding is precisely to establish the status or right of a
party or a particular fact.

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 WILLS AND SUCCESION
I. Introduction

Conflict of laws occurs frequently in the area of wills and succession particularly when there is the
presence of a foreign element. Such foreign element can come in many forms such as a will executed abroad, a
Filipino dying abroad leaving behind properties in the Philippines, a foreigner passing away within the Philippine
territory with properties in the Philippines and overseas, or a testator wishing in his last will and testament that a
foreign law should govern the disposition of his estate. These result in the involvement of the law of a foreign nation
and the corresponding need to harmonize such law with Philippine laws in order to determine the successional rights
of individuals. The problem does not occur when Philippine laws are similar to those of other countries. However,
the reality is many foreign countries have starkly different laws that will have a significant bearing in the
determination of successional rights of parties.

The New Civil Code provides that a will or testament is an act whereby a person is permitted, with the
formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his
death.51

From the perspective of conflict of laws, a will is an involuntary transfer of property. This is because the
will, in itself, does not transfer the title although the act of executing ones will and testament is a voluntary act. It is
only upon the death of the owner that the will comes into effect and since death is involuntary, making a will
becomes an involuntary transfer of property. 52 Per se, a will is governed by the proper law which is the law of the
domicile of the testator in common law countries and the national law of the testator in civil law countries.

Two theories or systems are present in determining the proper law for the transmission of successional
rights: the unitary or single system and the split or scission system.

Under the unitary or single system, only one law determines transmission of real as well as personal
properties. In countries following the nationality theory like the Philippines, the national law of the deceased
governs the transmission of both real as well as personal properties, while in common law countries or countries that
follow the domiciliary theory, it is the law on domicile of the deceased that usually governs.

However, under the split or scission system, which England and the United States adopt, the lex situs
governs the succession on real property, while lex domicilii or the law of the domicile of the deceased at the time of
his death governs succession on movable or personal property.

51
CIVIL CODE, Art, 783.
52
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Commets, 2000, citing Minor,
supra, Chap. I, note 4, at 332.

61
 As already discussed above, the Philippines follows the unitary or single system. As stated in the New Civil
Code, 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 regulatd by the national lawof the
person whose succession is under consideration, whatever may be the nature of the property and regardless of the
country wherein said property may be found.53

II. Extrinsic Validity of Wills

Extrinsic validity pertains to the forms and solemnities in the making of a will. This includes the age and
testamentary capacity of the testator and the form of the will (i.e. oral or written, public or private instrument,
notarial or holographic, the number of witnesses, etc.).

A Filipino citizen making a will overseas may comply with the formalities prescribed under Philippine law
(lex nationalii) or those formalities established by the law of the country where that will is executed (lex loci
celebrationis). The pertinent conflict-of-law rules are found in Articles 17 and 815 of the Civil Code, both referring
to the law of the place where the will was executed as the law governing the forms and solemnities of a will.

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

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

Prohibitive laws concerning persons, their acts or property, and those which have, for their object,
public order, public policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

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

However, Coquia and Aquiling-Pangalangan54 argues that there is no express provision for the lex
nationalii as the proper law for wills written abroad by Filipinos. Dr. Arturo Tolentino, member of the Code

53
CIVIL CODE, Art. 16 (2).
54
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Commets, 2000

62
Commission, comments that although Article 815 follows the general rule of lex loci celebrationis expressed in
Article 17 of the Code, the Code did not mean to invalidate the will of a Filipino made in conformity with the
Philippine law. To illustrate his point, he draws an analogy with the rules applicable to aliens. Under Articles 816
and 817, an alien who makes a will in a place other than in the Philippines is permitted to follow the laws of his own
country. Article 816 even allows an alien, in executing a will in a foreign country other than his own, to follow the
formalities prescribed by the Philippine law. Under the foregoing provisions the alien has three laws to choose from,
namely his national law (lex nationalii), Philippine law (lex domicilii) or the law of the place where he makes the
will (lex loci celebrationis). It cannot be assumed that the Code places the Filipino citizen in a worse position than
the alien in relation to our law. However, the Code should have expressly stated this considering the general
provision in Article 17.55
In sum the conflict-of-law rules on extrinsic validity of wills in the Philippines are as follows:

1. A Filipino making a will abroad, may comply with the formalities of Philippine law (lex nationalii) or the
formalities of the law of the place where he was at the time of the execution of the will (lex loci celebrationis).56
Hence, an OFW working in Singapore may execute a will in accordance with Philippine law or Singaporean law.

2. An alien making a will abroad, may comply with the formalities of the law of the country of which he is a citizen
(lex nationalii), the law of his domicile (lex domicilii)57, or the law of the place where he was at the time of the
execution of the will (lex loci celebrationis)58

3. An alien making a will in the Philippines, may comply with the formalities of the law of the country of which he
is a citizen (lex nationalii) or of Philippine law (lex loci celebrationis)

4. As for a holographic will, which must be entirely written, dated and signed by the hand of the testator himself, it
is subject to no other form and may be made in or out of the Philippines, and need not be witnessed. 59

IN RE ESTATE OF JOHNSON
G.R. No. L-12767, November 16, 1918
39 Phil. 156 (1918)

Emil Johnson, a native of Sweden and a naturalized US citizen, died in Manila, leaving a holographic will
by which he dispose of his estate. This document was a written instrument signed by the testator and two witnesses,

55
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Commets, 2000 citing III
Tolentino, Civil Code of the Philippines, 101 (1990)
56
CIVIL CODE, Art. 815.
57
CIVIL CODE, Art. 816.
58
CIVIL CODE, Art. 17.
59
CIVIL CODE, Art. 810.

63
instead of three, as required by Sec. 618 of the Code of Civil Procedure, thus could not be proved under this
provision.

However, a petition was filed with the CFI of Manila for the probate of his will on the ground that Johnson
was, at the time of his death, a citizen of Illinois, USA. Furthermore, the will was duly executed in accordance with
the laws of that state and hence, could be properly probated under Sec. 636 of the Code of Civil Procedure.

The document was declared to be legal and admitted to probate. Johnson left his estate to his brother,
Victor; his parents in Sweden; his daughter from his first-marriage , Ebba Ingeborg; his wife Alejandra Ibaez;
Simeona Ibaez; and his five children. Ebba appeals to annul the decree of probate and put the estate into intestate
administration, thus preparing the way for the establishment of her claim as the sole legitimate heir.

STREET, J.:

Intimately connected with the question of the jurisdiction of the court, is another matter which may be
properly discussed at this juncture. This relates to the interpretation to be placed upon Section 636 of the Code of
Civil Procedure. The position is taken by the appellant that this section is applicable only to wills of aliens, and in
this connection attention is directed to the fact that the epigraph of this section speaks only of the will made here by
an alien and to the further fact that the word "state" in the body of the section is not capitalized. From this it is
argued that Section 636 is not applicable to the will of a citizen of the United States residing in these Islands.

We consider these suggestions of little weight and are of the opinion that, by the most reasonable
interpretation of the language used in the statute, the words "another state or country" include the United States and
the States of the American Union, and that the operation of the statute is not limited to wills of aliens. It is a rule of
hermeneutics that punctuation and capitalization are aids of low degree in interpreting the language of a statute and
can never control against the intelligible meaning of the written words. Furthermore, the epigraph, or heading, of a
section, being nothing more than a convenient index to the contents of the provision, cannot have the effect of
limiting the operative words contained in the body of the text. It results that if Emil H. Johnson was at the time of his
death a citizen of the United States and of the State of Illinois, his will was provable under this section in the courts
of the Philippine Islands, provided the instrument was so executed as to be admissible to probate under the laws of
the State of Illinois.

We are thus brought to consider the second principal proposition stated at the outset of this discussion,
which raises the question whether the order of probate can be set aside in this proceeding on the other ground stated
in the petition, namely, that the testator was not a resident of the State of Illinois and that the will was not made in
conformity with the laws of that State.

64
 The order of the Court of First Instance admitting the will to probate recites, among other things:

"That upon the date when the will in question was executed Emil H. Johnson was a citizen of the
United States, naturalized in the State of Illinois, County of Cook, and that the will in question
was executed in conformity with the dispositions of the law of the State of Illinois."

We consider this equivalent to a finding that upon the date of the execution of the will the testator was a
citizen of the State of Illinois and that the will was executed in conformity with the laws of that State. Upon the last
point the finding is express; and in our opinion the statement that the testator was a citizen of the United States,
naturalized in the State of Illinois, should be taken to imply that he was a citizen of the State of Illinois, as well as of
the United States.

The naturalization laws of the United States require, as a condition precedent to the granting of the
certificate of naturalization, that the applicant should have resided at least five years in the United States and for one
year within the State or territory where the court granting the naturalization papers is held; and in the absence of
clear proof to the contrary it should be presumed that a person naturalized in a court of a certain State thereby
becomes a citizen of that State as well as of the United States.

xxx

The proof adduced before the trial court must therefore be taken as showing that, at the time the will was
executed, the testator was, as stated in the order of probate, a citizen of the State of Illinois. This, in connection with
the circumstance that the petition does not even so much as deny such citizenship but only asserts that the testator
was a resident of the Philippine Islands, demonstrates the impossibility of setting the probate aside for lack of the
necessary citizenship on the part of the testator. As already observed, the allegation of the petition on this point is
wholly insufficient to justify any relief whatever.

Upon the other point as to whether the will was executed in conformity with the statutes of the State of
Illinois we note that it does not affirmatively appear from the transcription of the testimony adduced in the trial
court that any witness was examined with reference to the law of Illinois on the subject of the execution of will. The
trial judge no doubt was satisfied that the will was properly executed by examining Section 1874 of the Revised
Statutes of Illinois, as exhibited in volume 3 of Starr & Curtis's Annotated Illinois Statutes, 2nd ed., p. 426; and he
may have assumed that he could take judicial notice of the laws of Illinois under Section 275 of the Code of Civil
Procedure. If so, he was in our opinion mistaken. That section authorizes the courts here to take judicial notice,
among other things, of the acts of the legislative department of the United States. These words clearly have
reference to Acts of the Congress of the United States; and we would hesitate to hold that our courts can, under this
provision, take judicial notice of the multifarious laws of the various American States. Nor do we think that any such

65
authority can be derived from the broader language, used in the same section, where it is said that our courts may
take judicial notice of matters of public knowledge "similar" to those therein enumerated. The proper rule we think
is to require proof of the statutes of the States of the American Union whenever their provisions are determinative of
the issues in any action litigated in the Philippine courts.

Nevertheless, even supposing that the trial court may have erred in taking judicial notice of the law of
Illinois on the point in question, such error is not now available to the petitioner, first, because the petition does not
state any fact from which it would appear that the law of Illinois is different from what the court found, and,
secondly, because the assignment of error and argument for the appellant in this court raises no question based on
such supposed error

Extrinsic Validity of Joint Wills

Article 818 of the Civil Code states that: Two or more persons cannot make a will jointly or in the same
instrument, either for their reciprocal benefit of for the benefit of a third person. Joint wills whether executed by
Filipinos in the Philippines or abroad, even if such foreign country allows it, are considered void in the Philippines
on grounds of public policy. A joint will is prohibited because: (1) A will is a purely personal and unilateral act and
this is defeated if two or more persons make their will in the same instrument; (2) It is contrary to the revocable
character of a will. If one testator revokes his will by burning the document, the other testator would have no
instrument left containing her testamentary dispositions; (3) A joint will, if mutual or reciprocal, may expose a
testator to undue influence and may even tempt one of the testators to kill the other. 60

The Philippine Supreme Court explains that the provision of Article 818 of the Civil Code prohibiting the
execution of a joint will is wise and in keeping with public policy. The reason for this provision is to prevent
potential overreaching especially between the husband and wife. The Court points out that when a will is made
jointly or in the same instrument, the spouse who is more aggressive, stronger in will or character and dominant is
liable to dictate the terms of the will for his or her benefit or for that of third persons whom he or she desires to
favor. And, where the will is not only joint but reciprocal, either one of the spouses who may happen to be
unscrupulous, wicked, faithless or desperate, knowing as he or she does the terms of the will whereby the whole
property of the spouse both conjugal and paraphernal goes to the survivor, may be tempted to kill or dispose of the
61
other. Thus, the joint will executed by the husband and the wife was held null and void. Even if the will was
admitted upon the death of the husband, which the Court said was erroneous, the first decree of probate affects only
the estate of the husband. The estate of the wife should pass upon her death to her intestate heirs and not to the
testamentary heir unless some other valid will is shown to exist in favor of the latter or unless the testamentary heir
is her only heir.

60
Dacanay v. Florendo, 87 Phil. 326 (1950).
61
87 Phil 144 (1950).

66
 Although the law expressly invalidates joint wills executed by Filipinos in a foreign country which allows
62
such, it is silent about joint wills executed in the Philippines by aliens whose national laws do not prohibit it. We
suggest that in accordance with the expressed policy in Article 819 of the Civil Code, said will should not be
probated if it affects heirs in the Philippines.

Extrinsic Validity of Holographic Wills

The rules contained in Articles 816 and 817 on wills made by aliens abroad or in the Philippines, apply to
holographic wills.

Article 810 of the Civil Code defines a holographic will as one entirely written, dated and signed by the
hand of the testator himself. It is not subject to any other form, need not be witnessed and may be made in or out of
the Philippines.

A holographic will, also called the autographic will, has been introduced by the Civil Code as one of the
means to facilitate the secret expression of the desire by the testator. 63 A holographic will is the simplest and most
convenient method of making a last testament which does not even require notarization. It guarantees absolute
secrecy because it can be made without anyone else knowing about it. 64

An eminent civil law jurist, Justice Jose B.L. Reyes, however, doubts the wisdom of allowing holographic
wills. He points out that, holographic wills are peculiarly dangerous in the case of persons who have written very
little since the validity of these wills depends exclusively on the authenticity of the handwriting. Its simplicity is an
invitation to forgery, since its text may be extremely short, such as, all to X or the free part to X plus the date
and signature. Such short documents can confuse even handwriting experts especially in the absence of
contemporary writing standards.65

BABCOCK TEMPLETON v. RIDER BABCOCK

G.R. No. L-28328, October 2, 1928
52 Phi. 130 (1928)

Beatrice Babcock Templeton filed a petition to secure probate of a paper writing purporting to express the
wishes of Jennie Rider Babcock with reference to the post mortem disposition of all her property. The handwritten
instrument was of a testamentary character but was not executed as a will under the provisions of law governing the

62
CIVIL CODE, Art. 819.
63
Fernando v. Villalon, 3 Phil. 386 (1904).
64
Report of the Code Commission, at 104.
65
J.B.L. Reyes, 15 Lawyers Journal 556 (1950).

67
execution of wills made in the Philippines. Hence, it was not offered for probate under Sec. 618 of the Code of Civil
Procedure but under Sec. 636, which authorizes probate by our courts of a will made within the Philippines by a
citizen of another country, when such will is executed in accordance with the law of the country of which the
testator is a citizen and which might be proved under the law of such country.

It was alleged in the petition that Rider Babcock was at the time of her death a resident of California,
though temporarily residing in Manila, and that the parties have agreed that the paper could be proved in California
as her holographic will. The sole issue now was whether Rider Babcock, at the time the will was made, was a citizen
of California, as required by Section 636 of our Code of Civil Procedure. However, under the Fourteenth
Amendment to the US Constitutions, the citizenship of a person born in the United States, as was the testatrix, is
dependent upon the place of residence or domicile. Babcock Templeton, mother of the three children who are
principal beneficiaries of the will, contends that Rider Babcock acquired a legal domicile in California, which she
never lost, by residence therein over two periods of time between 1917 and 1923. William, the brother of Rider
Babcock resists the probate of the will on the ground that the testatrix had never acquired domicile in California, or
that, if she had, such domicile had been lost.

STREET, J.:

The finding of the trial court to the effect that the deceased had acquired a domicile in the State of
California is in our opinion based upon facts which sufficiently support said finding. In particular, we are of the
opinion that the trial court committed no error in attaching importance to the circumstance that the deceased had
voted in California elections. Though not of course conclusive of acquisition of domicile, voting in a place is an
important circumstance and, where the evidence is scanty, may have decisive weight. The exercise of the franchise
is one of the highest prerogatives of citizenship, and in no other act of his life does the citizen identify his interests
with the state in which he lives more than in the act of voting.

This record supplies no material with which to refute the conclusion of the trial court that a domicile was
thus acquired by the testatrix in the state of California; and what we consider the more critical question is whether or
not the domicile thus acquired was subsequently lost by removal from said state. But upon this point also, we are of
the opinion that the conclusion of the trial court, to the effect that acquired domicile had not been lost, is in
conformity with the evidence. It is a recognized rule that the intention with which removal is made from a particular
state determines whether or not the domicile is abandoned; and intention is revealed only in the acts and declaration
of the person concerned.

In the case before us there are no declarations of the testatrix in evidence which would tend to show that,
upon removal to New York, she had any intention of acquiring a legal domicile in that state. On the contrary her
short stay there and her repeated statements made thereafter show that she could not possibly have had any intention

68
of making that state a place of permanent abode. As was pointed out by this court in In Re Estate of Johnson (39
Phil., 156), a person transferring his domicile from one state of the American Union to another loses his domicile in
the state of his earlier abode upon acquiring a domicile, or citizenship, in the state of his new abode. The acquisition
of the new legal domicile extinguishes the old. Certainly in this case it cannot be said with any propriety that the
domicile of the testatrix in California was suppressed by the acquisition on a new domicile in New York State.
But it is said that, even supposing that the testatrix had not acquired a domicile in New York, yet she was a resident
of the Philippine Islands at the same time of her death, and that, having established herself in these Islands as a place
of permanent abode, her will should not be admitted to probate as the will of a citizen of another state. But the proof
shows that however long the testatrix had resided in the Philippine Islands, she at no time had any intention of
residing here permanently. In the contrary, her repeated declarations reveal a fixed intention of returning ultimately
to the United States.

Again, it is a rule that a citizen of the United States cannot acquire citizenship in the Philippine Islands by
residence here, however long continued (In Re Estate of Johnson, 39 Phil., 156). The testatrix therefore remained at
the time of her death a citizen of the United States. Her will is therefore provable under section 636 of the Code of
Civil Procedure as the will of a citizen of another state or country; and the only question to be determined in this
case is, which state of the American Union has the best claim to her citizenship, a question, which, as we have
already seen, turns upon domicile; and there is no other state whose citizenship she can claim, according the
evidence in this record, with as good right as the State of California. Massachusetts, the place of her marital abode,
has not been entered in the competition, and we must decide between California and New York. As between these
two states, California was surely the state of her legal domicile, acquired by choice and by residing therein.
Furthermore, this California domicile has not been supplanted by a later domicile acquired in New York. It results
that the trial court committed no error in considering the testatrix a citizen of the State of California, for the purpose
of admitting this will to probate.

The judgment will therefore be affirmed, and it is so ordered, with costs against the appellant.

III. Intrinsic Validity of Wills

Intrinsic validity deals with the order of succession, the amount of successional rights each heir gets, and
such other matters that fall under the term substance as distinguished from forms and solemnities of wills as covered
by extrinsic validity.

As a general rule, conflicts-of-law rules on the intrinsic validity of wills are determined by the lex
nationalii of the deceased in countries that follow the domiciliary theory. Under the unitary system adopted from the
Roman Law, the intrinsic validity of wills is governed by the national law of the decedent. Article 16, paragraph 2 of
the Civil Code reads: However, intestate and testamentary succession, both with respect to the order of succession

69
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.

In the case of Miciano v. Brimo,66 the court decided that although Andre Brimo opposed his brothers
intention to have Philippine laws apply he was not deemed to have contested the legacy, because the choice-of-law
clause in the will was contrary to law. Out laws apply the lex nationalii of the decedent to determine the intrinsic
validity of a will and this law was purposefully disregarded by the decedent. The Court considered the clause as not
imposed, and shall in no manner prejudice the heir even if the testator should otherwise provide.

The Court put aside the clear intention of the testator for Philippine law to control the case and in the same
breath presumed that his national law, Turkish law, was the same as Philippine law because of failure to prove what
Turkish law was. Considering the policy of giving primacy to the last will and testament of the decedent, the court
could have respected the decedents wishes by applying a policy centered approach instead of the mechanical
application of lex nationalii.

Using the most significant relationship approach, the forum should have identified the state with which the
transaction had the most significant contacts. Since the decedent was a resident of the Philippines, executed his will
here, intended Philippine law to govern and moreover, the will concerned properties located in the Philippines, the
court could very well have justified applying Philippine law. The Philippines was there the case had its most
significant contacts; in contrast to Turkish law which sole connection to the decedent was as his national law.

The other method the court could have employed to reach the same result without flouting the testators
will, was the escape devise of disingenuous characterization. Since the applicable choice-of-law rule was
determined by how the issue was characterized by the court, it could have disingenuously characterized the main
issue so that it would call for the forums application of its own substantive law. In this case, the court could have
characterized the case as one of property and not succession. Since the property was situated in the Philippines,
Philippine law would likewise have applied as the lex rei sitae.

CAYETANO v. LEONIDAS
G.R. No. L-54919, May 30, 1984
129 SCRA 522

Adoracion Campos died, leaving her father, petitioner Hermogenes Campos, and her sisters, private
respondents Nenita Paguia, Remedios Lopez, and Marieta Medina as surviving heirs. As Hermogenes Campos was
the only compulsory heir, he executed an Affidavit of Adjudication whereby he adjudicated unto himself the

66
50 Phil. 867 (1924), see Chapter IX

70
ownership of the entire estate of the deceased. Nenita Paguia, on the other hand, filed a petition for the reprobate of
a will of the deceased which was allegedly executed in the US and for her appointment as administratrix of the
estate. It was alleged in the petition that the deceased was an American citizen at the time of her death and a
permanent resident of Pennsylvania, USA; that the deceased died in Manila while temporarily residing with her
sister; and that during her lifetime, the deceased made her last will and testament according to the laws of
Pennsylvania, which after her death was probated, and registered in the same state.

The will of the deceased was admitted to and allowed probate in the Philippines and Paguia was appointed
administratrix.

Thereafter, Campos filed a petition praying that the order allowing the will be set aside on the ground that
the withdrawal of the opposition to the reprobate which he had earlier filed, was secured through fraudulent means.
The lower court dismissed the petition for relief for failure to present evidence in support thereof. The motion for
reconsideration filed was likewise denied. Hence, this petition.

Meanwhile, Campos died and left a will, appointing Polly Cayetano as the executrix of his last will and
testament, who substituted him as petitioner.

GUTIERREZ, JR., J.:

The third issue raised deals with the validity of the provisions of the will. As a general rule, the probate
court's authority is limited only to the extrinsic validity of the will, the due execution thereof, the testatrix's
testamentary capacity and the compliance with the requisites or solemnities prescribed by law. The intrinsic validity
of the will normally comes only after the court has declared that the will has been duly authenticated. However,
where practical considerations demand that the intrinsic validity of the will be passed upon, even before it is
probated, the court should meet the issue. (Maninang vs. Court of Appeals, 114 SCRA 478).

In the case at bar, the petitioner maintains that since the respondent judge allowed the reprobate of
Adoracion's will, Hermogenes C. Campos was divested of his legitime which was reserved by the law for him.

This contention is without merit.

Although on its face, the will appeared to have preterited the petitioner and thus, the respondent judge
should have denied its reprobate outright, the private respondents have sufficiently established that Adoracion was,
at the time of her death, an American citizen and a permanent resident of Philadelphia, Pennsylvania, U.S.A.
Therefore, under Article 16 par. (2) and 1039 of the Civil Code which respectively provide:

71
 Art. 16 par. (2).
xxx xxx xxx
However, intestate and testamentary successions, both with respect to the order of succession and
to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall
be regulated by the national law of the person whose succession is under consideration, whatever
may be the nature of the property and regardless of the country wherein said property may be
found.

Art. 1039.
Capacity to succeed is governed by the law of the nation of the decedent.

The law which governs Adoracion Campo's will is the law of Pennsylvania, U.S.A., which is the national
law of the decedent. Although the parties admit that the Pennsylvania law does not provide for legitimes and that all
the estate may be given away by the testatrix to a complete stranger, the petitioner argues that such law should not
apply because it would be contrary to the sound and established public policy and would run counter to the specific
provisions of Philippine Law.

It is a settled rule that as regards the intrinsic validity of the provisions of the will, as provided for by
Article 16(2) and 1039 of the Civil Code, the national law of the decedent must apply. This was squarely applied in
the case of Bellis v. Bellis (20 SCRA 358) wherein we ruled:

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.

In sum, the conflict-of-laws rule that govern the intrinsic validity of wills in the Philippines is the the lex
nationalii of the decedent as provided by the New Civil Code.67 This rule was also followed by the Supreme Court
in deciding landmark cases such as Miciano v. Brimo, 50 Phil. 867; Bellis v. Bellis, 20 SCRA 558; and Cayetano v.
Leonidas, 129 SCRA 522).

We must not forget, however, that in case of conflict between the nationality theory and the domiciliary
theory, we can treat the case as one of renvoi as in the Christensen case, so that we can still apply Philippine law
even if the deceased was a citizen of another country.

MICIANO v. BRIMO

67
CIVIL CODE, Art. 16 (2).

72
G.R. No. L-22595, November 1, 1927
50 Phil. 867

The case concerns the partition of the estate left by the deceased Joseph G. Brimo. The judicial
administrator of the said estate, Juan Miciano, filed a scheme of partition which was opposed by one of the brothers
of the deceased, Andre Brimo. The opposition was based on the ground that the partition in question puts into effect
the provisions of the deceaseds will which are not in accordance with the laws of his Turkish nationality, and hence
they are void for violating the Philippine Civil Code which provides that legal and testamentary successions, in
respect to the order of succession as well as to the amount of the successional rights and the intrinsic validity of their
provisions, shall be regulated by the national law of the person whose succession is in question, whatever may be
the nature of the property or the country in which it may be situated. However, the oppositor failed to prove that the
said testamentary dispositions are not in accordance with the Turkish laws, and failed to present any evidence
showing that the Turkish laws are on the matter.

ROMUALDEZ, J.:

In the absence of evidence on such laws, they are presumed to be the same as those of the Philippines.
(Lim and Lim vs. Collector of Customs, 36 Phil., 472.)

It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it when
he desires to be given an opportunity to present evidence on this point; so much so that he assigns as an error of the
court in not having deferred the approval of the scheme of partition until the receipt of certain testimony requested
regarding the Turkish laws on the matter.

The refusal to give the oppositor another opportunity to prove such laws does not constitute an error. It is
discretionary with the trial court, and, taking into consideration that the oppositor was granted ample opportunity to
introduce competent evidence, we find no abuse of discretion on the part of the court in this particular. There is,
therefore, no evidence in the record that the national law of the testator Joseph G. Brimo was violated in the
testamentary dispositions in question which, not being contrary to our laws in force, must be complied with and
executed.

Therefore, the approval of the scheme of partition in this respect was not erroneous.

BELLIS v. BELLIS
G.R. No. L-23678, June 6, 1967

73
20 SCRA 359

Amos Bellis, born in Texas, was a citizen of the State of Texas, USA. By his first wife, Mary Mallen,
whom he divorced, he had five legitimate children: Edward, George (deceased), Henry, Alexander and Anna. By his
second wife, Violet Kennedy, who survived him, he had three legitimate children: Edwin, Walter and Dorothy. All
seven legitimate children are herein heirs-appellees. Finally, he had three illegitimate children: Amos Jr., Maria
Cristina and Miriam, herein oppositor-appellants.
On August 5, 1952, 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) $40,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children,
Amos Bellis, Jr., Maria Cristina Bellis and 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.

