Conflicts of Law – Midterm Reviewer

JUDICIAL JURISDICTION

JURISDICTION and CHOICE OF LAW Three kinds:

Jurisdiction – it is the right of a state to exercise authority over persons and things within its 1. JURISDICTION OVER THE PERSON
boundaries. 2. JURISDICTION OVER THE RES
3. JURISDICTION OVER THE SUBJECT MATTER

JURISDICTION OVER THE PERSON – the power of the court to render judgment that will
bind the parties to a case.

HOW ACQUIRED (OVER THE PERSON):

• Judicial Jurisdiction -
power or authority of a 1. Jurisdiction over the plaintiff – The court acquires jurisdiction over the plaintiff
JURISDICTION court to try a case, render from the moment he invokes the aid or power of the court by instituting an action
through initiatory pleading.
judgment, and execute it 2. Jurisdiction over the defendant – The court acquires jurisdiction over the
(Kinds of in accordance of law. defendant in the following way:
a. Voluntary Appearance where action is in personam.1
• Legislative Jurisdiction -
Jurisdiction in ability of the state to
b. Coercive process through personal or substituted service of summons
where action is in personam.2
c. Constructive service of summons by publication where
Conflict of promulgate laws and
enforce it on all persons
identity/whereabouts of defendant is unknown.3
d. Extra-territorial Service4
Laws) and properties within its i. In NM Rotschild v. Lepanto, extra-territorial service applies only
where the action is in rem or quasi in rem, but not in an action in
territory. personam.
ii. The Rules of Court provides four instances wherein a defendant who
is a non-resident and is not found in the country may be served with
summons by extra-territorial service, to wit:
1. When the action affects personal status of the plaintiffs;
2. When the action relates to, or the subject of which is
STEPS IN DETERMINING JURISDICTION IN CONFLICT OF LAW property, within the Philippines, in which the defendant
claims a lien or an interest, actual or contingent;
Question: WON the court has jurisdiction over the case? 3. When the relief demanded in such action consists, wholly or
in part, in excluding the defendant from any interest in
Answer:
property located in the Philippines;
 Affirmative: (1) Refuse to assume jurisdiction on the ground of FORUM NON 4. When the defendant non-resident’s property has been
CONVENIENS; or (2) Assume Jurisdiction, in such case the court may apply either attached within the Philippines. (Of these instances, service
the local law or foreign law. of summons may be effected by (a) personal service out of the
 Negative: The court should dismiss the case on the ground of lack of jurisdiction. country, with leave of court; (b) publication, with leave of court;
or (c) any other manner the court may deem sufficient).