Subsequently, Bellis died a resident of San Antonio, Texas on July 18, 1958. His will was admitted to
probate in the CFI of Manila. In the project of partition, the executor, Peoples Bank and Trust Co., pursuant to the
clause in the will abovementioned, delivered to the illegitimate children their legacies, and divided the residuary
estate into seven equal portions for the benefit of the testators seven legitimate children by his first and second
marriages.

The illegitimate children filed their respective oppositions to the project of partition on the ground that they
were deprived of their legitime as compulsory heirs of the deceased. Relying upon Art. 16 of the Civil Code, the CFI
of Manila applied the national law of the decedent, which in this case is Texas law, which did not provide for
legitimes.

The illegitimate children appealed to the Supreme Court to raise the issue of which law must apply- Texas
law or Philippine law.

BENGZON, J.P., J.:

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

74
absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different from ours.3
Appellants' position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even
mentioned it in their arguments. Rather, they argue that their case falls under the circumstances mentioned in the
third paragraph of Article 17 in relation to Article 16 of the Civil Code.
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 be 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.

75
 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.

IV. Allowance of a Will Proved Outside the Philippines

Probate is a special proceeding that is required by law for the purpose of establishing the validity of a will.
It is an adjudication that the last will and testament of a person was executed with all the formalities required by
law.68

ARTICLE 838 of the New Civil Code provides:

No will shall pass either real or personal property unless it is proved and allowed in accordance with the Rules of
Court.

As it is essentially a procedural matter, the law of the forum shall govern. In other words, the Rules of Court of the
Philippines governs the probate proceeding for the allowance of a will in the Philippines. 69

However, it is still incumbent upon the Court to review the foreign state where the suit was made to ensure that the
extrinsic requirements in the execution of the will have been complied with. This is in view of Articles 17, 816, and
817 of the New Civil Code.

ARTICLE 17:

68
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Comments, 2000, p. 395.
69
Ibid.

76
The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the
country in which they are executed.

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

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

A will that is made in a foreign country may be probated in the Philippines after presenting sufficient proof
that the will was duly executed in accordance with the manner required by law and that the testator has testamentary
capacity at the time the will was executed.

What about a will that has been probated in a foreign country? May it be allowed in the Philippines? The
answer is yes. The Rules of Court provides that a will proved and allowed in a foreign country may be allowed,
filed, and recorded in the proper Regional Trial Court in the Philippines. 70

RULE 77: ALLOWANCE OF WILL PROVED OUTSIDE OF PHILIPPINES AND

ADMINISTRATION OF ESTATE THEREUNDER

Sec. 1. Will proved outside Philippines may be allowed here. - Wills proved and allowed in a foreign
country, according to the laws of such country, may be allowed, filed, and recorded by the proper Court of
First Instance in the Philippines.

Sec. 2. Notice of hearing for allowance. - When a copy of such will and of the order or decree of the
allowance thereof, both duly authenticated, are filed with a petition for allowance in the Philippines, by the
executor or other person interested, in the court having jurisdiction, such court shall fix a time and place for
the hearing, and cause notice thereof to be given as in case of an original will presented for allowance.

Sec. 3. When will allowed, and effect thereof. - If it appears at the hearing that the will should be allowed
in the Philippines, the court shall so allow it, and a certificate of its allowance, signed by the judge, and

70
Rules of Court, Rule 77, Sec. 1.

77
 attested by the seal of the court, to which shall be attached a copy of the will, shall be filed and recorded by
the clerk, and the will shall have the same effect as if originally proved and allowed in such court.

xxx

In this case, the due execution and the testamentary capacity of the testator need not be proved again. Once
the judge sees that the will probated in a foreign country should be allowed in the Philippines, the judge will issue a
certificate of allowance which gives the will the same effect as one originally probated in that court. The same is
address under Article 817 of the NCC.

Where then lies the conflict? Under the common law conflicts rule, a will admitted to probate as valid at
the last domicile of the testator is valid everywhere with respect to movable property. The state where the movable
properties are found is interested only in what the domiciliary state declares things owned by the testator. As such,
once the will is probated at the domicile, there is no longer any problem. Following this rule, the devolution of
movable property is governed by the lex domicili where the deceased left real property, the probate of the will in his
last domicile does not affect the conveyance ofladn which is subject to the lex situs.

SUNTAY v. SUNTAY
95 Phil. 500 (1954)

FACTS: In 1934, Jose B. Suntay, a Filipino citizen and a resident of the Philippines, died in Amoy, China. He left
real and personal properties in the Philippines and a house in Amoy. During his lifetime, he married twice, the first
wife was Manuela Cruz, with whom he had several children. The second marriage was with Maria Natividad Lim
Brillian, with whom he had a son, petitioner Silvino Suntay.

Intestate proceedings were instituted by the heirs from the first marriage. While the second wife, the surviving
widow who remained in Amoy China, filed a petition for the probate of the last will and testament of the deceased
which was claimed to have been executed and signed in the Philippines on November, 1929. The petition was
denied due to the loss of the will before the hearing thereof.

After the pacific war, Silvino, claimed to have found among the records of his father, a last will and testament in
Chinese characters executed and signed by the deceased on January, 1931 and probated in the Amoy District Court.
He filed a petition in the intestate proceedings for the probate of the will executed in the Philippines on November
1929 or the will executed in Amoy China on November, 1931.

78
ISSUE: Whether or not the will executed in Amoy, China can still be validly probated in the Philippines

HELD: No. The fact that the municipal district court of Amoy, China is a probate court must be proved. The law of
China on procedure in the probate or allowance of wills must also be proved. The legal requirements for the
execution of the will in China in 1931 should also be established by competent evidence. There is no proof on these
points.

Moreover, it appears that all the proceedings had in the municipal district court of Amoy were for the purpose of
taking the testimony of two attesting witnesses to the will and that the order of the municipal district court of Amoy
does not purport to probate the will.

The order of the municipal district court of Amoy, China does not purport to probate or allow the will which was the
subject of the proceedings. In view thereof, the will and the alleged probate thereof cannot be said to have been done
in accordance with the accepted basic and fundamental concepts and principles followed in the probate and
allowance of wills. Consequently, the authenticated transcript of proceedings held in the municipal district court of
Amoy, China, cannot be deemed and accepted as proceedings leading to the probate of allowance of a will and
therefore, the will referred to therein cannot be allowed, filed and recorded by a competent court of this country.

VDA. DE PEREZ v. TOLETE

232 SCRA 722 (1994)

FACTS: Dr. Jose Cunanan and his wife, Dr. Evelyn Perez-Cunanan, who became American citizens and residents of
New York, each executed a will also in New York, containing provisions on presumption of survivorship (in the
event that it is not known which one of the spouses died first, the husband shall be presumed to have predeceased his
wife). Later, the entire family perished in a fire that gutted their home. Thus, Rafael, who was named trustee in
Joses will, filed for separate probate proceedings of the wills.

Later, Evelyns mother, Salud Perez, filed a petition for reprobate in Bulacan. Rafael opposed, arguing that Salud
was not an heir according to New York law. He contended that since the wills were executed in New York, New
York law should govern. He further argued that, by New York law, he and his brothers and sisters were Joses heirs
and as such entitled to notice of the reprobate proceedings, which Salud failed to give.

For her part, Salud said she was the sole heir of her daughter, Evelyn, and that the two wills were in accordance with
New York law. But before she could present evidence to prove the law of New York, the reprobate court already
issued an order, disallowing the wills.

79
ISSUE: Whether or not the reprobate of the wills should be allowed

HELD: The evidence necessary for the reprobate or allowance of wills which have been probated outside of the
Philippines are as follows: (1) the due execution of the will in accordance with the foreign laws; (2) the testator
has his domicile in the foreign country and not in the Philippines; (3) the will has been admitted to probate in
such country; (4) the fact that the foreign tribunal is a probate court, and (5) the laws of a foreign country on
procedure and allowance of wills (III Moran Commentaries on the Rules of Court, 1970 ed., pp. 419-429; Suntay
v. Suntay, 95 Phil. 500 [1954]; Fluemer v. Hix, 54 Phil. 610 [1930]). Except for the first and last requirements, the
petitioner submitted all the needed evidence.

The necessity of presenting evidence on the foreign laws upon which the probate in the foreign country is based is
impelled by the fact that our courts cannot take judicial notice of them.

Xxx

This petition cannot be completely resolved without touching on a very glaring fact - petitioner has always
considered herself the sole heir of Dr. Evelyn Perez Cunanan and because she does not consider herself an heir of
Dr. Jose F. Cunanan, she noticeably failed to notify his heirs of the filing of the proceedings. Thus, even in the
instant petition, she only impleaded respondent Judge, forgetting that a judge whose order is being assailed is merely
a nominal or formal party (Calderon v. Solicitor General, 215 SCRA 876 [1992]).

The rule that the court having jurisdiction over the reprobate of a will shall "cause notice thereof to be given as in
case of an original will presented for allowance" (Revised Rules of Court, Rule 27, Section 2) means that with
regard to notices, the will probated abroad should be treated as if it were an "original will" or a will that is presented
for probate for the first time. Accordingly, compliance with Sections 3 and 4 of Rule 76, which require publication
and notice by mail or personally to the "known heirs, legatees, and devisees of the testator resident in the
Philippines" and to the executor, if he is not the petitioner, are required.

The brothers and sisters of Dr. Jose F. Cunanan, contrary to petitioner's claim, are entitled to notices of the time and
place for proving the wills. Under Section 4 of Rule 76 of the Revised Rules of Court, the "court shall also cause
copies of the notice of the time and place fixed for proving the will to be addressed to the designated or other known
heirs, legatees, and devisees of the testator, . . . "

WHEREFORE, the questioned Order is SET ASIDE. Respondent Judge shall allow petitioner reasonable time
within which to submit evidence needed for the joint probate of the wills of the Cunanan spouses and see to it that
the brothers and sisters of Dr. Jose F. Cunanan are given all notices and copies of all pleadings pertinent to the
probate proceedings.SO ORDERED.

80
DALTON v. GIBERSON
91 Phil. 524 (1952)

FACTS: Lela Dalton filed for the probate of the holographic will of William Giberson which was executed in San
Francisco, CA. Williams son, Spring Giberson, opposed on the ground that it was not executed according to
Philippine laws. The lower court ruled in favor of Spring.

ISSUE: Whether a probated foreign will may be reprobated in the Philippines.

HELD: Yes, the foreign will may be reprobated in the Philippines. Wills proved and allowed in a foreign country,
according to the laws of such country, may be allowed, filed, and recorded by the proper Court of First Instance in
the Philippines.

V. Administration of Estate (Report by Maria Rodielita Dublin)

Once the will has been proved or allowed in our courts, the Court is of the duty to issues letters
testamentary to the person named in the will upon the latters application. 71
Should there be no will, the Court will
appoint an administrator.

The title vested on the administrator is given by the court not by the testator himself. The rationale for
this is for the law to protect creditors and, only incidentally, for the distribution of the estate amount to the next
kin.72

The title of the domiciliary administrator extends only to country or state of the Court that vested it and
therefore only to property within the same state or country. He has no extraterritorial powers. If there are properties
in a foreign state, an ancillary administrator is appointed by the court of the foreign state or country where such
assets are located.

TAYAG v. BENGUET CONSOLIDATION INC.

26 SCRA 242 (1968)

FACTS: Idonah Slade Perkins, who died on March 27, 1960 left two stock certificates owned by her in a Philippine
Corporation, Benguet Consolidated, Inc., to satisfy the legitimate claims of local creditors. The certificates are in the

71
RULES OF COURT, Rule 78, Sec 4.
72
RULES OF COURT, Rule 79, Sec. 5.

81
possession of the County Trust Company of New York, which as noted, is the domiciliary administrator of the estate
of the deceased.

Lazaro A. Marquez was appointed ancillary administrator, and was later substituted by the appellee Renato D.
Tayag. A dispute arose between the domiciliary administrator County Trust Company of New York and the
ancillary administrator in the Philippines as to which of them was entitled to the possession of the stock certificates
in question. In January 1964, the Court of First Instance of Manila ordered the domiciliary administrator, to
`produce and deposit them with the ancillary administrator or with the Clerk of Court. The domiciliary
administrator did not comply with the order, and on February 11, 1964, the ancillary administrator petitioned the
court to "issue an order declaring the certificate or certificates of stocks covering the 33,002 shares issued in the
name of Idonah Slade Perkins by Benguet Consolidated, Inc. be declared or considered as lost.

After considering the motion of the ancillary administrator, the Court hereby (1) considers as lost for all purposes in
connection with the administration and liquidation of the Philippine estate of Idonah Slade Perkins the stock
certificates covering the 33,002 shares of stock standing in her name in the books of the Benguet Consolidated, Inc.,
(2) orders said certificates cancelled, and (3) directs said corporation to issue new certificates in lieu thereof, the
same to be delivered by said corporation to either the incumbent ancillary administrator or to the Probate Division of
this Court."

From such an order, an appeal was taken to this Court not by the domiciliary administrator, the County Trust
Company of New York, but by the Philippine corporation, the Benguet Consolidated, Inc.

ISSUE: Whether the ancillary administrator is entitled to the certificates of stocks.

HELD: Yes. It is often necessary to have more than one administration of an estate. When a person dies intestate
owning property in the country of his domicile as well as in a foreign country, administration is had in both
countries. That which is granted in the jurisdiction of decedents last domicile is termed the principal administration,
while any other administration is termed the ancillary administration. The reason for the latter is because a grant of
administration does not ex proprio vigore have any effect beyond the limits of the country in which it is granted.
Hence, the administrator appointed in a foreign state has no authority in the Philippines. The ancillary administration
is proper, whenever a person dies, leaving in a country other than that of his last domicile, properly to be
administered in the nature of assets of the deceased liable for his individual debts or to be distributed among his
heirs.

LEON AND GHEZZI vs. MANUFACTURERS LIFE INSURANCE CO

G.R. No. L-3677, 90 Phil. 459 (November 29, 1951)

82
FACTS: The case involves the estate of Basil Gordon Butler, formerly a resident of the Philippines, died in
Brooklyn, New York City, in 1945, leaving a will which was duly probated in New York County and of which
James Ross, Sr., James Madison Ross, Jr. and Ewald E. Selph were named executors.

The estate having been settled, the proceedings were closed on July 17, 1947. The will contained this residuary
clause bequeathing the remaining estate to Mercedes de Leon who is to receive an amount sufficient for her current
needs. James Madison Ross was appointed as trustee. Ross bought an annuity from the Manufacturer's life Insurance
Co. at its head office in Toronto, Canada, paying in advance $17,091.03 as the combined premiums. The contract
stipulates for a monthly payment of $57.60 to Mercedes Benz during her lifetime.

De Leon has been receiving the stipulated monthly allowance through the Insurance Company's Manila Office. To
get hold of the entire amount, de Leon presented the will for probate in CFI, Manila with Ghezzi as administrator.
After having qualified, the administratrix filed the motion to demand accounting from Manulife which Judge
Amparo has denied.

ISSUE: Whether or not De Leon can demand accounting from Manulife.

HELD: No. Section 4 of Rule 78 of the Rules of Court provides: Estate, how administered.-When a will is thus
allowed, the court shall grant letters testamentary, or letters of administration with the will annexed, and such letters
testamentary or of administration, shall extend to all the estate of the testator in the Philippines. Such estate, after the
payment of just debts and expenses of administration, shall be disposed of according to such will, so far as such will
may operate upon it; and the residue, if any, shall be disposed of as is provided by law in cases of estates in the
Philippines belonging to persons who are inhabitants of another state or country.

It is manifest from the facts before set out that the funds in question are outside the jurisdiction of the probate court
of Manila. Having been invested in an annuity in Canada under a contract executed in the country, Canada is the
suits of the money. The party whose appearance the appellant seeks is only a branch or agency of the company
which holds the funds in its possession, the agency's intervention being limited to delivering to the annuitant the
checks made out and issued from the home office. There is no showing or allegation that the funds have been
transferred or removed to the Manila Branch.

VI. Interpretation of Wills

Pursuant to the nationality principle in our Civil Code, the interpretation of a will or testament must be
governed by the rules of interpretation of the decedents national law. As in contracts, the principal rule in wills is
73
that where the terms are clear and unambiguous, the lex intentionis of the party should be followed.

73
CIVIL CODE, ART. 1370

83
 When there are ambiguous provisions, the intention of the party or the exact meaning he may have ascribed
to them can be inferred by referring to the context of the instrument itself or the testators contemporaneous and
subsequent acts in keeping with the nature and object of the document. 74

If none of these can give the absolute assurance that indeed the intention of the testator has been
ascertained, settled presumptions of law may be resorted to. It is presumed that the interpretation of the ambiguous
phrase should be determined in accordance with the laws and customs of that state most probably in the mind of the
grantor or testator when he used the words, and which he is to be presumed to be the most familiar.

The second presumption of law is that in case a will admits a different disposition, the interpretation by
which the disposition is to be operative shall be preferred. 75 The will should receive the most favorable construction
to accomplish the purpose intended by the testator. It is necessary to interpret that intention rationally and in a
manner that will not render the will ineffective. It is presumed that the testator intended a lawful, rather than an
76
unlawful thing, and courts will not seek an interpretation that will nullify his will or any parts thereof.

Yambao vs Gonzales

G.R. No. L-10763. April 29, 1961

Facts: Delfin Yambao filed a case against Angelina Gonzales and Maria Pablo. It appears that on August 10, 1942,
Maria Gonzales executed a will bequeathing to appellees all her properties situated in Sta Rosa, Laguna. The will
was probated in 1948. Immediately, thereafter, appellant went to appellees to request that he be placed as tenant of
the rice land which, by an express provision of said will, they were directed to give to him for cultivation as tenant,
and when they refused alleging that they had already given it to another tenant he filed the present action. In their
answer, defendants averred that the provisions of the will relied upon by plaintiff are not mandatory; that the
determination of who should be the tenant of the land is vested in a special court; and that the present action is not
the proper remedy.

The pertinent provisions of the will relied upon by appellant read as follows:

"Dapat din naman malaman, ng dalawa kong taga-pagmana na sila MARIA PABLO at
ANGELINA GONZALES na sila ay may dapat TUNGKULIN O GAMPANAN GAYA ng mga
sumusunod:

xxx xxx xxx

74
CIVIL CODE, ART. 1375
75
CIVIL CODE, ART. 788
76
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Comments, 2000, p. 394.

84
 "(2) Pahihintulutan nila na si Delfin Yambao ang makapagtrabaho ng bukid habang
panahon, at ang nasabing bukid ay isasailalim ng pamamahala ng Albasea samantalang ang
bukid ay nasa usapin at may utang pa."

Issue: Whether or not the will was correctly interpreted?

Ruling: No. Analyzing it carefully we will find that the same contains a clear directive to employ appellant
as may be seen from the words preceding the word "pahihintulutan" which say: "Dapat din naman
malaman, ng dalawa kong taga-pagmana na sila MARIA PABLO at ANGELINA GONZALES na sila ay
may dapat TUNGKULIN O GAMPANAN GAYA ng mga sumusunod." The words "dapat TUNGKULIN
O GAMPANAN" means to do or to carry out as a mandate or directive, and having reference to the word
"pahihintulutan", can convey no other meaning than to impose a duty upon appellees. To follow the
interpretations given by the trial court would be to devoid the wish of the testatrix of its real and true
meaning.

VII. Revocation of a will

Revocation is an act of the mind, terminating the potential capacity of the will to operate at the
death of the testator, manifested by some outward or visible act or sign, symbolic thereof. Such right to
revoke a will cannot be waived or restricted.

Being a unilateral and purely personal act, a will is revocable at any time before the death of the
testator. Any waiver or restriction of this right is void. 77

Under Art. 829 of the Civil Code of the Philippines, a revocation done outside the Philippines, by
a person who does not have a domicile in this country is valid when it is done according to 1) the law of the
place where the will was mad (lex loci celebrationis) or 2) the law of the place where the testator had his
domicile at that time (lex domicilii). If the revocation is done outside the Philippines by one domiciled in
the Philippines, the law of the domicile, which is the Philippine law or the law of the place of the
revocation (lex loci actus) controls. If the revocation takes place in this country it is valid when it is in
accordance with the provisions of our Civil Code.

Under the Philippine law, wills are not deemed revoked except in the following cases: 1) By
implication of law; or 2) By some will, codicil, or other writing, executed as provided in the case of wills;
or 3) By burning, tearing, cancelling, or obliterating the will with the intention of revoking it, by the
testator himself, or by some other persons in his presence, and by his express direction.

A problem may arise when a testator revokes his will in the state where he is domiciled and then
changes his domicile to another state where he dies. If the revocation of his will was valid by the laws of

77
CIVIL CODE, ART. 828

85
the state where he revoked it but invalid by the law of the domicile at the time of his death, which law will
control the situation? Common law countries apply the law of the domicile at the time of the testators
death not the law of the place of revocation, However, Philippines law clearly provides the contrary and
applies the law of the place of revocation. 78

VIII. Trusts

Trust is a legal relationship between one person having an equitable ownership in property and
another person owing the legal title to such property, the equitable ownership of the former entitling him to
the performance of certain duties and the exercise of certain powers by the latter.

A trust is a right of property, real or personal, held by one party for the benefit of another.79

It may be created by deed during the lifetime of the settler or by will. Conflict-of-law issues in
trust arise when they involve interests or properties in a place other than the decedents domicile and
specific questions on the validity and essential propriety of the trust as well as compliance with formalities.

When the trust contains an express choice-of-law provision, the courts of the place where the trust
is being administered will normally apply that law in keeping with the policy to carry out the intent of the
creator of the trust, In the absence of an express choice of law, the courts will deem controlling the law that
will sustain the validity of the trust, whether that be the state where the trust is being administered or the
state where the decedent was domiciled.80

Testamentary trust depend for their extrinsic validity on the will which created them. The rules
governing wills as to capacity and extrinsic requirements apply. Since a trust involves property, the rule of
lex situs determined the validity of a trust created by a last will and testament. 81

Gayondato vs The Treasurer of the Philippine Islands

(G.R. no. L-24597; August 25, 1926)

Facts: Domingo Gayondato owned three parcels of land, which he inherited from his mother, Ramona. Domingo
married Adela Gasataya and had a child, herein petitioner Rosario Gayondato. Upon Domingo's death, Gabino
Gasataya (Adela's father) took charge of the lands in question, and eventuallt turned them over in when Adela

78
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Comments, 2000, p. 395.
79
Gayondato vs Treasurer of the Philippines, 49 Phil. 244
80
Coquia, J.R. and Aquiling-Pangalangan, E. Conflict of Laws: Cases, Materials and Comments, 2000, p. 406.

81
Goodrich, Chap. VIII, note 2 at P. 508

86
married Domingo Cuachon. The said lands where included in a cadastral case. In a hearing, Cuachon appeared on
behalf of his wife and stepdaughter and filed claims for the lots by way of answer in which he stated that the lots
were the property of "his wife Adela Gasataya and her daughter, 15 yrs of age" Notwithstanding the statement, the
CFI decreed the registration of the lots in the name of Adela alone. Subsequently, with the consent of her husband,
mortgaged the property to National Bank, which Francisco Rodgriguez eventually purchased.
Rosario brought an action to recover damages for the erroneous registration against Adela Gasataya, Domingo
Cuachon, Francisco Rodriguez and the Insular Treasurer as defendants.

Issue: Whether or not there was trust relationship between Rosario and Adela?

Ruling: None. Bouvier defines a trust in its technical sense as "a right of property, real or personal, held by one
party for the benefit of another." In the present case we have this situation: The plaintiff was a minor at the time of
the registration of the land and had no legal guardian. It is true that her mother in whose name the land was
registered was the natural guardian of her person, but that guardianship did not extend to the property of the minor
and conferred no right to the administration of the same. the plaintiff, being a minor and under disability, could not
create a technical trust of any kind. Applying Bouvier's definition to this state of facts, it is clear that there was no
trust in its technical signification. The mother had no right of property or administration in her daughter's estate and
was nothing but a mere trespasser.

87
 CORPORATIONS
BRIEF SUMMARY OF CONFLICT RULES ON CORPORATIONS

1.) FACTUAL SITUTATION: EXISTENCE, LEGAL CHARACTER, CAPACITY, POWERS and LIABILITIES

POINT OF CONTACT: General Rule: the law of the place of incorporation.

Exceptions:

1. Constitutional and Statutory Restrictions. (Constitution, Art. XI)

For constitutional purposes even if it is incorporated in the Philippines, it is not deemed a Filipino corporation
and cannot acquire land, exploit our natural resources and operate public utilities unless 60% of the capital is
Filipino owned (Constitution, Art. XII, Sec. 2, 10, and 11)

2. Control Test During Wartime the veil of corporate identity is pierced and the nationality of the controlling
stockholders is used to determine of a corporation is an enemy corporation or not (the Control Test) (Dorkis
Winskip vs. Phil. Trust Co., L-3829, January 31, 1952)

2.) FACTUAL SITUTATION: Formation of the corporation (requisites, Kinds of stocks, Transfer of stocks to
bind the corporation, Issuance, amount and legality of dividends, Powers and duties of members, stockholder and
officers.

POINT OF CONTACT: Law of the place of incorporation

3.) FACTUAL SITUTATION: Alteration of Charter, Internal Organization, Merger and Consolidation

POINT OF CONTACT: Law of the place of incorporation

4.) FACTUAL SITUTATION: Validity of corporate acts and contracts (including ultra-vires acts)

POINT OF CONTACT: Law of place of incorporation and law of the place of performance (the act or contract
must be authorized by BOTH LAWS)

5.) FACTUAL SITUTATION: Right to sue and amenability to court processes and suits against it.

POINT OF CONTACT: Lex fori - The positive law of the state, nation, or jurisdiction within which a lawsuit is
instituted or remedy sought.

6.) FACTUAL SITUTATION: Manner and effect of dissolution.

POINT OF CONTACT: Law of the place of incorporation provided that the public policy of the forum is not
mitigated against.

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7.) FACTUAL SITUTATION: Domicile

POINT OF CONTACT: If not fixed by the law creating or recognizing the corporation or by any other provision
the domicile is where its legal representation is established or where it exercises its principal functions (Civil Code
Art. 51)

8.) FACTUAL SITUTATION: Receivers (appointment and powers)

POINT OF CONTACT: Principal receiver is appointed by the courts of the state of incorporation; ancillary
receivers, by the courts of any state where the corporation has assets.

EFFECT OF RECOGNITION OF FOREIGN BUSINESS ASSOCIATION

Merely admits or affirms its legal existence created under the law of one State but does not involve the rights of the
corporation to do or transact business

THEORIES OF RECOGNITION

TERRITORIAL THEORY: A company has no legal existence beyond its sovereignty by which it was created.

INTERNATIONAL THEORY: A foreign corporation is immediately recognized without further formality.

RESTRICTED ADMISSION THEORY: A state imposes comprehensive examination, supervision and control of
foreign corporations.

The principle recognized in the Philippines is that every state may impose conditions on the exercise by
foreign corporations of activities within its territory.

The minimum contract required for the power of restriction and supervision, is the fact of transacting or
doing business in the Philippines.

CORPORATION THEORIES ON THE PERSONAL OR GOVERNING LAW OF A CORPORATION.

Law of the place of incorporation: Law adopted by the Philippines.

Law of the place or center of management or Central Office Principle/Centre of administration or siege
social.
Place of Exploitation/ exploitation centre or siege dexploitation.