1 3
RULES OF COURT, Rule 14, Sec.20. RULES OF COURT, Rule 14, Sec. 14.
2 4
RULES OF COURT, Rule 14, Secs 6-7. RULES OF COURT, Secs. 15-16.
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e. If defendant is FOREIGN JURIDICAL ENTITY:
i. Registered to transact business in PH: Service of Summons
through its resident agent designated in accordance with law or
government official designated by law.
ii. Not Registered to transact business in PH: Service of Summons
through (1) Personal Service coursed through the appropriate court
in the foreign country with DFA’s assistance; (2) Publication in a
newspapers of general circulation in the country where the defendant
may be found and serving of a copy of court order at the last known
address of the defendant by registered mail; (3) Facsimile or any
recognized electronic means; (4) Any other means as the court may
direct.
Note:
The Minimum Contact Doctrine and Fundamental Fairness test
“A State does not have jurisdiction in the absence of some reasonable basis for exercising it,
whether the proceedings are in rem, quasi in rem, or in personam. To be reasonable, the
jurisdiction must be based on some minimum contacts that will not offend traditional notions
of fair play and substantial justice.” (HSBC v. Jack Sherman)
“To bind a defendant who is absent from the territory of the forum to a judgment in
personam, due process requires that he should have certain minimum contacts with it and
that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice.” (Interneational Shoe Co. v. Washington)
JURISDICTION OVER THE RES – Jurisdiction over the subject matter in controversy,
regardless of the persons who may be interested therein.
Jurisdiction over the re referred to as in rem jurisdiction in contrast to in personam
jurisdiction, which binds only the parties and their successors-in-interest. A personal action,
however, may be converted to in rem by attachment of property among others. (Personal
Action -> In Rem Action by Attachment of Property).
Where the action is in rem, in that the purpose of the suit is not to impose personal liability
on anyone but to affect the interests of all persons in a thing, the State may render through
its courts a valid judgment, as long as it has jurisdiction over the thing even tohugh it may
not have personal jurisdiction over the persons whose interests are affected.
How Acquired:
a Seizure of property under a legal process; or
b Institution of legal proceedings where the court’s power over the property is
recognized and made effective.
Note: Action in personam lodged against a person based on personal liability; in rem is
directed against the thing itself instead of the person; in quasi in rem names a person as
defendant, but its object is to subject that person’s interest in a property to a corresponding
lien or obligation.
JURISDICTION OVER THE SUBJECT MATTER – Power of the court to hear and determine
cases of the general class to which proceedings in question belong.
Test of Jurisdiction: Whether the law vests the court the power to enter upon the inquiry
SOME JURISDICTION JURISPRUDENCE:
CHOICE OF FORUM
Sweet Lines v. Teves
 The Rules of Court provides that venue of an action may be changed or transferred
from one province to another by written agreement of the parties, but when the
agreement negates the action of the claimants, inconvenient to the plaintiff or it will
offend substantial justice, the agreement is not valid by reason of public policy.
Unimasters Conglomeration Inc. v. CA
 Written stipulations as to the venue may be restrictive in the sense that the suit may
be filed only in the place agreed upon, or merely permissive in the sense that the
parties may file their suit not only in the place agreed upon but also in the place fixed
by law. Thus, there must be accompanying language clearly and categorically
expressing the purpose and design that the actions between them be litigated only at
the place agreed upon, otherwise, it is merely permissive.
NM Rotschild v. Lepanto
 Extraterritorial service of summons applies only where the action is in rem or quasi in
rem, but not if an action is in personam. Thus, when the defendant does not reside or
is not found in the Philippines, and the action is in personam, the PH Court cannot
try any case against him because of lack of jurisdiction over the defendant.
 Exception: Unless and until the plaintiff attaches a property within the PH belonging
to the defendant, in which case the action will be converted to quasi in rem.
Travelers Health Association v. Commonwealth of Virginia State Corporation
Commission
 Where business activities reach out beyond one state and create continuing
relationships and obligations with citizens of another state, courts need not
resort to a fictional consent in order to sustain the jurisdiction of regulatory
agencies in the latter state.
Test Factors or points of contract connecting factors could be any of the following:
1. The nationality of a person, his domicile, his residence, his place of soujourn, or his
origin;
2. The seat of a legal or juridical person;
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3. The situs of a thing, that is, the place where a thing is, or is deemed to be situated
(lex situs);
4. The place where an act has been done, such as the place where a contract has been
made, a marriage celebrated, a will signed, or a tort committed. (lex loci actus);
5. The place where an act is intended to come into effect (e.g. the place of performance
of contractual duties or the place where a power of attorney to be exercised);
6. The intention of the contracting parties as to the law that should govern. (lex loci
intentionis);
7. The place where judicial or administrative proceedings are instituted or done.
8. The flag of a ship.
Act of State Doctrine
Every sovereign state is bound to respect the independence of every other sovereign state, and
the courts of one country will not sit in the judgment on the acts of the government of
another, done within its own territory. Redress of grievances by reason of such acts must be
obtained through the means open to be availed of by sovereign powers as between
themselves.
IN RE: Philippine National Bank v. U.S. District Court of Hawaii
 A judgment of a court may be an act of the state. There is no question that the
judgment of the PH Supreme Court gave effect to the public interest of the PH
Government. The forfeiture action was not a mere dispute between a private