DOMICILE OR RESIDENCE OF FOREIGN CORPORATIONS.

When not fixed by the law creating them it shall be understood to be the place where their legal
representation is or where they exercise their principal functions.

Note: A foreign corporation granted license to operate in the Philippines acquires domicile therein.

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VALIDITY OF CORPORATE ACTS AND CONTRACTS:

To be valid and binding, corporate acts or contracts must be authorized both by:

The law of the place of incorporation

The law of then place of performance

Otherwise, their validity is doubtful and they may not be given effect, without prejudice to the principle of estoppel.

MULTINATIONAL or TRANSNATIONAL CORPORATIONS.

Branches of a big mother corporation that have been incorporated under the local law of each country or state where
it has been extended its business are separate entities governed by the said local laws.

JURISDICTION OVER FOREIGN CORPORATIONS

CONSENT DOCTRINE

A foreign corporation will be recognized and will be allowed to transact business in any state which gives it
consent.

This doctrine is established in Secs. 125, 126, 127 and 128 of the Corporation Code of the Philippines.

Note: All foreign corporations lawfully doing business in the Philippines shall be bound by all laws, rules, and
regulations applicable to domestic corporations except provisions on the creations, formation, organization, or
dissolution of corporations or those which fix the relations, liabilities, responsibilities, or duties of stockholders,
members, or officers of the corporation to each other.

A foreign corporation may sue and be sued in the Philippines if it has the necessary license to do business
here.

A foreign corporation may be sued after it withdrew from business in the Philippines on contracts previously entered
into by it. The same rules applied to contracts entered into prior the revocation of a foreign corporations license.

PARENT AND SUBSIDIARY CORPORATIONS

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Jurisdiction over the parent corporation can be acquired when the separate existence of the subsidiary has not been
fully maintained or if the parent has acted within the state as the subsidiarys agent.

However, if the local counterpart is a subsidiary with an entire distinct personality, jurisdiction over the local
counter-part is not jurisdiction over the parent company.

RIGHT OF A FOREIGN CORPORATION TO BRING SUIT

General Rule: No foreign corporation transacting business in the Philippines without a license, or its successors or
assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative
agency of the Philippines; but such corporation may be sued or be proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under the Philippines laws. (Corporation Code, Sec.
133)

EXCEPTIONS:

1. Isolated transactions

2. Action to protect trademark, trade name, goodwill, patent or for unfair competition;

3. Agreement fully transacted outside the Philippines;

4. Petition filed is merely a corollary defense in a suit against it;

5. To enforce a right not arising out of a business transaction; e.g. tort that occurred in the Philippines.

6. When the parties have contractually stipulated that the Philippines is the venue of actions;

7. When the party sued is barred by the principle of estoppel and/or principle of unjust enrichment from
questioning the capacity of the foreign corporation; and

8. Recovery of misdelivered property.

EFFECT OR FAILURE TO SECURE A LICENSE TO TRANSACT BUSINESS.

1. The foreign corporation which does business in the Philippines without a license has no right to sue in the
Philippines, but it can still be sued; and

2. The contracts entered into are valid as between the parties, but they may not be enforced in the Philippine
courts.

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 FOREIGN CORPORATIONS AND COMPULSORY COUNTERCLAIMS

EXCEPTIONS:

1. When a foreign corporation is sued, it may interpose a counterclaim which would defeat the complaint.

2. If the foreign corporation is suing on an isolated contract or is exempt from the license requirement, a local
defendant can file a counterclaim.

NOTE:

In either case, the foreign corporation is not maintaining a suit. Further, such counterclaim may embrace only
compulsory counterclaim, not a permissive one, for the former is deemed waived if not raised.

TRUSTS

When the trust contains an express choice-of-law provision, that law shall apply.

In the absence of an express provision, the courts will deem as controlling the law that will sustain the validity of the
trust.

RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

EXAMPLES OF FOREIGN JUDGMENT WHICH CAN BE RECOGNIZED

1.) Declaratory judgments;

2.) Judgments which give no affirmative relief and

3.) Judgements which determine the parties interests in a thing or status

REQUISITES FOR RECOGNITION OR ENFORCEMENT:

1.) The defendant has been given reasonable notice and opportunity to be heard;

2.) There is adequate proof of foreign judgment;

3.) The foreign judgment must have disposed of the controversy on the merits and must be res judicata, i.e.,
judgment on the merits is final, issued by a foreign court having jurisdiction over the subject matter and parties,
and there was identity of parties, subject matter, and cause of action.

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4.) It must not be barred by prescription both in the State where it was promulgated and where it is sought to be
enforced.

5.) State where the foreign judgment was obtained allows recognition or enforcement of Philippine judgments;

6.) If judgment is for sum of money, it must be fixed;

7.) Foreign judgment must not be contrary to the public policy or good morals of the country where it is to be
enforced.

8.) Judgment must not have been obtained by fraud, collusion, mistake of fact or law; and

9.) It must be a judgment on civil or commercial matters, including questions of status, not on a criminal, revenue, or
administrative matter.

PHILIPPINE RULE ON THE EFFECT OF FOREIGN JUDGMENT

The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the
judgment or final order is as follows:

1.) In a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title to the
thing; and

2.) In a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as
between the parties and their successors in interest by a subsequent title.

In either case, the judgment of final order may be repelled by evidence of a want of jurisdiction, want of
notice the party, collusion, fraud, or clear mistake of law or fact.

Note: The judgment in the foreign court does not constitute res judicata as basis for its enforcement
without giving the losing party the opportunity to dispute.

THREE MODES OF ENFORCEMENT OF JUDGMENT

1.) By filing a petition in the court where the judgment is sought to be recognized for the recognition of the
judgment;

2.) By a summary procedure known as exequatur proceedings; and

Exequatur Procedure

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A summary procedure outline in the statues of some civil law countries such as France, Italy, Switzerland, and
Austria for the enforcement of foreign judgments that have no automatic effect or authority in themselves.

3.) By registration of the foreign judgment in a registry of judgments in the forum where it is with or without
judicial supervision.

REASONS FOR REFUSAL BY A LOCAL COURT TO RECOGNIZE OR ENFORCE A FOREIGN

JUDGMENT

1.) The requisite proof of the foreign judgment may not have been presented;

The manner of proving a foreign judgment is the same as proving a foreign law.

2.) The foreign judgment may contravene a recognized and established policy in our country, e.g., foreign decree of
divorce obtained by a Filipino from his Filipino wife abroad; or

3.) The administration of justice in the country where the foreign judgment came from may be shockingly corrupt or
not beyond reproach.

PROCEDURE OF ENFORCEMENT OF JUDGMENT IN THE PHILIPPINES

1.) Filing of petition in the proper court attaching an authenticated copy of the foreign judgment; and

2.) Authentication calls for the Philippine consul assigned to the country where the foreign judgment was decreed to
certify that such judgment was rendered by a court of competent jurisdiction.

FOREIGN JUDGMENT MUST CONFORM WITH THE CONSTITUTIONAL REQUIREMENTS

The requirement that a judgment must state the facts and the law upon which it is based is embodied in Section 14 of
Article VIII of the Constitution.

Any foreign law, whether substantive or procedural, cannot overrule or prevail over this constitutional provision.

JURISPRUDENCE

RIGHT OF FOREIGN CORPORATION TO BRING SUIT

CARGILL v. INTRA STRATA ASSURANCE CORPORATION

G.R. 168266, March 15, 2010

Cargill (foreign) is a corporation organized and existing under the laws of the State of Delaware.

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 Cargill executed a contract with Northern Mindanao Corporation (NMC) a domestic corporation for the
sale of molasses.

In compliance, Intra Strata Assurance Corporation issued a performance bond to guarantee NMCs
performance.

NMC failed to deliver the molasses

Cargill sued NMC and Intra Strata

ISSUE: WON Cargill has capacity to sue in the Philippines

YES, Cargill has capacity to sue in the Philippines.

The threshold question in this case is whether petitioner was doing business in the Philippines. In
evaluating whether a foreign entity is doing business, the courts consider whether the activity undertaken
by such entity in the Philippines involves profit-making. If so, it is likely that the foreign entity will be
deemed doing business in the Philippines

In this case, it was NMC the domestic corporation, which derived income from the transaction and not the
petitioner. There is also no showing that the transactions between the parties signify intent of petitioner to
establish a continuous business or extends its operations in the Philippines.

In the case, petitioner is a foreign company merely importing molasses from a Philippine exporter. A
foreign company that merely imports goods from a Philippine exporter, without opening an office or
appointing an agent in the Philippines, is not doing business in the Philippines.

RESIDENCE OF CORPORATION

STATE INVESTMENT HOUSE, INC. v. CITIBANK

G.R. 79926-27, October 17, 1991

Consolidated Mines, Inc. (CMI) obtained loans from Citibank, Bank of America and HSBC, all foreign
corporations but with branches in the Philippines.

Meanwhile, State Investment House, Inc. (SIHI) and State Financing Center, Inc. (SFCI), also creditors of
CMI, filed collection suits against the CMI with writs of preliminary attachment.

Subsequently, the three foreign banks jointly filed with the court a petition for involuntary insolvency of
CMI.

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 SIHI and SFCI opposed the petition on the ground that the petitioners are not resident creditors in
contemplation of the Insolvency Law.

ISSUE: WON a foreign corporation with a branch in the Philippines and doing business therein can be
considered a resident.

Yes, they are residents of the Philippines.

Several domestic laws provide that Foreign corporations duly licensed to do business in the Philippines and
are operating therewith are considered residents of the Philippines, including the Insolvency Law, the
Tax Code, and the Offshore Banking Law.

The Courts cannot thus accept the petitioners theory that the corporation may not have a residence separate
from their domicile, and that they may be considered by other states as residents only for a limited and
exclusive purpose.

Of course, as petitioner correctly avers, it is not really the grant of the license to do business that makes it a
resident, the license merely gives legitimacy to its doing business here. What effectively makes such a
foreign corporation a resident corporation in the Philippines is its actually being in the Philippines and
licitly doing business here.

INTERNAL AFFAIRS RULE

ROGERS v. GUARANTY TRUST CO. 288 US 123 (1932)

Rogers owns 200 shares of common stock of American Tobacco Company (ATC). He also owns 400
shares of common stock B.
ATC was organized under the law of New Jersey, and in that state maintains its principal and
registered address, holds stockholders meetings and does substantial amount of business
ATC is also authorized by the laws of New York, many other states and a number of foreign countries
to do and carry on business.
The BOD of ATC adopted resolutions approving the reduction by one half of par value and doubling
of number of shares of both stocks and issue and sale of common stock B to employees.
Rogers filed suit before the NY district court questioning a certain resolution by ATC.
ATC moved to dismiss the suit because it is an attempt to regulate the internal affairs of a corporation
foreign to New York, and that the court should decline to take jurisdiction.
ISSUE: WON New Jersey or New York Law should apply.
New Jersey Law will apply,

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 It has long been settled doctrine that a court sitting in one state will as a general rule decline to
interfere with the management of a corporation organized under the laws of another state but will leave
the controversies as to such matters to courts of the state of domicile.
The reliefs sought by plaintiff, the situs of the stock is in New Jersey and all questions relating to the
validity of the plan, authorization, issue, allotment and sale of the same may be conveniently and
effectively determined in New Jersey courts, the authoritative and final interpreters of the statues of
that state.

DOMICILE OF CORPORATIONS

HYATT ELEVATORS v. GOLDSTAR ELEVATORS

GR. 161026, October 24, 2005

Hyatt Elevators and Goldstar Elevator are both engaged in the business of importing, installing and
maintaining elevators and escalators. Hyatt filed an unfair competition case against LG and Goldstar
before the RTC of Mandaluyong City, alleging that it was appointed as the sole distributor of LG
elevators and escalators.
Goldstar moved to dismiss the case alleging that venue was improperly laid as neither the Hyatt, LG or
Goldstar itself resided in Mandaluyong city where the case was originally filed.
ISSUE: WON the venue was properly laid in Mandaluyong City
NO, Venue is improper in Mandaluyong City. Although the Rules of Court do not provide that when
the plaintiff is a corporation, the complaint should be filed in the location of its principal office as
indicated in its articles of incorporation.
Jurisprudence has, however, settled that the place where the principal office of a corporation is located,
as stated in the articles, indeed establishes its residence.

GRANDFATHER RULE

NARRA NICKEL MINING AND DEVELOPMENT CORPORATION v.

REDMONT CONSOLIDATED MINES CORPORATION

GR. 185590, April 21, 2014

Redmont is a domestic corporation interested in the mining and exploration of some areas in Palawan.
Upon learning that those areas were covered by Mineral Production Sharing Agreements (MPSA)
applications of three other corporations (allegedly Filipino) namely Narra, Tesoro, and MacArthur.

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 Redmont filed a petition before the Panel of Arbitrators of DENR seeking to deny their permits on the
ground that these corporations are in reality foreign-owned by MBMI, a 100% Canadian corporation
o ISSUE: WON the grandfather rule must be applied in this case
Yes, It is the intention of the framers of the Constitution to apply the Grandfather Rule in cases where
corporate layering is present.
First, as a rule in statutory construction, when there is conflict between the Constitution and a statute,
the Constitution will prevail. In this instance, specifically pertaining to the provisions under Art. XII
of the Constitution on National Economy and Patrimony, Sec. 3 of the FIA will have no place of
application.
Corporate layering is admittedly allowed by the FIA, but if it is used to circumvent the Constitution
and other pertinent laws, then it becomes illegal.
Second, under the SEC Rule 1 and DOJ Opinion 2 , the Grandfather Rule must be applied when the
60-40 Filipino-foreign equity ownership is in doubt. Doubt is present in the Filipino equity ownership
of Narra, Tesoro, and MacArthur since their common investor, the 100% Canadian-owned corporation
MBMI, funded them.
Under the Grandfather Rule, it is not enough that the corporation does have the required 60% Filipino
stockholdings at face value.
To determine the percentage of the ultimate Filipino ownership, it must first be traced to the level of
the investing corporation and added to the shares directly owned in the investee corporation. Applying
this rule, it turns out that the Canadian corporation owns more than 60% of the equity interests of
Narra, Tesoro and MacArthur.
Hence, the latter are disqualified to participate in the exploration, development and utilization of the
Philippines natural resources.
o ISSUE: WON the application by the SC of the grandfather resulted to the abandonment of the
control test
No, The control test can be applied jointly with the Grandfather Rule to determine the observance of
foreign ownership restriction in nationalized economic activities. These methods can, if appropriate, be
used cumulatively in the determination of the ownership and control of corporations engaged in fully
or partly nationalized activities, as the mining operation involved in this case or the operation of public
utilities.
When in the mind of the court there is doubt, based on the attendant facts in the 60-40 Filipino equity
ownership in the corporation, then it may apply the grandfather rule.
In this case, using the control test, Narra, Tesoro and MacArthur appear to have satisfied the 60-40
equity requirement. But the nationality of these corporations and the foreign-owned common investor
that funds them was in doubt, hence, the need to apply the Grandfather Rule.

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CAPITAL REFERS TO COMMON SHARES

GAMBOA v. TEVES

GR. 176579, June 28, 2011

This case pertains to the petition to nullify the sale of shares of stock of Philippine
Telecommunications Investment Corporation (PTIC) by the government of the Republic of the
Philippines, acting through the Inter-Agency Privatization Council (IPC), to Metro Pacific Assets
Holdings, Inc. (MPAH), an affiliate of First Pacific Company Limited (First Pacific), a Hong Kong-
based investment management and holding company and a shareholder of the Philippine Long
Distance Telephone Company (PLDT).
The petitioner Wilson Gamboa, questioned the sale on the ground that the sale also involved an
indirect sale of 12 million shares (or about 6.3 percent of the outstanding common shares) of PLDT
owned by PTIC to First Pacific. With this sale, First Pacifics common shareholdings in PLDT
increased from 30.7 percent to 37 percent, thereby increasing the total common shareholdings of
foreigners in PLDT to about 81.47%.
This, according to the petitioner, violates Section 11, Article XII of the 1987 Philippine Constitution
which limits foreign ownership of the capital of a public utility to not more than 40%.
ISSUE: WON the term capital in Sec. 11, Article XII of the Constitution refers to the common shares
only or to the total outstanding capital stock
Yes, the term capital refers only to common shares entitled to vote.
Considering that common shares have voting rights which translate to control, as opposed to preferred
shares which usually have no voting rights, the term capital in Section 11, Article XII of the
Constitution refers only to common shares.
However, if the preferred shares also have the right to vote in the election of directors, then the term
capital shall include such preferred shares because the right to participate in the control or
management of the corporation is exercised through the right to vote in the election of directors. In
short, the term capital in Section 11, Article XII of the Constitution refers only to shares of stock that
can vote in the election of directors.
In this case, foreigners hold 64.27% of the total number of PLDTs common shares, while Filipinos
hold only 35.73%. Since holding a majority of the common shares equates to control, it is clear that
foreigners exercise control over PLDT. Such amount of control unmistakably exceeds the allowable 40
percent limit on foreign ownership of public utilities expressly mandated in Section 11, Article XII of
the Constitution
Foreigners own 64.27% of the common shares of PLDT, which exercises the sole right to vote in the
election of directors, and thus exercise control over PLDT; (2) Filipinos own only 35.73% of PLDTs
common shares, thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by
Filipinos, have no voting rights; (4) preferred shares earn only 1/70 of the dividends that common

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 shares earn; (5) preferred shares have twice the par value of common shares; and (6) preferred shares
constitute 77.85% of the authorized capital stock of PLDT and common shares only 22.15%.

Jose M. Roy v. Teresita Herbosa

GR 207246

FACTS: In Gamboa v. Teves a 2011 case,the high court defined capital as referring only to common
shares or stocks entitled to vote in the election of directors and not to the total outstanding capital stock
which would include common and nonvoting preferred shares. The high court ruled that the Gamboa
decisions definition of capital has long become final and that the SEC was only implementing its earlier
ruling.

The Philippine Securities and Exchange Commission (SEC) issued a set of guidelines in 2013 titled
Memorandum circular 8 "Guidelines on Compliance with the Filipino-Foreign Ownership Requirements
Prescribed in the Constitution and/or Existing Laws by Corporations Engaged in Nationalized and Partly
Nationalized Activities." for the purposes of assisting companies and other market participants in
determining compliance with the foreign ownership limitations applicable to companies (such as PLDT)
operating in nationalized or partly nationalized industries.

In June 10, 2013, Roy, claimed that Herbosas MC 8 was tailor-made to accommodate the scheme of
PLDT for conforming with the Constitution.

The MC 8, issued after the Gamboa case, allowed PLDT to amend its incorporation papers to issue
preferred voting shares and sell these stocks to PLDT Beneficial Trust Fund Holdings Inc. to comply with
the 40-percent ceiling on foreign ownership.

ISSUE: WON the SEC's issuance of SEC-MC No. 8 is tainted with grave abuse of discretion.

The Court holds that, even if the resolution of the procedural issues were conceded in favor of petitioners,
the petitions, being anchored on Rule 65, must nonetheless fail because the SEC did not commit grave
abuse of discretion amounting to lack or excess of jurisdiction when it issued SEC--MC No. 8. To the
contrary, the Court finds SEC-MC No. 8 to have been issued in fealty to the Gamboa Decision and
Resolution.

The Supreme Court found that the Guidelines were valid but that the provisions which required the foreign
ownership test to be extended to all classes of shares separately (and not in the aggregate) were based on
obiter dicta in Gamboa and, as such, were not binding. In giving its decision the Supreme Court notably

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 observed that the flexibility of corporations to create different classes of shares in order to raise much
needed capital was an important one and that the Constitution made no reference to any intention to limit
such flexibility.

The Supreme Court also looked at the question of beneficial ownership in the context of determining the
level of foreign ownership of companies operating public utilities. It determined that in order for shares to
be owned by a Filipino for such purposes, both the legal and beneficial ownership must be held by a
Filipino. Accordingly, where a Filipino is the registered holder of a share one must also look at the
beneficial ownership, which is to be determined by an analysis of who has the right to exercise the voting
and investment powers attaching to the share. If a foreign party has the right to exercise either voting power
or investment power over such share (i.e., the decision whether to hold or sell the share), then the share is
not to be regarded as being held by the Filipino for the purposes of determining the level of Filipino
ownership under the Constitution. Given that the Philippines has an Anti-Dummy Law, which imposes
civil and criminal sanctions on those who violate the foreign ownership limitations, it is suggested that this
should not be seen as surprising and merely recognizes the need to look at substance over form.

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 INTELLECTUAL PROPERTY
I. What is a trademark?

Sign capable of distinguishing the goods or services produced or provided by one enterprise from those of
the other enterprise.
Includes a stamped or marked container of goods.

II. Principle of Territoriality

The law of trademark rests upon the principle of territoriality or the nationality, which means that
trademark protection has its source in, and is subject to the limitations of, Philippine law, not the law of the
foreign nationals country

III. Laws which govern intellectual properties in the Philippines:

RA 8293 The Paris Convention 1967

Intellectual Property Code. Is essentially a compact among the various member
-provides for the registration and protection of countries to accord in their own countries to citizens
intellectual properties (trademark, patent and of the other contracting parties trademarks and other
copyrights) rights comparable to those accorded to their own
citizens by their domestic laws

IV. How to Acquire Ownership of a trademark

Sec 122: How Marks are Acquired. - The rights in a mark shall be acquired through registration made
validly in accordance with the provisions of this law.

Section 124.2: The applicant or the registrant shall file a declaration of actual use of the mark with
evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the
application. Otherwise, the application shall be refused or the mark shall be removed from the Register by
the Director.

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Hence in reconciling Sec 122 and Sec 124.2 of RA 8293 there are 2 conditions of acquiring ownership of a mark:

1. By registration thereof, without alleging or claiming use and

2. By actual use of the mark in trade or commerce.

Consequently, your registration and actual use of the mark, even without registration thereof, is the
basis for an action to protect your trademark.

Under RA 8293, Registration doesnt perfect a trademark or trade name right. Certificate of registration is
merely a prima facie evidence that the registrant is owner of the registered mark. He must submit proof of
ACTUAL USE of the mark in commerce within 3 years from the date of filing of application. Thereafter, by
Declaration of use or nonuse within 1 yr from the 5 th anniversary of the date of registration.

RA 8293 has dispensed with the requirement, prescribed in Sec 2 of RA 166, that an applicant for registration
of a trademark, trade name, or service mark must have used the same in commerce and services not less than 2
months in the Philippines before the time the application for registration is filed. The fact that the new law has
dispensed the requirement of actual use of the mark or trade name as a pre-requisite to filing of an application of
its registration does not mean that actual use is no longer a mode of acquisition of the mark or trade name, nor
does it render actual use no longer an important element to perfect title to the mark or trade name.

In the case of Sterling Products International, Inc v Farbenfabriken Bayer Aktiengesselschaft, Friedric
Bayer organized a company which later became known as Farben FabrikenVormFriedr Bayer Co (FFB).
After their discovery of aspirin, they registered the trademark BAYER Cross in Circle in Germany. It had
a subsidiary company which later become a subsidiary of Sterling Drug Co in 1919, during the German
war. Sterling Drug, Inc. secured registrations of the BAYER trademarks in different countries of the world.
SPI, was also another subsidiary of Sterling and registered said trademarks in the Philippines for aspirins
and medicines. It appears that trademark BAYER for medicines was known in the Philippines about the
close of the 19th century. November 18, 1959, FBA applied for the registration of the BAYER CROSS IN
CIRCLE trademark with the Philippines Patent Office for animal and plant destroying agents Hence, both
registered the trademark Bayer & Bayer In Circle. In the ruling the case, the court said that It is actual
use thereof that perfects such right. Bayer Germany is actually the first user and it was this that had built up
said Trademark. It was not plaintiff's predecessor but defendant's namely Farbenfabriken or Bayer
Germany that first introduced the medical products into the Philippine market and household with the

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 Bayer mark half a century ago . Filipinos long standing belief that German products are of high quality and
associated the Bayer TM with product that came from Germany. SPI cant say that the TM popularity owes
solely to its own efforts. Clearly plaintiff rode on the German reputation in the Bayer trademark . Thus,
Defendants can continue using their marks on insectides.

V. LEGAL BASIS of RIGHTS of FOREIGN NATIONALS

Philippines obligated itself to honor and enforce the provisions of the Paris Convention which provides that
Nationals of member countries shall, as regards the protection of industrial property,:

1. Have in this country the rights specially provided by the Paris Convention that are consistent with
Philippine laws, and
2. Enjoy the privileges that Philippine laws now grant or may hereafter grant to its nationals , with
respect to patents, utuility models, industrial designs, trademarks, service marks, tradenames, and
indications of source or appellations of origin and the representation of unfair competition.

From the above provision, we can infer that it requires to 2 Conditions:

1. Comply with the formalities imposed by law upon Philippine Nationals

2. Comply with Philippine laws relating to juridical and administrative procedure and to jurisdiction

Consequently, a foreign national have the right to register and seek protection for their trademarks if he is a national
or domiciled or has a real and effective industrial establishment in a country which is a :

a. party to any convention, treaty or agreement relating to intellectual property rights or the repression of
unfair competition, to which the Philippines is also a party, or;
b. extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the extent
necessary to give affect to any provision of such convention, treaty or reciprocal law, in addition to the
rights which any owner of intellectual property is otherwise entitled by this Act. (Sec. 3 RA 8293
c.
i) As to the RIGHT TO REGISTER

Reciprocity Rights Convention Rights (PARIS CONVENTION)

Refer to the reciprocity clause of RA 8293: every trademark duly registered in the country of
1. The right to register their marks or trade names origin shall be accepted for filing and protected in
under the same terms and conditions as those its original form in the other countries of union.
applicable to local applicants or to base their -A national of a member country may register his

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applications on their home registration or to claim trademark or trade name in the IPO provided that
priority rights in connection with pending foreign the conditions for the filing and registration of
applications. trademarks shall be determined in each country of
the Union by its domestic law.

Problems/Issues that may arise in registering a mark.

1. X, with prior application for registration in his country of origin, applies for registration in the Philippines.
However Y, applies for registration with IPO on an earlier date than Xs Philippine application for registration but
later than Xs application for registration in the country of origin.

Answer: In this case, one can invoke his Right of Priority which is a right accorded to an application who has
previously filed an application in any of the member countries of considering his application filed in the Philippines
as if it were filed on the date the first application was filed in the country of origin.

The significance or importance of priority right is that a Philippine application filed by another applicant after the
priority date but earlier than the foreign applicants actual filing in the Philippines may be refused registration
because the law provides that a mark cannot be registered if it is identical with a mark with an earlier filing or
priority date, in respect of the same goods, or closely related goods or services, or if it merely resembles such a mark
as to be likely to deceive or cause confusion. The priority date initially gives the foreign applicant a better right to
the mark.

2. Can a registrant in another country enforces his right to exclusive use of trademark based on his registration
abroad?

Answer: No. The registration of a mark of such person shall be independent of the registration in the country of
origin and the duration, validity or transfer in the Philippines of such registration.

Paris Convention RA 166

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a mark duly registered in a country of the
Union shall be regarded as INDEPENDENT of
marks registered in the other countries of the
Union, including the country of origin.
Registration of a mark under the provisions of this
section shall be INDEPENDENT of the registration
in the country of origin and the duration, validity, or
transfer in the Philippines of such registration shall
be governed by the provisions of this Act.

Thus, it has been held that the registration of a mark in the United States will not afford protection against
use of the same mark in the Philippines, by another, unless the registrant or owner has either previously registered
the mark in the Philippines or actually used it in commerce in this country, in which case the protection afforded the
trademark owner is based on Philippine registration or on prior use of the mark in this country. Nor will the use of
the mark abroad create trademark rights in the Philippines, unless such mark is also used in trade in the Philippines.
(Bata Industries, Ltd v CA)

ii) As to the RIGHT TO PROTECTION

The law of trademark rests upon the principle of territoriality or the nationality, which means that
trademark protection has its source in, and is subject to the limitations of, Philippine law, not the law of the foreign
nationals country.

Any foreign national or juridical person who meets the requirements of Section 3 of this Act and does not
engage in business in the Philippines may bring a civil or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false designation of origin and false description, whether
or not it is licensed to do business in the Philippines.

Article 6bis of the Paris Convention provides that the countries of the union undertake, either
administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the
registration and to prohibit the use of a trademark which constitutes a reproduction, an imitation, or a translation,
liable to create confusion of a mark considered by the competent authority of the country of registration or use to be
well-known in that country as being already the mark of a person entitled to the benefits of this Convention and used
for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a
reproduction of any such well-known mark or an imitation liable to create confusion therewith.

In Mirpuri v Court of Appeals, the court explained the meaning and scope of Article 6bis of the Paris
Convention as follows:

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 The essential requirement under Article 6bis is that the trademark to be protected must be well-known
in the country where protection is sought. The power to determine whether a trademark is well-known lies
in the competent authority of the country of registration or use. This competent authority would be either
the registering authority if it has the power to decide this, or the courts of the country in question if the
issue comes before a court.

Thus a foreign corporation, not doing nor licensed to do business in the country, may bring and action for
infringement by alleging and showing that: 1) its mark is registered in the Philippines or it is the assignee of such
mark, or it has been in use in commerce therein, and the country of which it is a citizen or is domiciled grants
Filipino corporations the same reciprocal treatment, either by law, convention, or treaty; that the requirements are
conditions sine qua non which unless alleged in the complaint, will deprive said corporation of the legal personality
to sue and will justify dismissal of the complaint; and that an allegation that s suing under Sec 21-A RA 166 which
is now Sec 3 RA 8293 is not sufficient (Leviton Industries v Salvador). They must submit proof. They must show a
certified true copy of the law of his country granting reciprocal rights

However, where it is alleged in the complaint that the plaintiff is a national of a named country which is
adhered to the Paris Convention, its allegation that it is suing under Sec 21 RA166 now Sec3 RA 8293 is
sufficient because the reciprocal arrangement between the two countries is embodied and supplied by the Paris
Convention which being part of Philippine laws, can be taken judicial notice in infringement or unfair competition
suits. (Puma Sportschufabriken Rudolf Dassler v IAC)

VI. INFRINGEMENT AND UNFAIR COMPETITION

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action. - Any
foreign national or juridical person who meets the requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative action hereunder for opposition, cancellation,
infringement, unfair competition, or false designation of origin and false description, whether or not it is licensed to
do business in the Philippines under existing laws.

Section 156. Actions, and Damages and Injunction for Infringement. - 156.1. The owner of a registered mark may
recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either
the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or
the profit which the defendant actually made out of the infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable
percentage based upon the amount of gross sales of the defendant or the value of the services in connection with

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which the mark or trade name was used in the infringement of the rights of the complaining party.

A foreign corporation, even if it is not engaged in business in the Phils., may bring a civil or
administrative action for opposition, cancellation, infringement or unfair competition provided that only
owners of registered marks may recover damages from any person who infringes their rights.

Section 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the registered
mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any
goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply
such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution,
or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter
set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether there is actual sale of goods or services using the infringing
material.

results from the fraudulent use, either as a trademark, or trade name or as a part of a corporate
name, of anothers trademark or trade name, or a colorable imitation thereof.
The goods involved must be so related that there is likelihood of confusion of goods or confusion of
business or origin. Likelihood of confusion is a relative concept, to be determined only according to the
particular circumstance of the case.

Importance of actual use: mark or trade name

According to the case of Berris Agricultural co., Inc. vs. Abyadang 633 SCRA 196, there are two ways of acquiring
ownership of a mark:

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 The ownership of a trademark is acquired by its registration and its actual use by the manufacturer or
distributor of the goods made available to the purchasing public. Section 122 of R.A. No. 8293 provides that the
rights in a mark shall be acquired by means of its valid registration with the IPO. A certificate of registration of a
mark, once issued, constitutes prima facie evidence of the validity of the registration, of the registrants ownership
of the mark, and of the registrants exclusive right to use the same in connection with the goods or services and
those that are related thereto specified in the certificate. R.A. No. 8293, however, requires the applicant for
registration or the registrant to file a declaration of actual use (DAU) of the mark, with evidence to that effect,
within three (3) years from the filing of the application for registration; otherwise, the application shall be refused or
the mark shall be removed from the register.

Taiwan Kolin Corporation, Ltd. vs. Kolin Electronics Co., Inc. (754 SCRA 556)

A certificate of trademark registration confers upon the trademark owner the exclusive right to sue those who have
adopted a similar mark not only in connection with the goods or services specified in the certificate, but also with
those that are related thereto.

Infringement of trade name:

Sec. 165.2.(a) Notwithstanding any laws or regulations providing for any obligation to register trade names, such
names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.

(b) In particular, any subsequent use of the trade name by a third party, whether as a trade name or a mark or
collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed
unlawful.

PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY (PHILIPPINES IS A

MEMBER COUNTRY)

Nationals of member countries shall be entitled to:

(1) Rights provided by the Paris Convention in the Philippines which are consistent with Philippine Laws; and

(2) Enjoy the privileges that Philippine laws grant or may grant to its nationals.

Converse Rubber Corp. v. Universal Rubber Products, Inc. [147 SCRA 154 (1987)]

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A foreign corporation which has never done any business in the Philippines and which is unlicensed and
unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its
products bearing its corporate and trade name, has a legal right to maintain an action in the Philippines to restrain the
residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign
corporation, when it appears that the purpose of the proposed domestic corporation is to deal and trade in same
goods as those of the foreign corporation.

It cited the US case of Hanover Star Mining Co. v. Allen and Wheeler Co. (208 Fed. 513) which states:

Since it is the trade and not the mark that is to be protected, a trademark acknowledges no territorial boundaries of
municipalities or states or nations, but extends to every market where the traders goods have become known and
identified by the use of the mark.

This ruling as it was in consonance with the Convention of the Union of Paris for the Protection of
Industrial Property to which the Philippines became a party on September 27, 1965. Article 8 thereof provides that
a trade name shall be protected in all the countries of the Union without the obligation of filing or registration,
whether or not it forms part of the trademark.
The object of the Convention is to accord a national of a member nation extensive protection against
infringement and other types of unfair competition (Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F. 2d 633).

Civil Action for Infringement

Any person who shall commit the following acts without the consent of the owner shall be liable in a civil action for
infringement:

1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with: a. sale b. offering for sale c. distribution d.advertising of
any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or
in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection with:

a. sale

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b. offering for sale

c. distribution

d. advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive (IPC Sec. 155)

Criminal Infringement

Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment
from 2 -5 years and a fine ranging P50,000 - P200,000, shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155, Section 168, and Subsection 169.1 of RA 8293. (Sec.170)

This particular section superseded the RPC Arts. 188 and 189.

C. Jurisdiction 1. AM No. 2-1-11, SC, February 9, 2009

RE:DESIGNATION OF AN INTELLECTUAL PROPERTY JUDGE FOR MLA. EN BANC

A.M. No. 02-1-11-SC (Re:Designation of an Intellectual Property Judge for Manila.)

(A) - Acting on the memorandum dated 15 January 2002 of Deputy Court Administrator Christopher O. Lock,
favorably endorsed by Court Administrator Presbitero J. Velasco, Jr., the Court hereby designates Branch 24 of the
Regional Trial Court of Manila, presided over by Judge ANTONIO M. EUGENIO, JR., as Special Intellectual
Property Court for Manila in substitution of Branch 1 of said Court which was designated Special Intellectual
Property Court, then presided over by Judge Rebecca de Guia Salvador (now Associate Justice of the Court of
Appeals), pursuant to Administrative Order No. 113-95 dated 5 October 1995.

As judge of the Special Intellectual Property Court, Judge Antonio M. Eugenio, Jr. shall try and decide cases
involving violations of intellectual property rights under the Intellectual Property Code (R.A. No. 8293) committed
within the City of Manila.

The earlier designation of Branch 1 of the Regional Trial Court of Manila as a Special Intellectual Property Court is
hereby REVOKED, and the cases involving violations of intellectual property rights earlier assigned to said Branch
1 pursuant to and by virtue of Administrative Order No. 113-95 are hereby re-assigned to Branch 24 of said Court.

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(B) - Furthermore, acting on the recommendation of Hon. Associate Justice Reynato S. Puno, Chairman of the
Committee on Revision of the Rules of Court, and the Office of the Court Administrator, and in order to ensure
speedy disposition of cases involving violations of intellectual property rights under the Intellectual Property Code
(R.A. No. 8293), the following Regional Trial Courts (RTCs) are hereby designated Special Intellectual Property
Courts:

Region 1:

1)Hon. Antonio M. Esteves Presiding Judge, Branch 5 RTC, Baguio City

2)Hon. Manuel L. Argel Presiding Judge, Branch 65 RTC, Laoag City

Region 2:

1)Hon. Rolando R. Velasco Presiding Judge, Branch 6 RTC, Aparri, Cagayan

Region 5:

1)Hon. Vladimir B. Bruselas Presiding Judge, Branch 6 RTC, Legazpi City

2) Hon. Filemon B. Montenegro Presiding Judge, Branch 26 RTC, Naga City

Region 8:

1)Hon. Frisco T. Lilagan Presiding Judge, Branch 34 RTC, Tacloban City

Region 12:

1)Hon. Albert B. Abragan Presiding Judge, Branch 3 RTC, Iligan City

The foregoing Special Intellectual Property Courts shall try and decide cases involving violations of intellectual
property rights defined under the Intellectual Property Code committed within their respective territorial areas.Since
there are only a few cases of violations of intellectual property rights now pending in other branches of the
aforementioned Regional Trial Courts, such cases shall remain with and shall be decided by the branches to which
they have been assigned.Only cases hereafter filed may be assigned to the above designated special courts.

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(C) - Finally, in order to ensure a just and equitable distribution of cases among the Judges concerned, all the
aforementioned Special Intellectual Property Courts shall continue to participate in the raffles of other
cases:Provided, however, that the Executive Judges concerned shall adopt a procedure whereby every intellectual
property right case assigned to a Special Intellectual Property Court should be considered a case raffled to it and be
duly credited to such court.

This Resolution shall take effect immediately and the Office of the Court Administrator shall implement it.

Unfair Competition

Competition implies a struggle for advantage between two or more forces, each possessing, in substantially
similar if not identical degree, certain characteristics essential to the business sought. It means an independent
endeavor of two or more persons to obtain the business patronage of a third party or parties, particularly the
customers, by offering more advantageous terms as an inducement to secure trade. the test must be whether the
business does in fact compete, not whether it is capable of indirect and highly insubstantial duplication of an isolated
or non-characteristic activity [Gokongwei v. SEC, 89 SCRA 336 (1979)].

Unfair competition, previously defined in Philippine jurisprudence in relation with R.A. No. 166 and
Articles 188 and 189 of the Revised Penal Code, is now covered by Section 168 of the IP Code as this Code has
expressly repealed R.A. No. 165 and R.A. No. 166, and Articles 188 and 189 of the Revised Penal Code. Articles
168.1 and 168.2, as quoted above, provide the concept and general rule on the definition of unfair competition. The
law does not thereby cover every unfair act committed in the course of business; it covers only acts characterized by
deception or any other means contrary to good faith in thepassing off of goods and services as those of another
who has established goodwill in relation with these goods or services, or any other act calculated to produce the
same result. (Coca-Cola Bottlers, Phils., Inc. (CCBPI) vs. Gomez 571 SCRA 18)
The law does not prohibit competition. On the contrary, it is the objective of the law to foster competition,
so long as fair and legitimate means are employed. What the law prohibits is unfair competition, which to be
considered unfair must have two characteristics:

(1) it must involve an injury to a competitor or trade rival; and

(2) it must involve acts which are characterized as contrary to good conscience or shocking to judicial
sensibilities, or otherwise unlawful.

The public injury or interest appears to be a minor factor; the essence of the matter appears to be a wrong
perpetrated by unconscionable means [Davao Stevedoring Terminal Co., Inc. v. Fernandez, CA-No. 15561-R,
November 27 1957].

168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off
the goods manufactured by him or in which he deals, or his business, or services for those of the one having

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established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.

Article 28 of the Civil Code broadly defines unfair competition as follows: Unfair competition in agricultural,
commercial, or industrial enterprises or in labor through the use of force, intimidation, deceit, machination, or any
other unjust, oppressive or highhanded method shall give rise to a right of action by the person who thereby suffers
damage.

Code Commission formulated the article as it was necessary in a system of free enterprise such as in
the country. The provision seeks to reserve competition in a wholesome and free atmosphere, so that neither
in capital nor in labor may there be a monopoly through unjust means.
It was reiterated in the Intellectual Property Code wherein it provides in Sec. 168.8.3[c] thereof that:
Any person who shall make any false statement in the course of trade or who shall commit any other act
contrary to good faith of a nature calculated to discredit the goods, business, or services of another shall be
deemed guilty of unfair competition.

Willaware Products Corp. vs. Jesichris Mfg. Corp. (G.R. No. 195549, Sept. 3, 2014)

The instant case falls under Art. 28 of Civil code on human relations and NOT unfair competition under
RA 8293. The concept of "unfair competition" under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of "unfair competition" in
American jurisdictions, the term covers even cases of discovery of trade secrets of a competitor, bribery of his
employees, misrepresentation of all kinds, interference with the fulfillment of a competitor's contracts, or any
malicious interference with the latter's business. What Art. 28 seeks to prevent is not competition per se but the use
of unjust, oppressive or high-handed methods which may deprive others of a fair chance to engage in business or to
earn a living. In order to qualify the competition as unfair it must have 2 characteristics: (1) It must involve an
injury to a competitor or trade rival, and (2) it must involve acts which are characterized as contrary to good
conscience, or shocking to judicial sensibilities, or otherwise unlawful. In this case, both characteristics are
present. First, both parties are competitors or trade rivals, both being engaged in the manufacture of plastic-made
automotive parts. Second, the acts of the petitioner were clearly contrary to good conscience as petitioner admitted
having employed respondents former employees, deliberately copied respondents products and even went to the
extent of selling these products to the respondents customers. Hence, the petitioner is guilty of unfair competition
under Art. 28.

In a narrower sense, unfair competition is the act of passing off or attempting to pass off upon the public the goods,
business, or services of one as and for the goods, business, or services of another [Alhambra Cigar, Co. v. Mojica,

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27 Phil. 266 (1914)]

The Paris Convention defines unfair competition in general as any act of competition contrary to honest
practices in industrial or commercial matters and in particular as:

(1) all acts of such a nature as to create confusion by any means whatever with the establishments, the goods, or the
industrial or commercial activities of a competitor;

(2) false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the
industrial or commercial activities of a competitor; and

(3) indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature,
the manufacturing process, the characteristics, the suitability for their purpose or the quality of the goods.

Goodwill is what the law protects against unfair competition

Art. 521 of the Civil Code provides that the goodwill of a business is property, and may be transferred together
with the right to use the name under which the business is conducted.

Sec. 168.1, Intellectual Property Code

A person who has identified in the mind of the public the goods he manufactures or deals in his business or services
from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said
goods, businesses, or services so identified, which will be protected in the same manner as other property rights.

Relief against unfair competition is afforded upon the ground that one who has built up a goodwill
and reputation for his goods, business, or services is entitled to all the benefits therefrom. Such goodwill is
property and, like other property, is protected against invasion.
A foreign national is entitled to sue for unfair competition, whether or not he is doing business in the
Philippines. However, if he is doing business in the country, he has to be duly licensed to do business, and
otherwise he may be precluded from filing such suit until he has secured such license.
Injury suffered by one as a result of unfair competition is the diversion of trade and the direct loss of
sales as a consequence thereof (the means adopted by the wrongdoer are calculated to deceive and mislead
the public into thinking that the goods or business of the wrongdoer are the goods or business of the rival),
however injury may be directly to the goodwill or reputation.
Actual sale of goods with counterfeit marks or designs is not necessary to hold the offender liable for
unfair competition; intent to sell or distribute them is sufficient, which can be implied from the number of
goods he manufactured and the nature of machinery he installed for the purpose. The only adverse effect in

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case there is failure to prove the amount of damages suffered, only nominal damages and injunctive reliefs
may be awarded.

INFRINGEMENT OF TRADEMARK UNFAIR COMPETITION

As to Definition

Unauthorized use of a trademark The passing off of ones goods as those of another

As to Fraudulent Intent

Fraudulent intent as unnecessary Fraudulent intent as essential

As to Registration

Prior registration of the trademark is a Prior registration of the trademark is a prerequisite

prerequisite to the action to the action

As to Scope

Limited scope Wider scope

As to Good Involved
Same class goods or services must be involved Different classes of services may be involved

Conflict of Laws in Patent

VII. What is a Patent?

Any technical solution of a problem in any field of human activity which is new, involves an inventive step
and is industrially applicable shall be patentable. It may be, or may relate to, a product, or process, or an
improvement of any of the foregoing.

International Convention Governing Patent.

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PARIS CONVENTION 1883

HISTORY
In 1873 Empire of Austria-Hungary invited the other countries to
participate in an international exhibition of inventions at Vienna,
participation was hampered by the fact that many foreign visitors
were not willing to exhibit their inventions at that exhibition in view
of the inadequate legal protection offered to exhibited inventions. In
1883, Diplomatic Conference was convened in Paris, which ended
with final approval and signature of the Paris Convention for the
Protection of Industrial Property.
TIMELINE Since 1883 it has been revised at Brussels in 1900, in Washington
in 1911, in Hague in 1925, in London in 1934, at Lisbon in 1958,
and at Stockholm in 1967.

Signatories As of 2017 there are 177 signatories

Philippines The Philippine become a member of the convention on September

27, 1965.

The Philippines adherence to the Paris Convention means that the Philippines obligated itself to honor and enforce
the provisions of the said convention. (La Chemise Lacoste, S.A. vs. Fernandez)

PURPOSE OF THE PARIS CONVENTION

Basic Principles of PARIS CONVENTION

To Protect various forms of Intellectual Property, such as Patents, Utility Models,
Industrial Designs, Trademarks, Service Marks, Trade Names, indication of source or
1. National treatment means that, as regards the protection of industrial property, each
appellation of origin.
country party to the Paris Convention must grant the same protection to nationals of
the other member countries as it grants to its own nationals. The relevant provisions
are contained in Articles 2 and 3 of the Convention.

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 2. Article 4 of the Paris Convention speaks about the right to priority in matters of
Industrial Property Registration. Under this principle the date of Application in one
member country would be deemed to be the application in other member countries, if
the priority is claimed within the prescribed time of application.
3. Article 4 of the Convention talks about the Independence of patents. It means that the
grant of a patent for invention in one country for a given invention does not oblige any
other member country to grant a patent for invention for the same invention.
Furthermore, the principle means that a patent for invention cannot be refused,
invalidated or otherwise terminated in any member country on the ground that a
patent for invention for the same invention has been refused or invalidated, or that it
is no longer maintained or has terminated, in any other country.
4. A general rule states that the inventor must have the right to be mentioned as such in
the patent for invention. This is stated in Article 4ter.

5. The grant of a patent may not be refused, and a patent may not be invalidated, on the
ground that the sale of the patented product, or of a product obtained by means of the
patented process, is subject to restrictions or limitations resulting from the domestic
law. ( Article 4quater.)
6. Each country of the Union shall have the right to take legislative measures providing
for the grant of compulsory licenses to prevent the abuses which might result from the
exercise of the exclusive rights conferred by the patent, for example, failure to work.

Laws which govern Patent in the Philippines.

RA 8293(INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES)

PART II

THE LAW ON PATENTS

( Section 20 to Section 120)

SEC. 71. Rights Conferred by Patent. 71.1. A patent shall confer on its owner the following
exclusive rights:

(a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent any

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 unauthorized person or entity from making, using, offering for sale, selling or importing that
product;

(b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit any
unauthorized person or entity from using the process, and from manufacturing, dealing in, using,
selling or offering for sale, or importing any product obtained directly or indirectly from such
process.

VIII. RIGHTS of FOREIGN NATIONALS with respect of their COPYRIGHTABLE WORKS under
the Philippine Laws.

The Paris Convention RA 8293 (Intellectual Property Code of the

Philippine)

Nationals of any country of the Union shall, as

regards the protection of industrial property, Grant the same or reciprocal rights to citizen of the
enjoy in all the other countries of the Union the state who are signatories to international
advantages that their respective laws now conventions, treaty or agreement relating to
grant, or may hereafter grant, to nationals; all intellectual property, or extends reciprocal rights to
without prejudice to the rights specially nationals of the Philippines by law. (Section 3 of
provided for by this Convention. R.A. 8293.)
Consequently, they shall have the same
protection as the latter, and the same legal
remedy against any infringement of their
rights, provided that the conditions and
formalities imposed upon nationals are
complied with. (Article 5, Section A, Par. 2 of
the Berne Convention)

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In the case of Puma PUMA SPORTSCHUHFABRIKEN RUDOLF DASSLER, K.G. vs. IAC, the
Court takes judicial notice of the countrys membership in the Paris Convention, but not the
patentees nationality or country of domicile or place of real and effective industrial establishment,
which must be alleged and proved. If the patentee relies on reciprocity as the basis of right, he must
submit proof of his country reciprocal law, which extends similar rights and priveleges to nationals
of the Philippines.

IX. Priority Right under Paris Convention and IP Code

RA 8293 (Intellectual Property Code of the

The Paris Convention
Philippine)

Any person who has duly filed an application for

a patent, or for the registration of a utility
model, or of an industrial design, or of a
trademark, in one of the countries of the Union,
or his successor in title, shall enjoy, for the
purpose of filing in the other countries, a right of
priority during the periods hereinafter fixed.
(Article 4, Sec. A, Par. 1 of the Convention)
SEC. 31. Right of Priority. An application
for patent filed by any person who has previously
applied for the same invention in another country
which by treaty, convention, or law affords similar
privileges to Filipino citizens, shall be considered as
filed as of the date of filing the foreign application.

Requisites

(1) The periods of priority referred to above

shall be twelve months for patents and utility Provided, That: (a) the local application
models, these periods shall start from the date of expressly claims priority; (b) it is filed within
filing of the first application; the day of filing twelve (12) months from the date the earliest
shall not be included in the period. foreign application was filed; and (c) a certified

(2) The countries of the Union may require any copy of the foreign application together with an

person making a declaration of priority to English translation is filed within six (6) months

produce a copy of the application (description, from the date of filing in the Philippines.

drawings, etc.) previously filed.

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 The Philippines being one of the member of the Paris Convention and pursuant to the
international law principle of Pacta Sunt Servandta, bind itself to observe the agreement which are
stated under the Paris Convention. In adherence to such undertaking, Sec 31 of the IP Code also
known as Right Priority was embodied and promulgated. The 12 month period of priority under the
Paris Convention was also provided under Sec 31 of the IP Code.

Other Provision of RA 8293 (Intellectual Property Code of the Philippine) related to Conflicts of Laws.

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 SEC. 77. Infringement Action by a Foreign
National. Any foreign national or juridical
entity who meets the requirements of Section 3
and not engaged in business in the Philippines,
INFRINGEMENT to which a patent has been granted or assigned
under this Act, may bring an action for
infringement of patent, whether or not it is
licensed to do business in the Philippines
under existing law.

A Foreign grantee of a patent, issued by Bureau of Patents, Trademarks and Technology

Transfer, is entitled to file a suit for infringement of its patent. The requirements for the foreign
patentees or his assignee right to file an infringement suit, may be gleaned from Article 3 of RA
8293, which are; That he is a national or is domiciled or has real and effective industrial
establishment in any of the countries which is a member of the Paris Convention; or which
extends reciprocal rights to nationals of the Philippines by law.

Licensing
o Compulsory Licensing under Paris Convention and IP Code

Paris Covention RA 8293 (Intellectual Property Code of the

Each country of the Union shall have the right to
take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which
might result from the exercise of the exclusive
rights conferred by the patent, for example, failure
to work. (Article 5, Sec. A, Par. 2)
A compulsory license (a license not granted by the
owner of the patent but by a public authority of the
State concerned), based on failure to work or
insufficient working of the patented invention, may
only be granted pursuant to a request filed after
three years from the grant of the patent or four
years from the filing date of the patent application,
Philippine)
The Director of Legal Affairs may grant a license
to exploit a patented invention, even without the
agreement of the patent owner, in favor of any
person who has shown his capability to exploit the
invention. (SEC. 93. Grounds for Compulsory
Licensing.)
Compulsory License is primarily governed by
Section 93 to 102 of RA 8293. The Compulsory
License may be granted under any of the
circumstances enumerated under Section 93. A
compulsory license may not be applied for on the
ground stated in Subsection 93.5 (If the patented

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and it must be refused if the patentee gives invention is not being worked in the Philippines on
legitimate reasons to justify this inaction. a commercial scale, although capable of being
Furthermore, forfeiture of a patent may not be worked, without satisfactory reason) before the
provided for, except in cases where the grant of a expiration of a period of four (4) years from the
compulsory license would not have been sufficient date of filing of the application or three (3) years
to prevent the abuse. In the latter case, proceedings from the date of the patent whichever period
for forfeiture of a patent may be instituted, but only expires last. While compulsory license which is
after the expiration of two years from the grant of applied for on any of the grounds stated in
the first compulsory license. Subsections 93.2, 93.3, and 93.4 and Section 97
may be applied for at any time after the grant of the
patent.
In the case of Smith Kline and French Laboratories, Ltd. Vs Court of Appeals, the grant of compulsory
licensing under similar provsions under the old law, R.A. Act. 165, which have now been re-enacted with
some modifications in R.A. 8293 was challenged by Smith Kline, is the assignee of Letters Patent No.
12207 covering the pharmaceutical product Cimetidine. Petetioner invoked Article 5, Section A of the
Paris Convention. In rejecting the challenged, the Court ruled that the grant of compulsory license is
authorized by law, in cases among other, that the patent refers to food or medicine or manufactured
products or substance which can be used as medicine or food, or is necessary for public health and public
safety. The Court also said that Section A(2) of Article 5 [of the Paris Convention] unequivocally and
explicitly respects the right of member countries to adopt legislative measures to provide for the grant of
compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights
conferred by the patent.

Volunatry Licensing

88.1. That the laws of the Philippines shall govern the interpretation of the
same and in the event of litigation, the venue shall be the proper court in
VOLUNTARY
the place where the licensee has its principal office
LICENSING

Technology transfer arrangement

4.2. The term "technology transfer arrangements" 88.3. In the event the technology transfer
refers to contracts or agreements involving the arrangement shall provide for arbitration, the
transfer of systematic knowledge for the Procedure of Arbitration of the Arbitration
manufacture of a product, the application of a Law of the Philippines or the Arbitration

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Definition of Copyright under Berne Convention

Copyright is an expression literary and artistic works shall include every production in the literary,
scientific and artistic domain, whatever may be the mode or form of its expression (Article 2. Par.1 of
the Convention)
It shall, however, be a matter for legislation in the countries of the Union to prescribe that works in
general or any specified categories of works shall not be protected unless they have been fixed in
some material form. (Article 2, Par.2 of the Convention)

process, or rendering of a service including Rules of the United Nations Commission on

management contracts; and the transfer, assignment
or licensing of all forms of intellectual property
rights, including licensing of computer software
except computer software developed for mass
market.
International Trade Law (UNCITRAL) or the
Rules of Conciliation and Arbitration of the
International Chamber of Commerce (ICC)
shall apply and the venue of arbitration shall
be the Philippines or any neutral country;

X. What is a copyright?

Copyright is a right granted by statute to the author or originator of literary, scholarly, scientific, or artistic
productions, including computer programs.

International Convention Governing Copyright

BERNE CONVENTION 1886

The Berne Convention for the protection of Literary and Artistic was
develop at the instigation of Victor Hugo of the Association Litteraire
HISTORY
et ArtistiqueInternationale. It was influenced by the French right of
the author (droitdauteur)

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 The Berne Convention was revised in Paris in 1886 and in
Berlin in 1908. It was completed in Berne in 1914, revised in
TIMELINE
Rome in 1928, in Brussels in 1948, in Stockholm in 1967 and
in Paris in 1971 and was amended in 1979.

The Philippine is one of

At present there are 174 signatory countries out of about 192 countries
the signatory of BERNE
in the world today.
CONVENTION

Laws which govern Copyright in the Philippines

RA 8293(INTELLECTUAL COPYRIGHT SAFEGUARDS AND

PROPERTY CODE OF THE REGULATIONS
PHILIPPINES)
172.1. Literary and artistic works,
hereinafter referred to as "works," are Works are protected from the moment
original intellectual creations in the of their creation, irrespective of their
literary and artistic domain protected mode or form of expression, as well as
from the moment of their creation and their content, quality, and purpose.
shall include in particular. (Rule 17. SECTION 1. Works
Protected Upon Creation.
Specifically Part IV Section171-229 of
RA 8293

A. Scope of Protection of Copyright Works under RA 8293

Economic Right: The copyright or economic rights shall consist of the exclusive right to carry out,
authorize or prevent the following acts the reproduction of the work or substantial portion of the work; the

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 dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work; the
first public distribution of the original and each copy of the work by sale or other forms of transfer of
ownership; rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in
a sound recording, a computer program, a compilation of data and other materials or a musical work in
graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental;
public display of the original or a copy of the work; public performance of the work; and other
communication to the public of the work. (SEC. 177. Copyright or Economic Rights.) The term of
protection is during the life of author and for fifty (50) years after his death. (SEC. 213. Term of
Protection.)
Moral Rights. The author of a work shall have the right to require that the authorship of the works be
attributed to him, in particular, the right that his name, as far as practicable, be indicated in a prominent
way on the copies, and in connection with the public use of his work; to make any alterations of his work
prior to, or to withhold it from publication; to object to any distortion, mutilation or other modification of,
or other derogatory action in relation to, his work which would be prejudicial to his honor or reputation;
and to restrain the use of his name with respect to any work not of his own creation or in a distorted version
of his work. (SEC. 193. Scope of Moral Rights.) The rights of an author under this chapter shall last during
the lifetime of the author and for fifty (50) years after his death and shall not be assignable or subject to
license. (SEC. 198. Term of Moral Rights.)

XI. RIGHTS of FOREIGN NATIONALS with respect of their COPYRIGHTABLE WORKS under
the Philippine Laws.

The Berne Convention RA 8293 (Intellectual Property Copyright Safeguards and Regulations. (Rule
Code of the Philippine) 18)
Authors shall enjoy, in Any condition, restriction,
respect of works for which Grant the same or reciprocal requirement, penalty or any similar
they are protected under this rights to citizen of the state who burden imposed by the law of a foreign
Convention, in countries of are signatories to international country on a Philippine national shall
the Union other than the conventions, treaty or reciprocally be enforceable upon
country of origin, the rights agreement relating to nationals of said country. (Reverse
which their respective laws intellectual property, or Reciprocity of Foreign Laws)
do now or may hereafter extends reciprocal rights to Any person who is a national of a
grant to their nationals, as nationals of the Philippines by country which is a party to any
well as the rights specially law. (Section 3 of R.A. 8293.) convention, treaty, or agreement
granted by this Convention. relating to intellectual property rights
(Article 5 Par. 2 of the Berne or extends reciprocal rights to nationals

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Convention) of the Philippines by law, shall be
entitled to benefits to the extent
necessary to give effect to any provision
of such convention, treaty or reciprocal
law. (International Conventions and
Reciprocity)

The main thrust of the Berne Convention is the application of the principle of National Treatment with
respect to the protection of the rights of the authors of literary and artistic works. Since the Philippines is a signatory
of the Berne Convention, our country has signifies its intention to honor its provisions. Indeed the National
Treatment principle has been embodied and promulgated under the Philippine laws especially under the Sec. 3 of
R.A. 8293 and Rule 18 of Copyright Safeguards and Regulations.

This concept, however does not resolve conflict of law issues in intellectual property. It does not answer the
question what law to apply or what approach to utilize to harmonize the conflict of laws. Because the national
treatment principle bars the extraterritorial application of foreign copyright laws for it mandates the application of
local laws for the equal treatment of the rights of foreigners. Otherwise there could be no national treatment if
foreign laws are applied. (Subafilms, Ltd. vs. MGM Pathe Communications Co. 1994.)

XII. Conflicts of law of Copyrightable Works created during the course ofEmployment

Under section 178.3. of RA 8293 In the case of work created by an author during and in the course
of his employment, the copyright shall belong to|:
(a) The employee, if the creation of the object of copyright is not a part of his regular duties even if
the employee uses the time, facilities and materials of the employer.
(b) The employer, if the work is the result of the performance of his regularly-assigned duties,
unless there is an agreement, expressed or implied, to the contrary.

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General Rule: Lex Loci Voluntatis. The mutual
obligations of employer and employee in relation to the
transfer or license of an intellectual property right
arising from the employees efforts, in particular the
right of the employer to claim the intellectual property
right and the right of the employee to remuneration,
shall be governed by the law chosen by the parties in
accordance with Article. (Conflicts of Law Intellectual
Property, European Max Plank Group on Intellectual
Property)
Exception: Lex Loci Laboris. If the law has not been
chosen by the parties, the mutual obligations of
employer and employee in relation to the an
intellectual property right arising from the employees
efforts, in particular the right of the employer to claim
the intellectual property right and the right of the
employee to remuneration, shall be governed by the
law of the State in which the employee habitually
carries out her/his work in performance of the contract.
(Conflicts of Law Intellectual Property, European Max
Plank Group on Intellectual Property)

XIII. Conflicts of Laws with respect to Infringement and other remedies in Copyrightable Works

LexProtectionis. Lex Loci Delicti.

The law applicable to the infringement is the
law of each State for which protection is
sought. This rule is embodied in the article 5
paragraph 2 of Berne Convention the
extent of protection, as well as the means of
redress afforded to the author to protect his
rights, shall be governed exclusively by the
laws of the country where the protection is
claimed.
In the case of Itar-Tass Russian News
Agency vs. Russian Kurier, Inc. the principle
of Lex Loci Delicti( employs the law of the
place of the injury) is applied in determining
whose law should be applied in infringement
case. So if an infringing act is committed
within the borders of State X, it is the law of
the State X that will govern the tort claim.

Lex Loci Delicti: This is the traditional rule that employs the law of the law of the place of the injury. This is
fairly straightforward since what only needs to be done is the application of the law of the place where the injury
was sustained. So when someone is wronged at a particular place, the rights of the parties arises from that

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jurisdiction whose law must then be applied to determine the right of the parties. (Itar-Tass Russian News Agency
vs. Russian Kurier, Inc.).

However Lex Loci Delicti and Lex Protectionis are basically the same concept, because infringement
complaint is filed in the place where the act of infringement is committed, it necessary follows that the law of that
place wherein the protection is sought should be applied, which is always the place where the act of infringement is
committed.

LexFori (Law of the Forum)

Remedial law shall be govern by LexFori (Law of the Forum). The procedure in
action for infringement and any other remedies in which the subject matter of the
action is the Intellectual Property shall be governed by the law of the estate in which
the action is brought.

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 CONTRACTS
CONTRACTS

I. Conflict of Laws in Contractual Relations

Contract
o Article 1305, Civil Code: A contract is a meeting of minds between two persons whereby
one binds himself, with respect to the other, to give something or to render some service.
The parties are free to stipulate the terms and conditions of their relationship.
These terms and conditions become the law of the contract.
Foreign element is imperative for a contractual relation to induce a conflict of laws scenario.
o It usually involves international contracts where the parties have their establishments in
different states.
Contracts are subject to the law stipulated by the parties to be their choice of law.
o No stipulation: lex loci contractus (law of the place where the contract is executed)

II. Primacy of Contractual Stipulations

Article 1306, Civil Code: 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.
The parties are free to stipulate the terms and conditions that will govern their contractual relation
o These comprise the agreement of the parties
o These stipulations constitute the law between the parties and will be applied in case of dispute
o The parties are expected to follow these terms and no derogation shall be allowed
Except: when these are contrary to law, good customs, public order, and public
policy

Norse Management Co. vs. National Seamen Board

Facts:

The deceased, husband of complainant herein, was employed as a Second Engineer by respondents and
served as such in the vessel, M.T. Cherry Earl. While at sea, he suffered apoplectic stroke and died four days later.
Complainant widow thus filed a claim for death benefits and contended that in determining amount of the claim, the
law of Singapore, where the vessel is registered, should be considered. For its part, the respondents argue

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thatPhilippine laws should govern considering that the law of Singapore was never presented and the NSB cannot
take judicial notice of foreign laws.

Issue: Whether or not the law of Singapore ought to be applied in the case.

Held: YES. The law of Singapore should be applied.

Ratio:

In the aforementioned "Employment Agreement" between petitioners and the late Napoleon B. Abordo, it
is clear that compensation shall be paid under Philippine Law or the law of registry of petitioners vessel, whichever
is greater. Since private respondent Restituta C. Abordo was offered P30,000.00 only by the petitioners, Singapore
law was properly applied in this case. The "Employment Agreement" is attached to the Supplemental Complaint of
Restituta C. Abordo and, therefore, it forms part thereof. As it is familiar with Singapore Law, the National Seamen
Board is justified in taking judicial notice of and in applying that law.

Bagong Filipinas Overseas Corporation vs. National Labor Relations Commission

(G.R. No. L-66006, February 28, 1995)

Facts:

Pancho entered into a shipboard employment contract with Hong Kong-based firm Bagong Filipinas
Overseas Corporation. Pancho was hired to work as an oiler in the M/V Olivines for a period of 12 months with a
gross monthly wage of US $195. During the term of the contract, Pancho had a cerebral stroke necessitating his
repatriation to the Philippines, where he eventually died. The National Seamen Board awarded his widow,
Proserfina, P20,000 as disability compensation benefits. Upon appeal, the NLRC awarded her $621 times 36 months
or its equivalent in Philippine currency by applying Hong Kong law in computation of benefits.

Issue: Whether Hong Kong law should govern the award of benefits to Panchos wife.

Held: NO. The shipboard employment contract governs the award of benefits.

Ratio:

Hong Kong law on workmens compensation is not the applicable law. The case of Norse Management Co.
v. National Seamen Board cannot be a precedent because it was expressly stipulated in the employment contract in
that case that the workmens compensation payable to the employee should be in accordance with Philippine Law or
the Workmens Insurance Law of the country where the vessel is registered "whichever is greater."

Atienza vs. Philimare Shipping

(176 SCRA 325, 1989)

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Facts:

Joseph B. Atienza worked as Third Mate on board MV Tibati for the stipulated compensation of US $850 a
month from January 20, 1981 to January 20, 1982. His employment was covered under the Crew Agreement, which
provided insurance benefits as per NSB Standard Format and was validated and approved by the National Seamen
Board on January 14, 1981. Atienza died while working on the vessel in Bombay, India. His father claimed for death
benefits in the amount of $30, 600, which was computed at the rate of 36 months times the seamens monthly salary
plus 10 percent thereof pursuant to the Workmens Compensation Law of Singapore. Philimare disputed the amount
and argued that the death benefits were limited to P40,000 pursuant to Section D (1) of the NSB Standard Format.
The POEA ruled in favor of Philimare and held Philippine law to be the applicable law.

Issue: Whether or not Atienzas death benefits should be computed based on Philippine Law.

Held: YES. Atienzas death benefits should be based on Philippine Law.

Ratio:

Norse ruling is not applicable to the present petition. The reason is that in that case, it was specifically
stipulated by the parties in the Crew Agreement that compensation shall be paid to employee in accordance with
and subject to the limitations of the Workmens Compensation Act of the Philippines or the Workmens Insurance
Law of the registry of the vessel, whichever is greater. That was why the higher benefits prescribed by the foreign
law were awarded. By contrasts, no such stipulation appears in the Crew Agreement now under consideration.
Instead, it is clearly stated therein that the insurance benefits shall be as per NSB Standard Format, in the event
of death of seaman during the term of his contract, over and above the benefits for which the Philippine
Government is liable under Philippine law.

This case did not provide for such higher benefits as the parties did in the Norse case. There was no
stipulation in the Crew Agreement of January 3, 1981, that the employee would be entitled to whichever greater
insurance benefits were offered by either Philippine law or the foreign law; on the contrary, it was plainly provided
that insurance benefits would be determined according to the NSB Standard Format then in force. The consequence
is that the petitioner cannot now claim a higher award than the compensation prescribed in the said format.

Pakistan International Airlines vs. Blas Ople

(G.R. No. 61594, September 28, 1990)

Facts:

Petitioner Pakistani International Airlines (PIA) entered into two separate contracts with respondent
Farrales and Mamasig with the following terms and conditions:

a) The agreement is for a period of 3 years, but can be extended by the mutual consent of the parties

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b) PIA reserves the right to terminate the agreement at any time by giving the Employee notice in writing in
advance 1 month before the intended termination, or in lieu thereof, by paying the Employee to 1 months
salary.
c) The agreement shall be construed and governed under and by the laws of Pakistan, and only Courts of Karachi,
Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.
Respondents trained in Pakistan and began working as flight attendants for PIA, with base station in Manila
and flying assignment to different parts of Middle East and Europe. With 1 year and 4 months remaining in their
contract of employment, PIA terminated the services of private respondents effective September 1, 1980,
conformably to clause 6(b) of the employment agreement executed with PIA.

Private respondent subsequently instituted a complaint for illegal dismissal and non-payment of benefits
and bonuses against PIA with the Ministry of Labor and Employment (MOLE). Acting on the complaint, MOLE
Regional Director ordered their reinstatement with full backwages or, in the alternative, the payment to them of the
amounts equivalent to their salaries for the remainder of the fixed 3-year period of their employment contracts. On
appeal, MOLE Deputy Minister affirmed the award of the Regional Director.

Issue: Whether or not Pakistani law is the applicable law.

Held: NO. Pakistani law cannot be applied as it violates the labor laws of the Philippines.

Ratio:

A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the law
between the parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in
Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem
convenient, "provided they are not contrary to law, morals, good customs, public order or public policy." Thus,
counterbalancing the principle of autonomy of contracting parties is the equally general rule that provisions of
applicable law, especially provisions relating to matters affected with public policy, are deemed written into the
contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions
of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law
relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with each other. It is thus
necessary to appraise the contractual provisions invoked by petitioner PIA in terms of their consistency with
applicable Philippine law and regulations.

III. Choice of Law Stipulations

PRINCIPLE OF AUTONOMY OF CONTRACTS - allows the parties to stipulate the law that shall govern their
contractual relations

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 o A choice of law stipulation will greatly aid in the achievement of the objectives of the parties
in entering into a contract
The parties may provide:
A foreign law or a local law
That two or more foreign laws govern their relationship or that a foreign
law/s and local law/s be made applicable to their contract
That the stipulated law may have general or limited applicability
If the parties do not specify the extent of the applicability of their chosen law, the chosen law will
normally apply to the following concerns:
1) Interpretation
2) Rights and obligations arising from the contract
3) Performance and the consequences of non-performance, including the assessment of damage
4) The various ways of extinguishing obligations, and prescription and limitation periods
5) Validity and the consequences of invalidity of the contract
6) Burden of proof and legal presumptions
7) Pre-contractual obligations
If there is no express contract, the courts of the forum will apply any of the conflict of law rules, such
as lex loci celebrationis or State of the Most Significant Relationship Theory.
If there is no agreement or treaty, the plaintiff makes the choice of the forum, or the court where the
action or complaint is filed.
Saudi Arabia Airlines vs. CA - there being no choice of law clause in the employment
contract, the plaintiff chose to file her case before the courts of her home country and the
Philippine court applied the State of the Most Significant Relationship Theory to resolve the
case in her favor

IV. Waiver of Renvoi

Renvoi Doctrine (Table Tennis Theory) - The conflict of law rule of the forum resorts to the foreign
law, which in turn refers back to the law of the forum.
Aznar vs. Garcia
Bellis vs. Bellis
To prevent complications, parties may waive the application of renvoi in case the same is provided by
a foreign law.
Meaning: the rules of private international law will find no application once a foreign law is
chosen by the parties

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 There is a growing trend of excluding conflict of law provisions in a choice of law stipulations in
contracts.
Example: Article 8 of The Hague Principles on Choice of Law in International Commercial
Contracts
A choice of law does not refer to rules of private international law of the law chosen
by the parties unless the parties expressly provide otherwise.
Reason: to avoid the complexity of the application of conflicts of law rules that point
to another law when the parties specifically intended a particular law to govern their
contractual relations
A choice of law is not mandatory.
Capacity to contract is generally governed by the national law of the parties.
Article 15 of the Civil Code

V. Approaches to Contractual Conflicts of Law

Three principles in addressing the issue of applicable law in contractual disputes:

1. Lex loci contractus (law of the place where the contract is executed)
Reason: the parties mindsets are usually focused on the law of the place of execution
when they enter into contracts
It is the default law based on the presumption that the parties would have specified a
particular law if they did not want local law to govern their contractual relationship.

Erie Insurance Exchange vs. Edmund D. Heffernan II

925 A.2d 636 (md. 2007)

Facts:

Two minors, Mallory Heffernan and Curtis Jones, were passengers in a vehicle driven by another minor,
John McMahon, Jr. While driving in the State of Delaware with his two passengers, McMahon fell asleep and
collided with a tractor-trailer. All of them perished in the collision. Heffernans parents held a Pioneer Family Auto
Policy and a Personal Catastrophe Policy with Erie Insurance which were issued, sold, and delivered in Maryland to
Maryland residents. The auto policy included underinsured motorists coverage. The vehicle driven by Mr.
McMahon was an underinsured motor vehicle with respect to the Erie policy.The parents of the minor Heffernan
sued Erie in the Circuit Court for Baltimore City, Maryland, seeking damages pursuant to the underinsured motorists
coverage. Erie subsequently removed the the case to federal court contending that Maryland law should be applied,
including Marylands cap on non-economic damages which would drastically reduce the damages that the parents

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could recover. The Erie policies provide that Erie will pay damages that the law entitles you to recover from the
owner or operator of an underinsured vehicle.

Issue: Whether or not Maryland law governs the claim of Heffernans.

Held: NO. Delaware is the applicable law.

Ratio:

The action by the insured against an insurer is a contract action. Recovery is based upon the element of
tortious conduct, in this case, the negligence of a third party. In deciding questions of interpretation and validity of
contract provisions, Maryland courts ordinarily should apply the law of the jurisdiction where the contract was
made. This is referred to as the principle of lex loci contractus. Both the Heffernans and Erie concede that the
automobile insurance policy issued to the Heffernans by Erie was issued, delivered, and executed in Maryland, and
is therefore, a Maryland contract. To that end, for choice of law purposes, we generally would apply Maryland law
to decide questions of the interpretation and validity of the policies issued by Erie to the Heffernans.

The question here is the applicability of the appropriate substantive law to resolve the issues of tort liability
and damages. Because the nature of the problem relates to tort, rather than contract principles, we look to tort choice
of law principles, namely, the law of the place of the accident to answer the question. In that regard, Delaware is the
place of tort and the place of injury.Maryland law is clear that in conflict of law situation, where the events giving
rise to a tort action occur in more than in one State, we apply the law of the State where the injury - the last event
required to constitute the tort occurred. This principle is lex loci delicti. Consistent with the principle of lex loci
delicti, because the automobile collision occurred in Delaware under Maryland law, Court would apply the
substantive tort law of Delaware to determine what the claimants are entitled to recover in an action for uninsured
motorist benefits.

Government vs. Frank

G.R. No. L-2935, March 23, 1909

Facts:

Mr. Frank, an American citizen from Illinois, USA, entered into a contract with the Philippine government to serve
as a stenographer for a period of two years. He served for only six months, and, therefore, the government sued for
damages. Frank presented minority as a defense. The contract was entered into in Illinois (Frank was considered
an adult); under Philippine laws, Frank was still a minor.

Issue: Whether or not the contract is valid.

Held: Yes, the contract is valid because at the time the contract was entered into in the State of Illinois, he was an
adult under the laws of that State and had full authority to contract. No rule is better settled in law than that matters

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bearing upon execution, interpretation, and validity of a contract are determined by the law of the place where the
contract is made. Therefore, Frank can be held liable for damages.

2. Lex loci celebrationis (law of the place where the contract is performed or celebrated)
Article 17, Civil Code: The forms and solemnities of contracts, wills, and other public
instruments shall be governed by the laws of the country in which they are executed.
Reason: since a contract is to be performed in a particular place or state, it is but proper
that the law of that state govern the relationship of the parties
Exceptions:
If the contract involves sale of property, the formalities of the lex situs must be
complied with.
If the contract is celebrated in a foreign country (but within the premises of the
Philippine embassy or consulate in said foreign state), Philippine formalities
must be complied with, because under the principle of exterritoriality, it is as if
the embassy or consulate is considered an extension of Philippine territory.

3. State of the most significant relationship rule (law of the place with the most connection to the
dispute)
Basically a matter of convenience and practicality as it seeks to apply the law of the place
that has the most connecting factors to the contract
Embodied in Section 188 of Restatement (Second) of Conflict of Laws
The connecting factors to be considered are:
The place of performance
The location of the subject matter of the contract
The domicile, residence, nationality, place of incorporation, and place
of business of the parties
Drawback: its complexity and tendency to create confusion as one will have to list and
examine the connecting factors of a state to a pending contractual dispute

In re KMH
169 P.3d 1025 (2007)

Facts:

Kansas resident SH, an unmarried female lawyer, wanted to become a parent through artificial
insemination from a known donor. The donor, another Kansas resident named DH, agreed to provide the sperm for

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the insemination. The inseminations were performed on SH in Missouri, although they made and agreed on the
insemination in Kansas. They did not enter into a written contract regarding the insemination.SH delivered two
twins months after the inseminations were performed. SH then filed a CINC petition concerning the twins, seeking a
determination that DH would have no parental rights. DH filed an answer and, at the same time, filed a separate
paternity action acknowledging his financial responsibility for the children and claiming parental rights. SH filed a
motion to dismiss the paternity suit. The judge then granted SHs motion to dismiss, ruling that Kansas law
governed and that DH had no legal or parental rights over the twins.

Issue: Whether or not Kansas law governed the CINC and paternity suits between SH and DH.

Held: YES. Kansas law applied.

Ratio:

Various factors are relevant to a choice-of-law determination, including procedural or substantive nature of
the question involved, the residence of the parties involved, and the interest of the State in having its law applied. As
long as Kansas has significant contact or significant aggregation of contacts . . . to ensure that the choice of Kansas
law is not arbitrary or unfair, constitutional limits are not violated. Also, to the extent this case is viewed as a
contractual dispute, Kansas courts apply the Restatement (First) of Conflict of Laws and the doctrine of lex loci
contractus.Kansas courts have often leaned toward a lex fori, or law of the forum approach, opting to apply Kansas
law absent a clear showing that another states law should apply. Whether a child is legitimate is determined by the
local law of the state which, with respect to the particular issue, has the most significant relationship to the child and
the parent.

Here, the parties are Kansas residents. Whatever agreement that existed between the parties was arrived at
in Kansas, where they exchanged promises supported by consideration, and DH literally delivered on his promise of
giving sperm to SH. The twins were born in Kansas and reside in Kansas. The only fact tying any of the participants
to Missouri is the location of the clinic where the insemination was performed. Under this circumstances, Kansas
law applies and that significant contacts and significant aggregation of contacts with Kansas make application of the
law to the parties claims not only appropriate but also constitutional.

VI. Depecage

Buchanan vs. Doe

Depecage - process whereby different issues in a single case arising out of a single set of facts
may be decided according to the laws of different states
It has always been understood that different substantive issues could properly be decided
under the laws of different states, when the choice-influencing considerations differ as
they apply to the different issues.
This was applied in the case of Erie Insurance Exchange vs. Edmund D. Heffernan II

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 The court looked at Maryland law (lex loci contractus) in interpreting the
policys contractual provisions, but applied Delaware law (lex loci delicti) in
determining tort liability.

VII. Philippines Follows Lex Loci Contractus

Our courts are obliged to apply the law of the place of execution of the contract in case a conflict of
laws dispute concerning contracts is brought to the courts.
If a contract is executed in the Philippines and the contract specifies no choice of law, the governing
law will be Philippine law.

Triple Eight Integrated Services, Inc. vs. NLRC

G.R. No. 129584, December 3, 1998

Facts:

Private respondent Osdana was recruited by petitioner for employment with the latters principal, Gulf Catering
Company (GCC). Petitioner and private respondent signed a Contractor-Employee Agreement, which provided that
she would be employed as a waitress for 12 months with a salary of US $280. Osdana left for Riyadh, Saudi Arabia,
commenced working for GCC, and was assigned to the College of Public Administration of Oleysha University. She
was made to perform tasks which were unrelated to her job designation as waitress. Osdana suffered from numbness
and pain in her arms that led to her confinement at the Ladies Villa, a housing facility of GCC. When she returned to
work, she was re-assigned and made to work long hours and under harsh conditions. This caused her to develop
Bilateral Carpal Tunnel Syndrome that led to her hospitalization. She was subsequently dismissed from work and
was not given her separation pay nor was she paid salaries.

When she returned to the Philippines, Osdana filed a complaint with the POEA against the petitioner for unpaid and
underpaid salaries, salaries for the unexpired portion of the employment contract, moral, exemplary damages and
attorneys fees, as well as the revocation, cancellation, suspension, and/or imposition of administrative sanction
against petitioner. The case was later transferred to the arbitration branch of the NLRC and the assigned arbiter ruled
in favor of Osdana. The NLRC affirmed the decision of the Labor Arbiter

Issue: Whether or not the Philippine law governs private respondents dismissal from employment.

Held: YES. Philippine law applies.

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Ratio:

The rule of lex loci contractus (law of the place where the contract is made) governs in this jurisdiction.
There is no question that the contract of employment in this case was perfected here in the Philippines. Therefore,
the Labor Code, its implementing rules and regulations, and other laws affecting labor apply in this case.
Furthermore, settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to the
forum's public policy.

VIII. Defenses to Jurisdiction and Choice of Law

Three phases of conflict of laws:

Jurisdiction
Choice of law
Recognition and enforcement of judgment
These three phases are separate from each other that a defense in one phase is not a defense in other
phases.

Hasegawa vs. Kitamura

Facts:

Petitioner Nippon Engineering Consultants Co., Ltd. (Nippon) entered into an Independent Contractor
Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines.
The agreement provided that respondent was to extend professional services to Nippon for a year starting on April 1,
1999. On February 28, 2000, petitioners general manager Kazuhiro Hasegawa, informed respondent that the
company would no longer be renewing his ICA and that his services would be utilized only until March 31, 2000.
Respondent requested a negotiation conference but Nippon insisted that his contract was for a fixed term that has
already expired.

Respondent subsequently sued petitioners for specific performance with the RTC of Lipa City. Petitioners
moved to dismiss the complaint for lack of jurisdiction, asserting that the claim for improper pre-termination of
respondents ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex
loci celebrationis and lex loci contractus. The lower court denied the motion to dismiss, a decision which was
affirmed by the CA. The CA held that the principle of lex loci celebrationis was not applicable to the case because
nowhere in the pleadings was the validity of the written agreement put in issue. The CA upheld the lower courts
application of the principles of lex loci solutionis.

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Issue: Whether or not the subject matter jurisdiction of Philippine courts in civil cases may be assailed on the
principles of lex loci celebrationis, lex loci contractus, the state of the most significant relationship rule, or forum
non conveniens.

Held: NO. They are improper grounds for questioning the jurisdiction of Philippine courts.

Ratio:

Jurisdiction and choice of law are two distinct concepts. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex
fori will often coincide, tue minimum contacts for one do not always provide the necessary significant contacts for
the other. The question of whether the law of a state can be applied to a transaction is different from the question of
whether the courts of that state have jurisdiction to enter a judgment.

In this case, only the first phase is at issue: jurisdiction. Jurisdiction over the subject matter in a judicial
proceeding is conferred by the sovereign authority which establishes and organizes the court. To succeed in its
motion for dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant must show
that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the
claims.

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly
vested by law with jurisdiction to hear the subject controversy for the civil case is one not capable of pecuniary
estimation and is properly cognizable by the RTC of Lipa City. What they rather raise as grounds to question subject
matter jurisdiction are the principles of lex loci celebrationis and lex loci contractus, and the state of the most
significant relationship rule. These three principles in conflict of laws make reference to a law applicable to a
dispute, they are rules proper for the second phase, the choice of law. They determine which states law is to be
applied in resolving the substantive issues of a conflicts problem. Necessarily, choice of law rules are not only
inapplicable but also not yet uncalled for.

IX. Conflict Rules for Special Contracts

Factual Situations Point of Contract

Sales and Barter, Lease of Property and Commodatum
Extrinsic Validity Lex Situs
Capacity of Parties Lex Situs
Intrinsic Validity Lex Situs
Lease of Services and Simple Loan or Mutuum
Extrinsic Validity Lex loci celebrationis
Capacity of Parties National Law

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Intrinsic Validity Lex loci voluntatis or the lex loci intentionis situs
Agency
Extrinsic Validity Lex loci celebrationis
Capacity of Parties to be principal or agent National Law of the parties
Intrinsic Validity Lex loci voluntatis or lex loci intettionis

EXCEPTION: LEX SITUS if agency deals with

conveyance/encumbrance of property.
Pledge, Chattel Mortgage, Real Mortgage and Antichresis
Extrinsic Validity Lex Situs
Capacity of Parties Lex Situs
Intrinsic Validity Lex Situs

NOTE: These are accessory contracts only; therefore, if

the principal contract is defective, the accessory contract
must also be deemed defective.
Guaranty and Suretyship
Extrinsic Validity Lex loci celebrationis
Capacity of Parties National Law
Intrinsic Validity Lex loci voluntatis or the lex loci intentionis

NOTE: These are also accessory contracts; if the

principal contract is defective, the accessory is also
generally defective.

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 TORT

I. What is Tort

It is a legal wrong committed upon a person or property independent of contract. In

American Law, tort covers legal wrongs not only committed through negligence but also those
committed through malice or willful intent independent of contract. It covers intentional and
unintentional wrongs. While In Spanish Law, the concept of quasi- delict or culpa aquiliana
includes all acts or ommissions committed through fault or negligence causing damage to
another independent of contract.. It covers unintentional wrongs only.

II. Concept of Tort in the Philippines

Tort under New Civil Code is a combination of Culpa aquilana and American Tort which
maybe committed not only thrugh fault or negligence but also with malice and willful intent.
Some tort provisions under the New Civil Code are:

Article 20. Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.

Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre -
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

III. Lex Loci Delicti Commissi

In general, liability for torts is governed by lex Loci Delicti Commissi or the substantive
law of the place where the delict or wrong was committed.

Reason for the Rule:

1. The state where the social disturbance occurred has the primary duty to redress the
wrong and determine the effects of the injury

2. To compensate the victim for the damage or the injury suffered.

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IV. Theories in determining Locus Delicti

a. Civil Law Theory

The locus delicti is where the act began or the place of conduct. This is premised
on the principle that the legality or illegality of a persons act should be determined by the
law of the state where he is at the time he does such act. If the actor does not conform to
the standards set by the laws of the state then he should be liable for any harm.

b. Common Law Theory

The locus delicti is the place where the wrongful act became effective or the place
of injury.

c. Theory of Dr. Rabel

The locus delicti is the place which has the most substantial connection with the
wrongful act.

Example Situs of at the radiostation where the libelous broadcast is made is the
place which is most substantial connection with the wrongful act.

V. Modern Theories

a. State of the Most Significant Relationship

The Interest-Analysis Approach

Qavers Principle of Preference

German Rule or Elective Concurrence

A.) State of the Most Significant Relationship the rights and obligations of the parties in
a case of tort is determined by the local law of the state which, with respect to the
particular issue, has the most significant relationship to the occurrence to the parties.

Case Illustrations:

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 a.) Babcock vs Jackson, 12 N.Y. 2d 473; 191 N.E. 2d. 279 (1963)
Babcock and the Spouses Jackson left New York in the car driven by Mr.
Jackson for a trip to Canada. While traveling in Ontario, Canada, Mr.
Jackson lost control of the car and Babcock was badly hurt. It was held
that all the dominant contacts and factors connected to the accident were
in New York: the parties residents, where the guest-host relationship
started, where the trip was to end, and where the car used was registered,
licensed, and insured.

b.) Saudi Arabian Airlines vs C.A. 297 SCRA 469 (1998)

The Supreme Court held that the law of the Philippines should apply
because: it was in the Philippines that respondent deceived plaintiff,
plaintiff was working for respondent in the country, the nationality and
domicile of plaintiff is in the country.

B.) The Interest-Analysis Approach considers the relevant concerns and interests that
two or more states may have in the case. The State which has the more relevant and
weighty interests in the case should be considered the locus delicti.

C.) Qavers Principle of Preference - A higher standard of conduct and financial protection
given to the injured party by one State is applied by the State where the injury happened, if
the latter State adopts a lower standard of conduct and financial protection to the injured.

Case Illustration:

a.) Schmidt vs. Driscoll Hotel, 249 Minn, 376, N.W. 2nd 365 (1947)
T, a passenger in the car driven by X in an intoxicated state by reason of a
liquor sold to him in the State of Minnesota, was hurt in an accident in the
State of Wisconsin.
T sued X for tort in Minnesota but X moved to dismiss on the ground that the
accident happened in Wisconsin. It has been held that Xs wrongful conduct

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 was completed within Minnesota where X became intoxicated. Further, both
parties are resident of Minnesota whose law demanded a higher standard of
conduct than that of Wisconsin.

D.) German Rule or Elective Concurrence - Injured party may choose to sue either the law
of:

i.) the place where the actor emerges in his tortious conducts; or

ii.) the place where the effects of his conduct occurs.

VI. Rules on Maritime Torts

1.) Aboard a public vessel, whether on high seas or in foreign territorial waters, the law of
the flag is the lex loci delicti commisii.
2.) Aboard a private or merchant vessel on the high seas, the law of registry is the lex loci
delicti comisii.
3.) Two vessels from the same state collide, the law of registry is the lex loci delicti comisii.
4.) Two vessels from different state with identical laws collide, apply identical laws.
5.) Two vessels from different state with different laws collide, the general maritime law as
understood and applied by the forum where the case is filed is the lex loci delicti comisii.

VII. Foreign Tort Claims

A tortious liability is transitory which means that the liability resulting from the conduct
is deemed personal to the perpetrator of the wrong, following him wherever he may go, so that
compensations may be exacted from him in any proper tribunal which may obtain jurisdiction of
the defendants person, the right to sue not being confined to the place where the cause of action
arises.Thus, it can be deduced that an action for a foreign tort may be brought in any place
where the tortfeasor may be found so that he can be subjected to the jurisdiction of the Court.

Even tort suits for trespass to real and personal property in foreign countries may properly be
entertained in the Philippines, since the primary concern is the recovery of damages and not the

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ownership, title, or of the encumbering of the property involved. If any question of the title is
involved, such will only be incidental to the real issue the commission of the alleged wrong.

If the defendant is personally served by the summons of our tribunals or if he voluntary appears
in court even without such service, our courts may validly decide the case, applying the proper
lex loci commissii.

As stated above, generally, a suit to recover on a foreign tort is cognizable in any state
where jurisdiction may be acquired over the person of the defendant. This is in contrast to the
law on contracts where the jurisdiction of the forum court is usually based on the consent of the
parties, the defendant in a transitional tort is often sued in a foreign court against his will.

In the US case Hilao vs Estate of Ferdinand Marcos, a class-action suit after a trifurcated
jury trial on the damage claims brought by a class of Philippine nationals (collectively referred to
as Hilao) before the US district courts who were victims of torture, disappearance, or
summary execution under the regime of Ferdinand E. Marcos, it was held that the officials acting
beyond their capacity may be held liable for damages in tort suit filed against them in the United
States for acts of torture committed against political detainees or prisoners in the Philippines, in
violation of international and municipal law (in accordance with the Alien Tort Claims Act).

Concerning products liability, in a US case (Asahi Metal Industry Co. vs Superior Court of
California), it was however held by the US Supreme Court that the California Court did not have
jurisdiction over a damage suit filed by a motorcycle driver for injuries suffered due to defects of
the vehicle against a Taiwanese Manufacturer, wherein the latter also filed a cross-complaint
against the Japanese Manufacturer of their tire valves:

Asahi does not do business in California. It has no office, no agents, employees, or

property in California. It does not advertise nor otherwise solicit business in California
Considering the international context, the heavy burden on the alien defendant, and the
slight interests of the plaintiff and the forum State, the exercise of personal jurisdiction by a
California Court over Asahi in this instance would be unreasonable and unfair.

VIII. Conditions for the enforcement of Tort Claims

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 1. The foreign tort is based on a civil action and not on a crime;
2. The enforcement of the tort would not infringe the public policy of the forum; and
3. The judicial machinery of the forum is adequate for its proper enforcement

IX. Alien Tort Act of the United States

Grants US Courts original jurisdiction over any civil action filed by an alien for a tort
committed in violation of law of nations/ treaty of the US.The duty to protect the aliens from tort
can be traced to its perception that compliance with the law of nations was a fundamental
concomitant of Nationhood and the nations obligation to comply with a particular legal duty
was supplemented by a moral duty (Burley, The Alien Tort Statute and the Judiciary Act of
1789).Compliance with such duty was for its own interests, namely the stability of commercial
relations and national security and fulfillment of a more significant purpose of recognizing the
obligation of every state of the law of nations as a means to avert war and chaos.

Trajano vs. Matcos-Manotoc

Trajano, then a 21-year-old student at the Mapua Institute of Technology, had stood up in
an open forum on August 1977 to question the eldest daughter of the late dictator Ferdinand
Marcos on her capability to lead the youth. The nation was then under martial law and headed
the national youth organization Kabataang Barangay and was at the Pamantasan ng Lungsod ng
Maynila where she addressed thousands of students. Trajano told Marcos that she would not
have assumed a leadership position if she was not the presidential daughter. He also questioned
her on her father's role in human rights violations. On Sept. 2, 1977, the bloodied body of
Trajano due to torture was found on the streets of Manila . His mother sued Marcos before the
US district court in Honolulu, Hawaii, on March 20, 1986, barely a month after the Marcos
family fled the country following the EDSA people power that year.

Trajanos Contention/ Ruling

Trajano, on the other hand, argues that the FSIA does not immunize acts of individuals which
are outside the scope of their official duties, and that the acts of torture and arbitrary killing (which
the complaint avers occurred under Marcos-Manotoc's own authority) cannot be "official acts" within
whatever authority Marcos-Manotoc was given by the Republic of the Philippines.

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 There is no doubt, as the district court found, that causing Trajano's death was wrongful, and
is a tort. Nor, in view of Marcos-Manotoc's default, is there any dispute that Trajano's death was
caused by torture. And, as we have recently held, "it would be unthinkable to conclude other than
that acts of official torture violate customary international law." We believe, therefore, that Trajano's
suit as an alien for the tort of wrongful death, committed by military intelligence officials through
torture prohibited by the law of nations, is within the jurisdictional grant of 1350.

The district courts shall have original jurisdiction of any civil action by an alien for a tort only,
committed in violation of the law of nations or a treaty of the United States.

We are constrained by what 1350 shows on its face: no limitations as to the citizenship of
the defendant, or the locus of the injury. Nor do these acts by the Senate and the Department of
Justice support Marcos Manotoc's argument that general principles of international law may not
provide a basis for federal court jurisdiction under 1350. Regardless of the extent to which other
principles may appropriately be relied upon, the prohibition against official torture "carries with it the
force of a jus cogens norm," which" 'enjoy[s] the highest status within international law.' " Siderman,
965 F.2d at 715, 717 (quoting Committee of U.S. Citizens Living in Nicaragua v.Reagan, 859 F.2d
929, 940 (D.C.Cir.1988)). As our survey of the scholarly and judicial opinion in Siderman reflects,
there is widespread agreement on this; "all states believe [torture] is wrong, all that engage in torture
deny it, and no state claims a sovereign right to torture its own citizens. Under international law, any
state that engages in official torture violates jus cogens." Siderman at
We therefore conclude that the district court did not err in founding jurisdiction on a
violation of the jus cogens norm prohibiting official torture.

The US Court of Appeals, Ninth Circuit, rendered a verdict affirming the ruling of the
Hawaii District Court: $236,000 for lost earnings to the estate of Archimedes Trajano, $175,000
for moral damages, including physical suffering, mental anguish, fright, bodily injury and
wrongful death. It also awarded Trajanos mother $1.25 million for mental anguish and another
$2.5 million in punitive damages.
*However upon enforcement of the foreign judgment of the class action suit filed by
Hilao et.al. in the Philippines, in a recent decision of the 12th division of the Court of Appeals,
the Court held that the decision by the Hawaii district court was not binding as it did not have
jurisdiction over the class suit docketed as Class Action No. MDL 840 that included unnamed

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claimants. The court explained that a class suit should mean that the parties who file the case
both for themselves and those they seek to represent share a common legal interest that is, the
subject of the suit over which there exists a cause of action is common to all persons who belong
to the group. Such classification of the claimants, according to the CA, is an obvious
recognition that no common question of law and fact exists between/among the claimants. In
other words, each claimant in MDL 840 had a right, if any, only to the damage that such
individual may have suffered, and not one of them had any right to or can claim any interest in
the damage or injury which another suffered. Hence, MDL 840 was not and should not have
been brought as a class suit.
In addition, in the case of Manotoc v. Court of Appeals, G.R. No. 130974, [August 16,
2006], 530 PHIL 454-477) concerning the enforcement of the abovementioned foreign judgment,
it has been held that Respondent Trajano failed to demonstrate that there was strict compliance
with the requirements of the then Section 8, Rule 14 (now Section 7, Rule 14 of the 1997 Rules of
Civil Procedure). Due to non-compliance with the prerequisites for valid substituted service, the
proceedings held before the trial court perforce has been annulled.

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 ENFORCEMENT OF FOREIGN JUDGMENTS
INTRODUCTION

REASONS FOR CONFLICT OF LAWS

Jorge Coquia said..

In the exercise of sovereignty, each state promulgates its own laws and develops its own jurisprudence to
govern relations of individuals and juridical entities within its municipal sphere. Some states may have similar
laws, but, due to the influence of religion, culture, and customs, these laws may be interpreted and applied
differently.

The division of the world into many territorial units, each imposing its own set of laws, and the occurrence of
events that contain elements significant to more than one legal system give rise to problems that conflict of laws
or private international law seeks to solve.

US Restatement of the Law, Second, Conflict of Laws provided

The world is composed of territorial states having separate and different systems of law. Events and
transactions occur, and issues arise, that may have a significant relationship to more than one state, making
necessary a special body of rules and methods for their ordering and resolution.

BASIS OF CONFLICTS OF LAW : COMITY OF NATIONS

Comity, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere
courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory
to the legislative, executive, or judicial acts of another nation, having due regard both to international duty
and convenience, and to the rights of its own citizens or of other persons who are under the protection of its
lawsxxx (Hilton v. Guyot, 159 US 113 (1895))

DEFINITION: PRIVATE INTERNATIONAL LAW / CONFLICT OF LAWS

It is that part of municipal law which governs cases involving a foreign element (Droit International
Prime)

Those universal principles of right and justice which govern the courts of one state having before
them cases involving the operation and effect of laws of another state or country (R.C Minor, Conflict of
Laws (1901)

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 That part of law which comes into play when the issue before the court affects some fact or event, or
transaction that is so closely connected with a foreign system of law as to necessitate recourse to that
system. (G.C Chesire, Private international law (1947)

That part of the law of each state or nation which determines whether, in dealing with a legal
situation, the law or some other state or nation will be recognized, given effect , or applied. ( Second
Edition of American Jurisprudence)

Inconsistency or difference between the laws of different state countries, arising in the case of persons
who have acquired rights, incurred obligations, injuries or damages, or made contracts, within the territory
of two or more jurisdictions. Hence, that branch of jurisprudence, arising from the diversity of the laws of
different nations, states or jurisdictions, in their application to rights and remedies, which reconciles the
inconsistency; or decides which law or system is to govern in the particular case, or settles the degree of
force to be accorded to the law of another jurisdiction, (the acts or rights in question having arisen under it )
either where the domestic law is silent or not exclusively applicable to the case in point. (Blacks Law
Dictionary, Fifth Ed. P. 271)

Conflicts of Laws is in reality a part of the subject of international law, which is commonly divided
into two aspects, public and private. Public International Law, or the law of nations, is that which regulates
the political intercourse of nations with each other or concerns questions of rights between nations, whereas
private international law, or conflicts of laws, is that which regulates the comity of states in giving effect in
one to the municipal laws of another relating to private persons, or concerns the right of persons within the
territory and dominion of one state of nations, by reason of acts, private or public, done within the
dominion of another, and which is based on the broad general principle that one country will respect and
give effect to the the laws of another so far as can be done consistently with its own interests. Sec. 1

DEFINITION: OTHER TERMS INTRODUCTORY TO THE STUDY OF CONFLICT OF LAWS

1. Foreign Element - A factual situation that cuts across territorial lines and is thus affected by the diverse
laws of two or more states. The presence of a foreign element or elements in human activities may require
the application of conflict of law rules in a given case. In cases filed in the Philippines, the foreign element
may consist of:

a. A Philippine citizen or resident of the country, in relation to a foreign national or entity or

to acts done or events that occurred in a foreign country or property situated therein;
b. Property located in the Philippines or acts done or events that took place in the
Philippines involving a foreign national or entity and a citizen of the country.

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2. Lex Situs The applicable law regarding the acquisition, transfer and devolution of the title to property is
the law where the property is located. This rule may be invoked where there is conflict of laws situation,
involving real property, such as :

a. There is dispute over the title or ownership of an immovable, such that the capacity to
take and transfer immovable, the formalities of conveyance, the essential validity and
effect of conveyance, are to be determined; and
b. A foreign law on land ownership and its conveyance is asserted to conflict with a
domestic law on the same matters. Hence the need to determine which law would apply.

3. Lex fori The law of the forum, where the case is filed. The term is used in contract of denoting the law of
the place where a transaction took place or where the wrong causing damage or injury occurred.

4. Lex loci actus - The law of the place where the act was done.

5. Lex loci contractus - The proper law applicable in deciding upon the rights and liabilities of the contracting
parties. This law would also decide such matters as the essential validity of the contract. The test to
determine the proper law of the contract would appear to be the system of law with which the transaction
has the closest and most real connection.

6. Lex loci delictus - The law of the place where the offense or wrong took place.

7. Lex loci celebrationis - The law of the place where a contract is entered into.

8. Lex loci domicilii The law of the place of domicile of a person

9. Lex loci rei sitae; lex situs - The law of the place where a thing is situated. In actions relating to recovery of
land, the rule is that the action is governed by the law of the place where the land is located.

10. Kilberg doctrine - In conflict of laws, it is a rule to the effect that the forum is not bound by the law of the
place of injury or death as to the limitation on damages for wrongful act because such rule is procedural
and hence the law of the forum governs on this issue.

11. Most Significant Relationship Doctrine/ Center of Gravity doctrine/ Grouping of Contacts - Choice of law
problems in conflict of laws are resolved by the application of the law of the jurisdiction which has the
most significant relationship to or contact with event and parties to litigation and the issue therein.

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12. Borrowing Statute is a statute which directs the court of the forum to apply the foreign statute to the
pending claims based on foreign law.

13. Doctrine of Forum non conveniens This Latin phrase literally means that jurisdiction should be declined
because the forum is inconvenient. It means that Even if the court assumes jurisdiction over the person
and the subject matter, it may decline to try the case on the ground that the controversy may be more
suitably tried elsewhere.

14. Long Arm statutes - These statutes specify the kinds of contacts upon which jurisdiction will be asserted

15. Renvoi doctrine/ Table tennis theory- is a doctrine under which court in resorting to foreign law adopts
rules of foreign country as to conflict of law, which rule may in turn refer to back to law of the forum.

16. German Rule of elective concurrence Pursuant to this rule, tort is committed in both the place of where
the actor engages in his conduct and the place where the effects of such conduct, such as the injury against
the injured person, may occur.

17. State- interest analysis In applying which law applies, the court takes into account the interest of the
state in issue, not only as a sovereign in a set of facts or an entity but as a repository of justice. Ultimately,
the choice of law will depend as to whether assuming jurisdiction will advance the interest of the state.

18. Cavers principle When there is no conflict of law rules in the forum, the court applies general principles
to arrive at just solutions by accommodating conflicting policies and affording fair treatment of the parties
caught in the conflict between state policies.

THREE DISTINCT BUT INTERRELATED ISSUES IN CONFLICT OF LAW

A. Issue of Adjudicatory Jurisdiction which determines the circumstances that allow for a legal
order to impose upon its judiciary the task of deciding multi-state and multinational disputes.

B. Issue of Choice-of-Law which refers to the probable sources from which the applicable law of
the controversy may be derived.

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 C. Recognition and Enforcement of Foreign Judgments. This deals with the study of situations
which justify recognition by the forum court of a judgment rendered by a foreign court or the enforcement
of such within the forum.

II. JURISDICTION

In conflict of laws, jurisdiction can either be LEGISLATIVE jurisdiction or JUDICIAL jurisdiction.

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

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

FOUR MAJOR QUESTIONS TO BE CONSIDERED IN ANALYZING A CONFLICT OF LAWS SITUATION/

PROBLEM:

1) Has the court jurisdiction over the person of the defendant or over his property?;
2) Has the court jurisdiction over the subject matter, usually referred to as competency?;
3) Has the suit been brought in the proper venue in cases where a foreign element is involved? and
4) Is there a statute or doctrine under which a court otherwise qualified to try the case may or may not
refuse to entertain it?

BASIS OF THE EXERCISE OF JUDICIAL JURISDICTION

a) Jurisdiction over the person which is based on forum-defendant contacts;

b) Jurisdiction over the res based on forum-property contacts; and
c) Jurisdiction over the subject- matter

NOTES:

In the absence of jurisdictional basis, a court should not try a case. In the event that it does, its
judgment will not be considered valid.

The requirement that a state must show that there are minimum contacts between the non-
resident defendant/ property and the forum to justify its exercise of jurisdiction has led many
states to legislate long-arm statutes. These statutes specify the kinds of contacts upon which

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 jurisdiction will be asserted, such as the commission of a tortuous act within the state, the
celebration of a contract there or presence of property owned by the defendant. Moreover, if
these or other minimum contacts exist, then the court can exercise jurisdiction because it has
justified interest in providing the plaintiff with a forum, and no fundamental unfairness results in
subjecting the defendant to a suit there.

FOUR WAYS OF DEALING WITH A CONFLICT OF LAWS SITUATION

The Court may either:

a) Dismiss the case for lack of jurisdiction or on ground of forum non conveniens
b) Assume jurisdiction and apply domestic/ forum laws (LEX FORI)
c) Assume jurisdiction and apply foreign laws (LEX CAUSAE)
d) Renvoi Doctrine

NOTES:

Doctrine of Forum non conveniens This Latin phrase literally means that jurisdiction should
be declined because the forum is inconvenient. It means that Even if the court assumes
jurisdiction over the person and the subject matter, it may decline to try the case on the ground
that the controversy may be more suitably tried elsewhere.

The reason for forum non conveniens is to avoid global forum shopping, which is the filing of
repetitious suits in courts of different jurisdictions.

In the case of First Philippine International Bank v. Court of Appeals, the Supreme Court
addressed the issue: . . . forum shopping originated as a concept in Private International Law,
where non-resident litigants are given the option to choose the forum or place wherein to bring
their suit for various reasons or excuses, including to secure procedural advantages, to annoy
and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. To
combat these less than honorable excuses, the principle of forum non conveniens was developed
whereby a court in conflict of laws cases, may refuse impositions on its jurisdiction where it is
not the most convenient or available forum and the parties are not precluded from seeking
remedies elsewhere.

The Philippine Supreme Court in Wing On Company v. Syyap ( 64 OG 8311 (1967) held that
the plaintiffs choice of forum should not be disturbed unless the balance is strongly in favor of
the defendant.

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 In Manila Hotel Corp and Manila Hotel Intl. LTD. V. NLRC, Arb. Ceferina J. Diosana and
Marcelo G. Santos, the Court held that: Under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided: 1. That
the Philippine court is one to which the parties may conveniently resort to; 2. That the
Philippine court is in a position to make an intelligent decision as to the law and the facts; and 3.
That the Philippine court has or is likely to have power to enforce its decisions.

If the court chooses to assume jurisdiction, it can either apply lex fori (law of the forum) or lex
causae (system of foreign laws applicable to a dispute).

The presence of ANY one of the following factors would justify the application of domestic/
forum law or LEX FORI:

a) A specific law of the forum decrees that internal law should apply;
b) The proper foreign law was not properly pleaded or proved; or
c) The case falls under any of the exceptions to the application of foreign law. These
exceptions are:

1. When the foreign law is contrary to an important public policy of the forum or
contravenes prohibitive law;
Art. 17 (3), NCC provides: 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.
Public order represents in the law of persons, the public, social, and legal interest,
that which is permanent and essential to the institutions, that which, even in
favoring an individual in whom the right lies, cannot be left to his own will. Public
order is not as broad as public policy, as the latter may refer not only to public
safety but also to considerations which are moved by the common good (Phil.
Bank of Communications v. Echiveri, 99 SCRA 508 (1980)
In the absence of express legislation or constitutional prohibition, a court, in order
to declare a contract void as against a public policy, must find that the contract as
to the consideration or thing to be done, has a tendency to injure the public, is
against the public good, or contravenes some established interests of society, or is
inconsistent with sound policy and good morals, or tends to clearly undermine the
security of individual rights, whether of personal liability or of private property.

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 When there is a conflict between a foreign law and Philippine law, the former must
yield to the latter (Bank of America v. American Realty Corp, 321 SCRA 659
(1999).

2. When the foreign law is penal in nature;

As a rule penal laws of one country are obligatory only within its jurisdiction.
Foreign penal laws have no extraterritorial application in the Philippines.
There are exceptions to the rule, as when the local law adopts the penal law of
other countries as part thereof, such as penal laws of other states as basis for the
prosecution of persons for violation of money laundering law or in the extradition
of persons for prosecution of crimes to the requesting country pursuant to a treaty
of extradition.

3. When the foreign law is procedural in nature;

Even when a foreign law is the applicable law in a given conflict of laws case, its
application is limited only to substantive law which is the basis of the cause of
action, and does not extend to procedural law.
It is settled that all matters respecting a remedy, such as the bringing of suit,
admissibility of evidence, and statute of limitations, depend upon the law of the
place where the suit is brought.
The parties cannot, by entering into an agreement, change the procedure prescribed
by the law of the forum. Matters of procedure are important, the observance of
which is of public interest, as they form part of the procedural due process. They
cannot be rendered ineffective by determinations or conventions agreed upon in a
foreign country.
If the rule creates a right, or takes away a right, it is substantive. But if it operates
as a means of implementing existing right, then it is procedural.

4. When the foreign law is purely fiscal or administrative in nature;

5. When the application of the foreign law will work undeniable injustice to the citizens of
the forum;

6. When the case involves real or personal property situated in the forum;
Art. 16, NCC provides that Real property as well as personal property is subject
of the law of the country where it is situated. This provision embodies the rule of
lex loci or lex loci rei sitae.

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 In view of this provision, any foreign law sought to be applied in a conflict of
laws case in the contry contrary thereto may not be enforced.
The situs of real property is fixed and irremovable, which is the place where it is
situated. On the other hand, personal property may be transferred or removed from
one country to another by its owner, except certain personal property which the
law considers it as having a fixed situs, such as shares of stock which have their
situs in the country where the corporation which issued them is domiciled or
incorporated.

7. When the application of the foreign law might endanger the vital interest of the state; or

8. When the foreign law is contrary to good moral.

As opposed to lex fori, LEX CAUSAE or foreign law or one duly enacted in another country may be
given territorial effect and application in the resolution of a case involving foreign elements, filed in
the country, because:

1. Local law directs that it be applied in a given case, e.g. the Philippine legislature enacted
Com. Act 1936, making the US Carriage of Goods by Sea Act applicable to all contracts for
the carriage of goods by sea to and from all Philippine ports in foreign trade;
2. The parties have stipulated that a specific foreign law be applied to govern in case of dispute
arising from their contract;
3. A treaty or convention to which the country has adhered requires that a foreign law be
applied; or
4. The rules of conflict of laws point to the application of a foreign law, i.e. application of a
borrowing statute.

Note that while there are cases that require the application of foreign law, it does not automatically
authorize the courts to do so. The general rule remains, that no foreign law may or should interfere
with the operation and application of Philippine laws.

Renvoi Doctrine is a doctrine under which court in resorting to foreign law adopts rules of foreign
country as to conflict of law, which rule may in turn refer to back to law of the forum.

It is sometimes called the table tennis theory, as the law is being referred back and
forth from the forum law to the law of domicile of the foreign party which includes a
conflict of laws rule, pointing back to the forum law as applicable law.

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 This should be avoided by the forum court limiting the referring back to only one
instance and applying its own law.

The problem on renvoi arises when there is doubt as to whether the reference by the lex
fori to the foreign law involves reference to the internal law of the foreign law or a
reference to the entirety of the foreign law, including its conflicts rules.

An example of a renvoi problem was the case of Aznar v. Garcia where a California
citizen who resided in our country for 50 yrs dies here. The Supreme Court was faced
with a problem of whether to apply a California law which provides that the law of the
domicile of its deceased citizen should apply or our Civil Code which provides that the
national law of the deceased should be applied in succession cases. In this particular case,
the SC applied the Philippine law. (PING-PONG)

Double Renvoi, on the other hand occurs when the local court, in adopting the foreign court theory,
discovers that the foreign court accepts the renvoi. But since the foreign law remits the case to
Philippine law, being the law of deceaseds domicile, the foreign court may discover that Philippine
law does not accept the remission as it applies the national law of the deceased, so the foreign court,
sitting as Philippine court, would still apply its own internal law. This is then what our court will
apply. (PING-PONG-PING)

Transmission, on the other hand, is the process of applying the law of a foreign state thru the law of a
second foreign state. Here, it involves three laws, unlike in renvoi, which only involves two laws.

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 CHOICE OF LAW
INTRODUCTION

When parties enter into an agreement, their relationship is usually governed by a particular law. The default
law is almost always the local law since the minds of the parties are set on the local law upon entering into the
agreement. This is especially true in cases when there is no foreign element involved.

There are instances, however, when this is not the case, as when the parties stipulate a foreign law to
1
govern their relationship. Parties are free to stipulate their choice of law that will govern their relationship.

In the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice
of law and recognition and enforcement of foreign judgments. Corresponding to these phases are the following
questions: (1) Where can or should the litigation be initiated? (2) Which law will the court apply? (3) Where can the
resulting judgment be enforced? 2

What is Choice of Law?

By choice of law, the most trying of the areas of private international law, the law deals with the problem
that arises when two or more states have a connection to cases about which their respective laws differ. Each court
must then choose which laws to apply based on choice of law rules that themselves rest on policy. 3

Distinction between Choice of Law and Jurisdiction

Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a
defendant to travel to this state while choice of law asks the further question whether the application of a substantive
law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law. The question of whether the law of a state can
be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter
a judgment. 4

Distinction between Internal Rules and Conflict Rules

Internal Rules are provisions of law that set forth rights or exact obligations. The provision of the Civil
Code for example on adverse possession is one such internal rule as is the rule that one must be at least eighteen to
contract marriage validly.

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 Conflict rules are rules that consider the involvement of a foreign element. They are provisions of law that
determine the applicable law in a conflict situation. 5

What are the parts of every conflicts rule?

Unlike a purely internal rule which governs a purely domestic problem without a foreign element, a
conflicts rule which indicates whether to apply the internal law or the foreign law, has two parts which are readily
recognizable:

a) The factual situation, or the set of facts or situations presenting a conflicts problem because there is a
foreign element involved;

b) The point of contact or connecting factor, which is the law of the country with which the factual situation
is most intimately connected.

In other words, the first part raises while the second part answers or solves a legal question. 6

What is point of contact?

A point of contact or connecting factor is that which establishes a connection between the case at hand
and the laws of a foreign jurisdiction. It is therefore a prejudicial consideration in relation to choice of law. One
chooses the applicable law on the basis of the connecting factor the legislator deems most significant, in cases where
legislation is clear as to the applicable law, or which the court appreciates to be the properly applicable law. 7

These points of contact or connecting factors could be any of the following:

a) The nationality of a person, his domicile, his residence, his place of sojourn, or his origin;

b) The seat of a legal or juridical person, such as a corporation;

c) The situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex
situs is decisive when real rights are involved;

d) The place where an act has been done, the locus actus, such as the place where a contract has been made, a
marriage celebrated, a will signed or tort committed. The lex loci actus is particularly important in contracts
and torts;

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 e) The place where an act is intended to come into effect, e.g., the place of performance of contractual duties,
or the place where a power of attorney is to be exercised;

f) The intention of the contracting parties as to the law that should govern their agreement, the lex loci
intentionis;

g) The place where judicial or administrative proceedings are instituted or done. The lex fori the law of the
forum is particularly important because, matters of procedure, not going to the substance of the claim
involved, are governed by it, and because the lex fori applies whenever the content of the otherwise
applicable foreign law is excluded from application in a given case for the reason that it falls under one of
the exceptions to the applications of foreign law;

h) The flag of a ship, which in many cases is decisive of practically all legal relationships of the ship and of its
masters or owners. 8

Characterization

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts
or rules fall. This process is known as characterization or the doctrine of qualification.

Characterization, otherwise known as classification or qualification, is the process of assigning a

certain set of facts or factual situation to its proper legal category. Every rule of law is based on situations of fact,
actual or imagined, since the legislator must try to solve factual situations that might arise in the future, based on
past observation and experience. These legal categories may be family relations, contracts, torts, succession,
property, etc. By characterizing the legal problem, the court of the parties involved reach a proper solution whether
to apply the local law or the proper foreign law.

The difficulty in characterization arises from the fact that a conflicts situation or problem may be
characterized by the lex fori differently from the characterization of the lex causae (law of the state by which the act
or transaction is most closely connected). The lex fori might regard the problem as tort while the lex causae might
regard it as crime. 9

Theories that Justify the Application of the Foreign Law

a) Theory of Comity

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 According to this theory, no foreign law would be allowed to operate in another state except by the comity
of nations, i.e., the reciprocal courtesy which the members of the family of nations owe to one another. It is the
recognition which one state allows within its territory, to the legislative, executive or judicial acts of another
nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of
other persons who are under the protection of its laws. (The Philippines follow the Principle of Reciprocity)

b) Vested-rights Theory

Our courts enforce not the foreign law or foreign judgment but the right or rights that have been vested
under such law or judgment. Rights once acquired under a foreign law or judgment should be enforced
regardless of where the suit for its enforcement was filed. The exception is, if the foreign law is against the
public policy of the forum.

c) Theory of Local Law

Foreign Law is applied not because it is foreign, but because our own law by applying a similar rule
requires us to do so; hence, it is as if the foreign law has become part of our own internal or domestic law.

d) Theory of Harmony of Laws

Under this theory, identical or similar problems should be given identical or similar solutions thus resulting
in harmony of laws. Certainty of solutions to the same or similar problems are of particular importance in areas
where the parties are likely to think in advance of the legal consequences of their transactions.

e) Theory of Justice

Since the purpose of all laws, including Conflict of Laws, is the dispensation of justice, the proper foreign
law should be applied in order to attain this objective. The defect of this theory however, is that different
persons may have different ideas of what is just.

Note: These theories do not mutually exclude one another. Truth may be found in their combination (late Justice
Edgardo T. Paras) 10

Choice of Law Principles

Choice of Law is governed by several principles by virtue of Section 6 of the US Restatement (Second) of
Laws. These principles are the underlying reasons why a particular law is made to apply to a certain case.

Principle 1: Local Law

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 This is the general rule and it provides the local law to be the default law that will govern the relationship
of the parties to a dispute. When there is a specification that local laws must be applied before one even considers
the application of a foreign law, provided that these directives comply with the Constitution of the state, the
statutory directive must be followed.

The problem of renvoi. While a state has to follow its statutory directive as to choice of law, there are times
when the statutory directive, instead of applying local law, actually directs the application of a foreign law on the
matter. The foreign law, in turn, directs the application of the laws of the forum court to the case under
consideration. Thus, there is reference back to the local laws of the forum court.

To solve this problem, the local court must, after looking at the conflicts of law rules of the foreign state,
apply the directive of the latters laws. Thus, if the directive is the application of the forum courts laws, the court
must then follow this to put an end to the endless throwing back of the case.

Principle 2: Needs of the Interstate and International Systems

Technological advances and free trade have brought about numerous international commercial transactions
spawning disputes that cut across national borders. Where we apply only local laws that favor the interest of the
forum state, this would unduly stifle the growth of free trade and discourage people from trading with their
counterparts in other countries. The courts must formulate principles and reconcile multistate laws with the end view
of encouraging international trade among people.

Principle 3: Relevant Policies of the Forum

The policies of the forum take primordial consideration when considering the applicable law to a case.
Each forum considers certain values to be of highest import to them.

Principle 4: Relevant Policies of Other Interested States

When two states have conflicting laws and interests, the courts must engage in governmental interest
analysis, wherein, the courts compare the laws and interests of the two states, determines if there is a real conflict,
and if a real conflict exists, apply the law of the state whose interest is more impaired.

Note: The governmental interest analysis is rarely employed in the Philippines because the standard practice of local
courts is to declare the foreign law to be against public policy where the foreign law conflicts with a Philippine law.

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Principle 5: Protection of Justified Expectations

When the parties specify a particular law to govern their legal relations, courts must enforce this choice of
law, unless it is contrary to a statutory directive of a foreign court or contravenes public policy.

Principle 6: Basic Policies Underlying the Particular Field of Law

This simply means that the reason and objectives of the laws in question should be given consideration.
Hence, courts should look to the type of law involved. By looking at the particular laws involved, courts may be in a
better position to decide which rights to uphold and protect.

Principle 7: Certainty, Predictability, and Uniformity of Result

Most judicial systems favor stability in judicial decisions that is why they have formulated principles like
res judicata and stare decisis. In the area of torts, courts usually choose between lex loci delicti and most significant
relationship. Once they choose between either of the two, they usually follow this approach in deciding future cases
which usually becomes the applicable doctrine in the jurisdiction concerned.

Principle 8: Ease in the Determination and Application of the Law to be Applied

If a court is bound by a particular doctrine by virtue of stare decisis, it is usually simpler for the court to
apply the same doctrine in future cases. There is no more need to adopt new and more complicated analyses for what
only needs to be done is to apply the law which has been applied before.

Other Principles Affecting Choice of Law

Foreign laws have to be properly proved before they are admitted into evidence. Failure to prove foreign
law will result to the exclusion of the foreign law and a presumption will arise that foreign law is the same as local
law. This is called the Doctrine of processual presumption. Foreign documents also need to be proved before
they can be admitted into evidence; otherwise, they will be excluded and will be nothing but scraps of paper.

How are foreign documents proved in order to be admitted in evidence?

Rule 132 of the Revised Rules of Court

Sec 24. Proof of official record The record of public documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in foreign

166
country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office.

Sec 25. What attestation of copy must state Whenever a copy of a document or record is attested for the purpose of
evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part
thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or
if he be the clerk of a court having a seal, under the seal of such court.

Exceptions to Proof of Foreign Laws

1) Presentation of a foreign-licensed attorney who will testify in open court concerning her knowledge of the
law in question.
2) In case of administrative agencies recognizing foreign laws without proof thereof.
3) Lack of objection to the improper presentation by one party of proof of foreign law.
11
4) Laws appearing in official websites like those of the Office of the President or the Library of Congress.

Saudi Arabian Airlines vs. Court of Appeals

G.R. No. 122191. October 8, 1998

Facts:

Defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia.
While on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-
Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their
hotels, they agreed to have breakfast together at the room of Thamer. When they were in the room, Allah left on
some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security
personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah
Al-Gazzawi, the latter as an accomplice. Plaintiff learned that, through the intercession of the Saudi Arabian
government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually,
they were again put in service by defendant SAUDI. Saudi judge interrogated plaintiff through an interpreter about
the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was
about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service
Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain
in Jeddah, at the crew quarters, until further orders. A SAUDIA legal officer again escorted plaintiff to the same
court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing

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her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male
crew, in contravention of Islamic tradition. The Prince of Makkah dismissed the case against her and allowed her to
leave Saudi Arabia. Shortly before her return to Manila, she was terminated from the service by SAUDIA, without
her being informed of the cause. The CA ruled that the Philippines is an appropriate forum considering that the
Amended Complaints basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court.

Issue:

WON trial court has jurisdiction to hear and try case based on Article 21 of the New Civil Code?

Ruling:

The foreign element consisted in the fact that private respondent Morada is a resident Philippine national,
and that petitioner SAUDIA is a resident foreign corporation. Also, by virtue of the employment of Morada with the
petitioner Saudia as a flight stewardess, events did transpire during her many occasions of travel across national
borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, that caused a conflicts
situation to arise. The court a quo found it best to hear the case in the Philippines. It also possesses jurisdiction over
the persons of the parties herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court. As to the choice of applicable law, we
note that choice-of-law problems seek to answer two important questions: (1) What legal system should control a
given situation where some of the significant facts occurred in two or more states; and (2) to what extent should the
chosen legal system regulate the situation.

Before a choice can be made, it is necessary for us to determine under what category a certain set of facts
or rules fall. This process is known as characterization, or the doctrine of qualification. It is the process of deciding
whether or not the facts relate to the kind of question specified in a conflicts rule. Our starting point of analysis here
is not a legal relation, but a factual situation, event, or operative fact. An essential element of conflict rules is the
indication of a test or connecting factor or point of contact. Choice-of-law rules invariably consist of a factual
relationship (such as property right, contract claim) and a connecting factor or point of contact, such as the situs of
the res, the place of celebration, the place of performance, or the place of wrongdoing. In the case, the place where
an act has been done, the locus actus, such as the place where a contract has been made, a marriage celebrated, a will
signed or a tort committed, is the connecting factor. Applying the torts principle in a conflicts case, we find that the
Philippines could be said as a situs of the tort (the place where the alleged tortious conduct took place). In applying
said principle to determine the State which has the most significant relationship, the following contacts are to be

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taken into account and evaluated according to their relative importance with respect to the particular issue: (a) the
place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile,
residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the
relationship, if any, between the parties is centered.

Since the Philippines is the situs of the tort complaint of and the place having the most interest in the
problem, we find, by way of recapitulation, that the Philippine law on tort liability should have paramount
application to and control in the resolution of the legal issues arising out of this case.

Hazegawa vs. Kitamura

G.R. No. 149177 November 23, 2007

Facts:

Petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm
providing technical and management support in the infrastructure projects of foreign governments, entered into an
Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently
residing in the Philippines. The agreement provides that respondent was to extend professional services to Nippon
for a year starting on April 1, 1999. Nippon then assigned respondent to work as the project manager of the Southern
Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the
Philippine Government. When the STAR Project was near completion, the Department of Public Works and
Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Respondent
was named as the project manager. Petitioner Kazuhiro Hasegawa, Nippon's general manager for its International
Division, informed respondent that the company had no more intention of automatically renewing his ICA. His
services would be engaged by the company only up to the substantial completion of the STAR Project only.
Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and
demanded that he be assigned to the BBRI project. Nippon insisted that respondents contract was for a fixed term
that had already expired, and refused to negotiate for the renewal of the ICA. As he was not able to generate a
positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for
specific performance and damages with the Regional Trial Court of Lipa City. RTC ruled that matters connected
with the performance of contracts are regulated by the law prevailing at the place of performance. The CA ruled,
among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere in the
pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court was correct
in applying instead the principle of lex loci solutionis.

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Issue:

WON the subject matter jurisdiction of Philippine courts in civil cases for specific performance and
damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of
lex loci celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens.

Ruling:

In the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice
of law, and recognition and enforcement of judgments. Corresponding to these phases are the following questions:
(1) Where can or should litigation be initiated? (2) Which law will the court apply? (3) Where can the resulting
judgment be enforced? Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers
whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the
application of a substantive law which will determine the merits of the case is fair to both parties. The power to
exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide
the necessary significant contacts for the other. The question of whether the law of a state can be applied to a
transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.
What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis
and lex contractus, and the state of the most significant relationship rule.

The Court finds the invocation of these grounds unsound. Lex loci celebrationis relates to the law of the
place of the ceremony or the law of the place where a contract is made. The doctrine of lex contractus or lex loci
contractus means the law of the place where a contract is executed or to be performed. It controls the nature,
construction, and validity of the contract and it may pertain to the law voluntarily agreed upon by the parties or the
law intended by them either expressly or implicitly. Under the state of the most significant relationship rule, to
ascertain what state law to apply to a dispute, the court should determine which state has the most substantial
connection to the occurrence and the parties. In a case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of
incorporation of the parties. This rule takes into account several contacts and evaluates them according to their
relative importance with respect to the particular issue to be resolved. Since these three principles in conflict of laws
make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law. They
determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as
the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called
for. Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet
pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first there
should exist a conflict of laws situation requiring the application of the conflict of laws rules. Also, when the law of
a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be

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pleaded and proved. Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of
its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules
of Court does not include it as a ground. Second, whether a suit should be entertained or dismissed on the basis of
the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the
trial court. In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on
this principle requires a factual determination; hence, this conflicts principle is more properly considered a matter of
defense.

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate
courts correctly denied the petitioners motion to dismiss.

RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS AND FOREIGN ARBITRAL

AWARDS

INTRODUCTION

RECOGNITION is a remedy at law which gives a foreign judgment or arbitral award the same effect that it
has in the state where it was rendered or awarded, with respect to the parties, subject matter, and issues involved.
Typically raised as a defense, it is availed of to extend the res judicata effect of a foreign judgment, i.e., to bar
repeated litigation of the same case.

ENFORCEMENT is a remedy to make effective a foreign judgment or arbitral award; in other words, to
enable the prevailing party to obtain the affirmative relief to which he is entitled because of the pronouncement.

Recognition of a foreign judgment does not necessarily imply enforcement, but enforcement always
implies recognition. As to arbitral awards, recognition and enforcement are always sought together.

FOREIGN JUDGMENTS

The recognition and enforcement of foreign judgments is governed by the principle of qualified
recognition, meaning that a foreign judgment will be recognized only if not repelled through the means provided by
law.

Requisites For Recognition and Enforcement

1. Judgment must have been a final adjudication on a civil or commercial matter, not a criminal, administrative, or
revenue matter

2. Judgment must not be contrary to public policy

3. Tribunal that rendered judgment must have been one of competent jurisdiction

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4. There must have been no lack of notice, no collusion, no fraud, nor clear mistakes of fact or law

5. There must be adequate proof of the foreign judgment

Defenses Against Recognition and Enforcement

1. Rules of Court Rule 39 Section 48: The judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

a. Jurisdiction over subject matter. The authority of the court to render the decision must be
affirmatively shown by competent proof. Mere recital of jurisdictional facts is insufficient. The prevailing view is
that although such judgments are presumed valid, local courts are not precluded from inquiring into the foreign
courts jurisdiction.

b. Jurisdiction over the person. This requirement involves simply giving both parties reasonable notice
and opportunity to be heard. Since judgments are presumed valid, and since lex fori governs procedural law, the
burden of proving that jurisdiction was not properly acquired is shouldered by the party raising this defense. In
general, however, our Supreme Court only refuses recognition and enforcement for complete lack of due process.

c. Fraud. It is extrinsic fraud which may be raised as a defense, because it concerns fraud (i) on facts that
were not controverted or resolved in the case where judgment was rendered, (ii) which would go to the jurisdiction
of the court, or (iii) which would deprive the defending party of arguing a meritorious defense. Intrinsic fraud goes
to the very existence of the cause of action --- but since it is a matter already adjudged, it cannot be a defense to not
recognize or enforce the judgment.

2. Rules of Court Rule 132 Section 29: Any judicial record may be impeached by evidence of: (a) want of
jurisdiction in the court or judicial officer, (b) collusion between the parties, or (c) fraud in the party offering the
record, in respect to the proceedings.

3. Tribunal pronouncing judgment was not a judicial or quasi-judicial agency

4. Judgment was not on the merits

5. Judgment was not on a civil or commercial matter

6. What is sought to be recognized or enforced is a mere provisional or interlocutory decree

7. Claim subject of the judgment is one which is contrary to public policy, or which does not fix a sum certain

Effect of Foreign Judgment

As provided in Rules of Court Rule 39 Section 48,

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1. In case of a judgment or final order upon a specific thing, the judgment or final order, is conclusive upon the title
to the thing. This pertains to judgments in rem. Because they are conclusive as to the question of title, a defendant
can only raise defenses concerning the judgment.

2. In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a
right as between the parties and their successors in interest by a subsequent title. This pertains to judgments in
personam. The ruling is only presumptive evidence, and is thus not conclusive. A party can even question the right
granted.]

Rule 108 of the Rules of Court sets forth the rules on cancellation or correction of entries in the civil registry, to wit:

SEC. 1. Who may file petition. Any person interested in any act, event, order or decree concerning the
civil status of persons which has been recorded in the civil register, may file a verified petition for the
cancellation or correction of any entry relating thereto, with the Regional Trial Court of the province where
the corresponding civil registry is located.

SEC. 2. Entries subject to cancellation or correction. Upon good and valid grounds, the following entries
in the civil register may be cancelled or corrected: (a) births; (b) marriages; (c) deaths; (d) legal separations;
(e) judgments of annulments of marriage; (f) judgments declaring marriages void from the beginning; (g)
legitimations; (h) adoptions; (i) acknowledgments of natural children; (j) naturalization; (k) election, loss or
recovery of citizenship; (l) civil interdiction; (m) judicial determination of filiation; (n) voluntary
emancipation of a minor; and (o) changes of name.

SEC. 3. Parties. When cancellation or correction of an entry in the civil register is sought, the civil
registrar and all persons who have or claim any interest which would be affected thereby shall be made
parties to the proceeding.

SEC. 4. Notice and Publication. Upon the filing of the petition, the court shall, by an order, fix the time
and place for the hearing of the same, and cause reasonable notice thereof to be given to the persons named
in the petition. The court shall also cause the order to be published once a week for three (3) consecutive
weeks in a newspaper of general circulation in the province.

SEC. 5. Opposition. The civil registrar and any person having or claiming any interest under the entry
whose cancellation or correction is sought may, within fifteen (15) days from notice of the petition, or from
the last date of publication of such notice, file his opposition thereto.

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 SEC. 6. Expediting proceedings. The court in which the proceedings is brought may make orders
expediting the proceedings, and may also grant preliminary injunction for the preservation of the rights of
the parties pending such proceedings.

SEC. 7. Order. After hearing, the court may either dismiss the petition or issue an order granting the
cancellation or correction prayed for. In either case, a certified copy of the judgment shall be served upon
the civil registrar concerned who shall annotate the same in his record.

Rule 108 of the Rules of Court provides the procedure for cancellation or correction of entries in the civil
registry. The proceedings may either be summary or adversary. If the correction is clerical, then the procedure to be
adopted is summary. If the rectification affects the civil status, citizenship or nationality of a party, it is deemed
substantial, and the procedure to be adopted is adversary. Since the promulgation of Republic v. Valencia 19 in 1986,
the Court has repeatedly ruled that "even substantial errors in a civil registry may be corrected through a petition
filed under Rule 108, with the true facts established and the parties aggrieved by the error availing themselves of the
appropriate adversarial proceeding." 20 An appropriate adversary suit or proceeding is one where the trial court has
conducted proceedings where all relevant facts have been fully and properly developed, where opposing counsel
have been given opportunity to demolish the opposite partys case, and where the evidence has been thoroughly
weighed and considered.

Illustrative Cases:

Fujiki v Marinay

FACTS:

Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz Galela Marinay
(Marinay) in the Philippines on 23 January 2004. The marriage did not sit well with petitioners parents. Thus,
Fujiki could not bring his wife to Japan where he resides. Eventually, they lost contact with each other.

In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first marriage being dissolved,
Marinay and Maekara were married on 15 May 2008 in Quezon City, Philippines. Maekara brought Marinay to
Japan. However, Marinay allegedly suffered physical abuse from Maekara. She left Maekara and started to contact
Fujiki.

Fujiki and Marinay met in Japan and they were able to reestablish their relationship. In 2010, Fujiki helped Marinay
obtain a judgment from a family court in Japan which declared the marriage between Marinay and Maekara void on
the ground of bigamy. On 14 January 2011, Fujiki filed a petition in the RTC entitled: Judicial Recognition of
Foreign Judgment (or Decree of Absolute Nullity of Marriage).

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DECISION OF LOWER COURTS:

(1) RTC: dismissed the petition for "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of
Marriage)" based on improper venue and the lack of personality of petitioner, Minoru Fujiki, to file the petition.

ISSUES & RULING:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages
(A.M. No. 02-11-10-SC) is applicable.

No. Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No.
02-11-10-SC) does not apply in a petition to recognize a foreign judgment relating to the status of a marriage where
one of the parties is a citizen of a foreign country. Moreover, in Juliano-Llave v. Republic, this Court held that the
rule in A.M. No. 02- 11-10-SC that only the husband or wife can file a declaration of nullity or annulment of
marriage does not apply if the reason behind the petition is bigamy. While the Philippines has no divorce law, the
Japanese Family Court judgment is fully consistent with Philippine public policy, as bigamous marriages are
declared void from the beginning under Article 35(4) of the Family Code. Bigamy is a crime under Article 349 of
the Revised Penal Code. Thus, Fujiki can prove the existence of the Japanese Family Court judgment in accordance
with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.

(2) Whether a husband or wife of a prior marriage can file a petition to recognize a foreign judgment nullifying the
subsequent marriage between his or her spouse and a foreign citizen on the ground of bigamy.

Yes. [t]he recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of
special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish the status or right of a
party or a particular fact.Rule 108, Section 1 of the Rules of Court states:

Sec. 1. Who may file petition. Any person interested in any act, event, order or decree concerning the civil
status of persons which has been recorded in the civil register, may file a verified petition for the cancellation or
correction of any entry relating thereto, with the Regional Trial Court of the province where the corresponding civil
registry is located. (Emphasis supplied)

There is no doubt that the prior spouse has a personal and material interest in maintaining the integrity of the
marriage he contracted and the property relations arising from it.

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(3) Whether the Regional Trial Court can recognize the foreign judgment in a proceeding for cancellation or
correction of entries in the Civil Registry under Rule 108 of the Rules of Court.

Yes. There is neither circumvention of the substantive and procedural safeguards of marriage under Philippine law,
nor of the jurisdiction of Family Courts under R.A. No. 8369. A recognition of a foreign judgment is not an action to
nullify a marriage. It is an action for Philippine courts to recognize the effectivity of a foreign judgment, which
presupposes a case which was already tried and decided under foreign law.

In the recognition of foreign judgments, Philippine courts are incompetent to substitute their judgment on how a
case was decided under foreign law. They cannot decide on the family rights and duties, or on the status, condition
and legal capacity of the foreign citizen who is a party to the foreign judgment. Thus, Philippine courts are limited
to the question of whether to extend the effect of a foreign judgment in the Philippines. In a foreign judgment
relating to the status of a marriage involving a citizen of a foreign country, Philippine courts only decide whether to
extend its effect to the Filipino party, under the rule of lex nationalii expressed in Article 15 of the Civil Code.

For this purpose, Philippine courts will only determine (1) whether the foreign judgment is inconsistent with an
overriding public policy in the Philippines; and (2) whether any alleging party is able to prove an extrinsic ground to
repel the foreign judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact. If there is neither inconsistency with public policy nor adequate proof to repel the judgment, Philippine
courts should, by default, recognize the foreign judgment as part of the comity of nations.

Roehr v. Rodriguez

Facts:
Petitioner Wolfgang O. Roehr, a German citizen, married private respondent Carmen Rodriguez, a Filipina, on
December 11, 1980 in Germany. Their marriage was subsequently ratified on February 14, 1981 in Tayasan, Negros
Oriental. Out of their union were born Carolynne and Alexandra Kristine.Carmen filed a petition for declaration of
nullity of marriage before the Makati Regional Trial Court (RTC). Wolfgang filed a motion to dismiss, but it was
denied.Meanwhile, Wolfgang obtained a decree of divorce from the Court of First Instance of Hamburg-Blankenese.
Said decree also provides that the parental custody of the children should be vested to Wolfgang.Wolfgang filed
another motion to dismiss for lack of jurisdiction as a divorce decree had already been promulgated, and said motion
was granted by Public Respondent RTC Judge Salonga. Carmen filed a Motion for Partial Reconsideration, with a
prayer that the case proceed for the purpose of determining the issues of custody of children and the distribution of
the properties between her and Wolfgang. Judge Salonga partially set aside her previous order for the purpose of
tackling the issues of support and custody of their children.
1st Issue:

W/N Judge Salonga was correct in granting a partial motion for reconsideration.

Ruling:

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Yes. A judge can order a partial reconsideration of a case that has not yet attained finality, as in the case at bar.
The Supreme Court goes further to say that the court can modify or alter a judgment even after the same has become
executory whenever circumstances transpire rendering its decision unjust and inequitable, as where certain facts and
circumstances justifying or requiring such modification or alteration transpired after the judgment has become final
and executory and when it becomes imperative in the higher interest of justice or when supervening events warrant
it.

2nd issue:

W/N Judge Salonga's act was valid when she assumed and retained jurisdiction as regards child custody and support.

Ruling: Yes.

As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our jurisdiction. But
the legal effects thereof, e.g. on custody, care and support of the children, must still be determined by our courts.

Before our courts can give the effect of res judicata to a foreign judgment, such as the award of custody to Wolfgang
by the German court, it must be shown that the parties opposed to the judgment had been given ample opportunity to
do so on grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of
Civil Procedure).

In the present case, it cannot be said that private respondent was given the opportunity to challenge the judgment of
the German court so that there is basis for declaring that judgment as res judicata with regard to the rights of
Wolfgang to have parental custody of their two children. The proceedings in the German court were summary. As to
what was the extent of Carmens participation in the proceedings in the German court, the records remain unclear.

Absent any finding that private respondent is unfit to obtain custody of the children, the trial court was correct in
setting the issue for hearing to determine the issue of parental custody, care, support and education mindful of the
best interests of the children.

FOREIGN ARBITRAL AWARDS

As defined in the Special Rules of Court on Alternative Dispute Resolution (ADR Rules), a foreign
arbitral award is one which is made in a country other than the Philippines. Under the Alternative Dispute
Resolution Act of 2004 (ADR Law), the recognition and enforcement of foreign arbitral awards is mainly
governed by the New York Convention. For foreign arbitral awards not covered by the Convention, the Court may,
on grounds of comity and reciprocity, recognize and enforce a non-convention award as a convention award. The
ADR Rules clarify that the comity and reciprocity in question refers to that extended by foreign states with respect
to awards made in the Philippines. As to those states which do not extend such comity and reciprocity, the court

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may nevertheless treat such award as a foreign judgment enforceable as such under Rule 39, Section 48, of the Rules
of Court.Proceedings for recognition and enforcement are also governed by relevant provisions of the ADR Rules
and ADR Law.

Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)

Objectives

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards seeks to:

- Provide common legislative standards for the recognition of arbitration agreements and;

- Court recognition and enforcement of foreign and non-domestic arbitral awards.

The Conventions principal aim:

- To ensure that foreign and non-domestic arbitral awards will not be discriminated against and

- To ensure such awards are recognized and generally capable of enforcement in the Parties respective
jurisdictions.

The Conventions ancillary aim:

- To require courts of Parties to give full effect to arbitration agreements by requiring courts to deny the
parties access to court in contravention of their agreement to refer the matter to an arbitral tribunal.

Key provisions

The Convention applies to awards made in any State other than the State in which recognition and
enforcement is sought and to awards not considered as domestic awards. When consenting to be bound by the
Convention, a State may declare that it will apply the Convention.

- In respect to awards made only in the territory of another Party and;

- Only to legal relationships that are considered commercial under its domestic law.

The central obligation imposed upon Parties is to recognize all arbitral awards within the scheme as binding
and enforce them, if requested to do so, under the lex fori. Each Party may determine the procedural mechanisms
that may be followed where the Convention does not prescribe any requirement.

The Convention defines five grounds upon which recognition and enforcement may be refused at the
request of the party against whom it is invoked. These are the following:

- Incapacity of the parties

- Invalidity of the arbitration agreement

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 - Due process

- Scope of the arbitration agreement

- Jurisdiction of the arbitral tribunal

- Setting aside or suspension of an award in the country in which or under the law of which, that award was
made.

The court may, on its own motion, refuse recognition and enforcement of an award based on the following
grounds:

- Arbitrability

- Public policy

The Convention seeks to encourage recognition and enforcement of awards in the greatest number of cases
as possible. That purpose is achieved by:

-Removing conditions for recognition and enforcement in national laws that are more stringent than the
conditions in the Convention.

-Allowing the continued application of any national provisions that give special or more favourable rights
to a party seeking to enforce an award.

- Allowing an interested party to avail itself of law or treaties of the country where the award is sought to
be relied upon, including where such law or treaties offer a regime more favourable than the Convention.

Entry into force

The Convention entered into force on 7 June 1959 (article XII).

How to become a party

-The Convention is closed for signature.

-It is subject to ratification, and is open to accession by any Member State of the United Nations, any other
State, which is a member of any specialized agency of the United Nations, or is a Party to the Statute of the
International Court of Justice (articles VIII and IX).

Optional and/or mandatory declarations and notifications

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 When signing, ratifying or acceding to the Convention, or notifying a territorial extension under article X,
any State may on the basis of reciprocity declare that:

- It will apply the Convention to the recognition and enforcement of awards made only in the territory of
another Party to the Convention.

- It will apply the Convention only to differences arising out of legal relationships, whether contractual or
not, which are considered as commercial under the national law of the State making such declaration (article I).

Denunciation/Withdrawal

-By a written notification to the Secretary-General of the United Nations.

-Shall take effect one year after the date of the receipt of the notification by the Secretary-General (article
XIII).

PART ONE: United Nations Conference on International Commercial Arbitration, New york, 20 May10
June 1958

On May 3, 1956, Resolution 604 was adopted to convene a conference in concluding a convention on
recognition and enforcement of foreign arbitral awards as well as considering measures to increase effectiveness of
arbitration in settlements. The Economic and Social Council deliberated, prepared, and opened the Convention for
signature.

In addition, suggestions and recommendations prepared by the Secretary-General were taken into account
to consider measures in increasing the effectiveness of arbitration in settlement of private law disputes.

As commercial arbitration progresses through prevailing information on arbitration, organizations should

continue to pursue activities regarding such matters.

Creation of new abribitration facilities and development of current ones should be done by appropriate
governmental and other organizations to avoid duplication of efforts and emphasize on measures which give greater
benefits.

Governments and other organiztions are encouraged to provide tehnical assistance in furtherance of the
said aim.

National laws on arbitration should be uniform to define suitable subject matter for model arbitration
statutes and other measures.

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 United Nations should encourage further study of measures to increase the effectiveness of arbitration in
the settlement of disputes.

CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

ARTICLE I

It applies:

To the recognition and enforcement of arbitral awards made in the territory of a State other than the State where
the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether
physical or legal.

To arbitral awards not considered as domestic awards in the State where their recognition and enforcement are
sought.

ARBITRAL AWARDS

It includes not only awards made by arbitrators appointed for each case but also those made by permanent arbitral
bodies to which the parties have submitted.

When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State
may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of
awards made only in the territory of another Contracting State. It may also declare that it will apply the Convention
only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial
under the national law of the State making such declaration.

ARTICLE II

Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to
arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

The court of a Contracting State shall refer the parties to arbitration, unless it finds that the said agreement is null
and void, inoperative or incapable of being performed.

ARTICLE III

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of
procedure of the territory where the award is relied upon, under the conditions laid down in the following articles.

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There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or
enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement
of domestic arbitral awards.

ARTICLE IV

To obtain the recognition and enforcement, the party applying for recognition and enforcement needs to supply the
following: (a) The duly authenticated original award or a duly certified copy thereof; (b) The original agreement
referred to in article II or a duly certified copy thereof.

If the said award or agreement is not made in an official language of the country in which the award is relied upon,
translation shall be made and certified by an official or sworn translator or by a diplomatic or consular agent.

ARTICLE V

It may be done at the request of the party against whom it is invoked, only if the party furnishes to the competent
authority where the recognition and enforcement is sought, proves that:

The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity,
or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication
thereon, under the law of the country where the award was made; or

The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of
the arbitration proceedings or was otherwise unable to present his case; or

The award deals with a difference not contemplated by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; or

The composition of the arbitral authority or the arbitral procedure was not in

accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the
country where the arbitration took place; or

The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority
of the country in which, or under the law of which, that award was made.

Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country
where recognition and enforcement is sought finds that: The subject matter of the difference is not capable of
settlement by arbitration under the law of that country; or The recognition or enforcement of the award would be
contrary to the public policy of that country.

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ARTICLE VI

If an application for the setting aside or suspension of the award has been made to a competent authority, the
authority before which the award is sought to be relied upon may:

Adjourn the decision on the enforcement of the award; and

Order the other party to give suitable security

ARTICLE VII

The provisions of the Convention shall not affect the validity of multilateral or bilateral agreements concerning the
recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested
party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the
law or the treaties of the country where such award is sought to be relied upon.

ARTICLE VIII

The Convention shall be open until 31 December 1958 for signature on behalf of any Member of the United Nations
and also on behalf of any other State which is or hereafter becomes a member of any specialized agency of the
United Nations, or which is or hereafter becomes a party to the Statute of the International Court of Justice, or any
other State to which an invitation has been addressed by the General Assembly of the United Nations.

ARTICLE IX

The Convention shall be open for accession to all States referred to in article VIII. Accession shall be effected by the
deposit of an instrument of accession with the Secretary- General of the United Nation. Any State may, at the time
of signature, ratification or accession, declare that this Convention shall extend to all or any of the territories for the
international relations of which it is responsible. Such a declaration shall take effect when the Convention enters into
force for the State concerned. At any time thereafter any such extension shall be made by notification addressed to
the Secretary-General of the United Nations and shall take effect as from the ninetieth day after the day of receipt by
the Secretary-General of the United Nations of this notification, or as from the date of entry into force of the
Convention for the State concerned, whichever is the later. With respect to those territories to which this Convention
is not extended at the time of signature, ratification or accession, each State concerned shall consider the possibility
of taking the necessary steps in order to extend the application of this Convention to such territories, subject, where
necessary for constitutional reasons, to the consent of the Governments of such territories

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ARTICLE X

The accession of states to the Convention is effected by depositing with the UN Secretary-General an instrument of
accession. As stated in Article XII, the Convention actually came in to force on the 90th day after the deposit of the
third instrument of ratification/accession, i.e., 7 June 1959 --- but as to each state who ratified or acceded after this
third deposit, the Convention is only deemed to enter into force on the 90th day after it deposits its own instrument
of ratification/accession.

ARTICLES XI and XII

Both provisions provide for the the binding effect of signing, ratifying or acceding to the Convention.

For territories belonging to a state: At the time of its signature, ratification, or accession, a state may declare that
the Convention shall also apply to its territories. The Convention takes effect at the same time it enters into force for
the signing state.

If the Convention has already entered into force in a state, extension to its territories is made by notifying the UN
Secretary-General. The Convention then enters into force on the 90th day after the Secretary-General receives the
notice.

For federal/ non-unitary states: The federal authority in a state will be treated the same as other Contracting Parties
to the Convention, with respect to Convention Articles within its legislative power. As to those Articles within the
legislative power of the constituent states/provinces, the Convention requires the federal authority to bring these to
the attention of the local legislatures.

The other Contracting Parties may request, through the UN, that a federal state inform them about what action has
been taken by the federal and constituent legislatures to give effect to the Articles.

ARTICLE XIII

It provides for the the rules on denunciation. 1. A state may denounce the Convention by notifying the UN
Secretary-General. It takes effect one year after receipt. 2. A state that extends the Convention to its territories can
notify the Secretary-General that such extension shall cease one year after his receipt of the notification. 3. The
Convention will still apply to those arbitral awards recognition and enforcement for

which was instituted before denunciation took effect.

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ARTICLE XIV

A provision on fairness - as against other Parties, a Contracting Party can only avail of those Articles which it itself
had agreed to apply.

ARTICLES XV and XVII

Both provisions relate to the duties of the UN and the Secretary-General. 1. Signatories and ratifiers of the
Convention are to be notified by the Secretary-General about subsequent signatures and ratifications, accessions,
declarations, denunciations, and notifications. 2. Signatories and ratifiers are to be provided certified copies of the
Convention. 3. Authentic copies of the Convention rendered in Chinese, English, French, Russian, and Spanish shall
be deposited in the UN archives.

ADR LAW PROVISIONS AND ADR RULES ON FOREIGN ARBITRAL AWARDS

One important distinction to make is whether a foreign arbitral award is confirmed by a foreign court or by
the Regional Trial Court.

If a foreign court confirms the award, it is recognized and enforced as a foreign arbitral award --- not a
foreign judgment --- in our jurisdiction. As a foreign arbitral award, it is automatically presumed to have been made
in the due course of arbitration and thus subject to enforcement. In other words, recognition and enforcement is the
general rule, and refusal the exception. It is only when the grounds enumerated in the Law and Rules are established
can recognition and enforcement be refused. Moreover, the decision to recognize and enforce is immediately
executory, and RTC has no power to disturb the arbitral tribunals determination of facts and interpretations of law.

If it is the RTC which confirms the award, it is enforced in the same manner as final and executory
decisions of Philippine courts.

PROCEDURE

In recognition of Article IV of the New York Convention, the ADR Law reiterates that a party applying for
recognition or enforcement must provide (a) the original or a duly authenticated copy of the arbitral award and the
arbitration agreement and (b) a duly certified translation, if the foregoing are in a language which is not an official
language of the Philippines.

Any party to the arbitration may commence proceedings for recognition and enforcement of the award, as soon as it
is received, by filing the three documents together with a petition, before the RTC:

1. Where the assets to be attached or levied are located

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2. Where the act to be enjoined is being performed

3. In the principal place of business of any of the parties

4. In the residence of any of the parties, if they are individuals, or

5. In the National Capital Judicial Region.

The petition must state:

1. The addresses of the parties to arbitration

2. The country where the arbitral award was made

3. Whether such country is a signatory to the Convention, and

4. The relief sought.

If it is found to be sufficient in form and substance, the respondent is to be notified and furnished a copy of
the petition, and given 30 days from receipt to enter his opposition. The only grounds he may raise are those
enumerated in Article V of the Convention, which are substantially reproduced in Rule 13.4 of the ADR Rules.

If the court finds that the petition and opposition raise mainly issues of law, it may require the parties to
submit briefs of their legal arguments within 30 days from receipt of the courts order.

If the court finds there are issues of fact, it shall motu proprio on request of any party, require the parties to
submit affidavits of their all their witnesses, within a period of not less than 15 but not more than 30 days from
receipt of the court order. In its discretion, the court may likewise allow reply affidavits.

The court will conduct hearing only if it determines that there is a need, based on the parties submissions.
The affidavits take the place of direct testimony, i.e., the witnesses will be immediately subjected to cross
examination.

It may adjourn or defer rendering a decision if an application for suspension or setting aside of the arbitral
award had been filed with a competent court in the state where said award was made. Upon petitioners application,
the court may require the respondent to furnish bond.

REMEDIES

A. Motion for reconsideration from rulings of the RTC may be filed within 15 days, non- extendible, from receipt
of the order. The other party also has a non-extendible 15-day period to file his opposition or comment.

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The only relevant grounds for an MFR as enumerated in Rule 19.1 of the ADR Rules are:

1. That the arbitration agreement is inexistent, invalid or unenforceable

2. An RTC ruling ---

2.a. Recognizing and enforcing a foreign arbitral award

2.b. Refusing recognition and enforcement of a foreign arbitral award

2.c. Upholding or reversing the arbitral tribunals jurisdiction

2.d. Granting or denying a party an interim measure of protection

2.e. Refusing to grant assistance in taking evidence 2.f. Enjoining or refusing to enjoin a person from
divulging confidential information, and 2.g. Declining a request for assistance in taking evidence.

B. As to appeal, the ADR Rules expressly prohibit the filing of appeals that question the merits of the arbitral
award. The relevant matters which can be appealed are also those enumerated above as grounds for MFR, except
invalidity or unenforceability of the arbitration agreement. In appeals from RTC rulings confirming an arbitral
award, appellant is required to post a counterbond in favor of the appellee, in an amount equivalent to the award.

C. The losing party may also choose to file with the RTC an application to refuse recognition and enforcement of
the award. If RTC considers it proper, it may vacate its own decision, and require the applicant to furnish security
(on request of the party seeking recognition and enforcement).

D. Special civil action for certiorari may be availed of when the [RTC], in making a ruling under the Special ADR
Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of
law...to annul or set aside said ruling of the [RTC].

The relevant grounds as enumerated in Rule 19.26 are rulings of the RTC:

1. Holding that the arbitration agreement is inexistent, invalid or unenforceable

2. Reversing the arbitral tribunals preliminary determination upholding its jurisdiction

3. Granting or refusing an interim relief

4. Allowing a party to enforce a foreign arbitral award pending appeal, and

5. Denying a petition for assistance in taking evidence.

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RECOMMENDATION REGARDING THE INTERPRETATION OF ARTICLE II, PARAGRAPH 1, OF
THE CONVENTION ON THE RECOGNITION AND EFNORCEMENT OF FOREIGN ARBITRAL
AWARD

GENERAL ASSEMBLY

Recognizing the value of arbitration as a method of settling disputes arising in the context of international
commercial relations

Recalling its resolution 40/72 of 11 December 1985 regarding the Model Law

Recognizing the need for provisions in the Model Law To conform to current practices in international trade and
modern means of contracting with regard to the form of the arbitration agreement and the granting of interim
measures

Believing that revised articles of the Model Law will significantly enhance its operation

Noting that the preparation of the revised articles of the Model Law on the form of the arbitration agreement and
interim measures was the subject of due deliberation and extensive consultations with Governments

Believing that, in connection with the modernization of articles of the Model Law, the promotion of a uniform
interpretation and application of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
done at New York, 10 June 1958,2 is particularly timely,

Expresses its appreciation to the United Nations Commission on International Trade Law for formulating and
adopting the revised articles of its Model Law on International Commercial Arbitration on the form of the arbitration
agreement and interim measures

Also expresses its appreciation to the United Nations Commission on International Trade Law for formulating and
adopting the recommendation regarding the interpretation of article II, paragraph 2, and article VII, paragraph 1, of
the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958

Requests the Secretary-General to make all efforts to ensure that the revised articles

of the Model Law and the recommendation become generally known and available.

POLICY RECOMMENDATIONS

ARTICLE II PARAGRAPH 2

Agreement in writing includes an arbitral clause in a contract or an arbitral agreement

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 Policy recommendation: Application of the New York Convention, given that the circumstances in the said
provision is non-exhaustive

ARTICLE VII PARAGRAPH 1

Provisions of the New York Convention do not affect the validity of multilateral or bilateral agreements
concerning the recognition and enforcement of arbitral awards entered into by Contracting States

It does not deprive any interested party of any right to avail an arbitral award in the manner and to the extent
allowed by law or the treaties of the country where the award is sought to be relied on

Policy recommendation: Application of the New York Convention allow any interested party to avail itself of
rights it may have to seek recognition of the validity of such an arbitration agreement

CONSIDERATIONS TAKEN

The UNCITRAL Model representing different legal, social and economic systems and levels of development

Resolutions of the General Assembly reaffirming the mandate of the Commission as the core legal body in
international trade law

Adoption of the New York Convention has been a significant achievement in promoting the rule of law Adoption
of the resolution by the Conference of Plenipotentiaries that the Conference considers that greater uniformity of
national laws on arbitration would further the effectiveness of arbitration in the settlement of private law disputes

Different interpretations of the form requirements of the Convention and enactments of domestic legislation and
case law more favorable than the Convention with respect to such Wide use of E-Commerce

Legal instruments

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA/AMERICAN

INTERNATIONAL UNDERWRITER (PHIL.) INC., VS. STOLT-NIELSEN PHILIPPINES, INC. AND
COURT OF APPEALS

FACTS: On 9 January 1985, United Coconut Chemicals, Inc. (SHIPPER) shipped 404.774 metric tons of distilled
C6-C18 fatty acid on board MT "Stolt Sceptre," a tanker owned by Stolt-Nielsen Philippines Inc. (CARRIER), from
Bauan, Batangas, Philippines, consigned to "Nieuwe Matex" at Rotterdam, Netherlands, covered by Tanker Bill of
Lading BL No. BAT-1. The shipment was insured under a marine cargo policy with Petitioner National Union Fire
Insurance Company of Pittsburg (INSURER), a non-life American insurance corporation. The Bill of Lading issued
by the CARRIER contained a general statement of incorporation of the terms of a Charter Party between the
SHIPPER and Parcel Tankers, Inc., entered into in Greenwich, Connecticut, U.S.A. Upon receipt of the cargo by the
CONSIGNEE, it was found to be discolored and totally contaminated. The claim filed by the SHIPPER-ASSURED

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with the CARRIER having been denied, the INSURER indemnified the SHIPPER. On 21 April 1986, the INSURER
filed suit against the CARRIER, before the RTC for recovery of the sum of P1,619,469.21, with interest. The
CARRIER moved to dismiss/suspend the proceedings on the ground that the RTC had no jurisdiction over the claim
the same being an arbitrable one; that as subrogee of the SHIPPER-ASSURED, the INSURER is subject to the
provisions of the Bill of Lading, providing for arbitration. The INSURER opposed the dismissal/suspension of the
proceedings on the ground that it was not legally bound to submit the claim for arbitration inasmuch as the
arbitration clause provided in the Charter Party was not incorporated into the Bill of Lading, and that the arbitration
clause is void for being unreasonable and unjust. On 28 July 1987, the RTC 1 denied the Motion, but subsequently
reconsidered its action on 19 November 1987, and deferred resolution on the Motion to Dismiss/Suspend
Proceedings until trial on the merits "since the ground alleged in said motion does not appear to be indubitable." The
CARRIER then resorted to a Petition for Certiorari and Prohibition with prayer for Preliminary Injunction and/or
Temporary Restraining Order before the respondent Appellate Court seeking the annulment of the 19 November
1987 RTC Order. On 12 April 1989, the respondent Court 2 promulgated the Decision setting aside the judgment;
private respondent (the INSURER) is ordered to refer its claims for arbitration; and respondent Judge is directed to
suspend the proceedings in Civil case No. 13498 pending the return of the corresponding arbitral award.

ISSUE: Whether or not the terms of the Charter Party, particularly the provision on arbitration, binding on the
insurer

HELD: YES. The pertinent portion of the Bill of Lading in issue provides in part: xxxCopy of the Charter may
be obtained from the Shipper or Charterer. While the provision on arbitration in the Charter Party reads: xxx4.
Arbitration. Any dispute arising from the making, performance or termination of this Charter Party shall be settled in
New York.

Clearly, the Bill of Lading incorporates by reference the terms of the Charter Party. It is settled law that the charter
may be made part of the contract under which the goods are carried by an appropriate reference in the Bill of
Lading. This should include the provision on arbitration even without a specific stipulation to that effect. The entire
contract must be read together and its clauses interpreted in relation to one another and not by parts. Moreover, in
cases where a Bill of Lading has been issued by a carrier covering goods shipped aboard a vessel under a charter
party, and the charterer is also the holder of the bill of lading, "the bill of lading operates as the receipt for the goods,
and as document of title passing the property of the goods, but not as

varying the contract between the charterer and the shipowner" and is the law between the parties who are bound by
its terms and condition provided that these are not contrary to law, morals, good customs, public order and public
policy (Article 1306, Civil Code). It has not been shown that the arbitral clause in question is null and void,
inoperative, or incapable of being performed. Nor has any conflict been pointed out between the Charter Party and
the Bill of Lading. In fine, referral to arbitration in New York pursuant to the arbitration clause, and suspension of
the proceedings in Civil Case No. 13498 below, pending the return of the arbitral award, is, indeed called for.

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