parties. It was an action initiated by the PH government pursuant to its statutory
mandate to recover property allegedly stolen from the treasury.
Republic v. Marcos
 Not all acts of foreign government are free from the court scrutiny under the act
of the state doctrine. The doctrine prevents inquiry into public, governmental acts
but not into private or commercial conduct. Officials are shielded only when they
act in their SOVEREIGN CAPACITY FOR THE PUBLIC INTEREST. Moreover, the
doctrine is particularly inappropriate in cases in which the government invoking
such is no longer in power.
Principle of Forum Non Conveniens
Forum Non Conveniens – A court’s discretionary power to decline the exercise of its
jurisdiction where another court may more conveniently hear a case.
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 the following requisites are present:
1. The Philippine Court is one to which the parties may conveniently resort to;
2. The Philippine Court is in a position to make an intelligent decision as to the law and
the facts;
3. The Philippine Court has or is likely to have the power to enforce its decision
(Communiciation Materials and Design Inc. v. CA)
Instances where Forum Non Conveniens may be invoked:
1. Evidence and witness may not be readily available in the forum;
2. Court dockets of the forum may be already clogged and permitting additional cases
would hamper the speedy administration of justice;
3. Belief that the matter can be better tried and decided in another jurisdiction, either
because the main aspect of the case transpired there or the material witnesses have
their residence there;
4. To curb the evils of forum-shopping
5. Forum has no particular interest in the case;
6. Other courts are open and the case may be better tried in said courts;
7. Inadeaqucy of the local judiciary machinery;
8. Difficulty of ascertaining the foreign law applicable.
Principle of Forum-Shopping
Forum-Shopping -> occurs when a party attempts to have his action tried in a particular
court or jurisdiction where he feels that he will receive the most favourable judgment or
verdict.
First Philippine International Bank v. CA
 The test for determining whether a party violated the rule against forum-
shopping is where the elements of litis pendentia are present or where a final
judgment in one case will amount to res judicata in the other.
Bank of America NT&SA v. CA
 The following are the requisites of litis pendentia: (a) there must be identity of the
parties, (b) identity of rights asserted and relief prayed for, and (c) identity in the
two cases should be such that the judgment which may be rendered in one would
amount to res judicata to other.
CHOICE OF LAW
Various Theories on Choice of Law
1. Theory of Comity
 The application of foreign legal system in cases involving a foreign
element is proper because their non-application would constitute a
disregard of foreign sovereignties, a lack of comity towards foreign state.
 GR: The law of one state cannot operate in another state. EXCEPT:
Theory of Comity.
 It is the recognition which one nation allows within its territory,
legislative, executive, or judicial acts of another nation, having due
regard both to international duty and convenience, and to the rights of
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its own citizens, or of other persons who are under the protection of its
laws.
2. Doctrine of Retaliation
 The reasonable, if not necessary conclusion, appears to us to be that
judgment rendered in any other foreign country, by the laws of which
our own judgments are reviewable upon the merits, are not entitled
to full credit and conclusive effect when sued upon in this country,
but are prima facie evidence only of the justice of the plaintiff’s claim.
 In other words, foreign judgment only a prima facie evidence of the
claim of the claimants.
3. Protection of Vested Rights Theory
 This is based on territoriality principle. The forum can only recognize
and apply of its own laws.
 Courts cannot enforce foreign laws or foreign judgments, but it is one
of the tenets of justice, that rights acquired in one country must be
recognized and legally protected in others.
 In other words, the forum will not apply the foreign law but will
simply recognize the rights that are vested by said law.
4. Local Law Theory
 GR. Court can only apply of its local laws, to the exclusion of all
foreign laws. Thus, a foreign law/rule cannot be applied. EXCEPT:
Unless, it has been “appropriated” by the State of the forum and
transformed into a domestic rule.
5. Revolution in U.S. Conflict of Law
 Usual method of disposing of cases, first, to characterize or identify
the legal category into which the case before it falls, and second,
apply the proper connecting factor for that legal category in order to
choose the State whose legal system will apply. (e.g. validity of
marriage – the usual connecting factor is the place or jurisdiction
where the marriage was celebrated)
 Two Themes Concerning Choice of Law: (1) Jurisdiction-selection and
(2) Rule-selection
 1. Jurisdiction-selection -> Requires the court to apply the law of the
country/jurisdiction chose by the conflicts rule, irrespective of the
content of the particular rule of law selected. (e.g lex loci contractus)
 2. Rule-selection – emphasizes a choice between different substantive
rules of law, in light of the policies at issue.
6. The Second Restatement and the Law of the Most Significant
Relationship Theory
 Where there is no applicable statute or codal provision, these
basic policies for the guidance of judges should be kept in
mind.
o Choice of law Rules should be designed to make the
international and interstate systems work well;
o The court should apply its own local law unless there is a
good reason for not doing so;
o The court should consider the purpose of its relevant local law
in determining whether to apply its own law or the law of
another state;
o Choice of law Rules should seek to achieve certainty,
predictability, and uniformity of result;
o The court should seek to protect the justified expectations of
the parties;
o The court should seek to apply the law of the State of the
dominant interest. (The State whose interests are most deeply
affected should have its law applied);
o The court should seek to further the fundamental policy
underlying the particular field of law;
o The court should seek to attain justice in the individual case.
7. State Interest Theory (The State whose interests are most deeply
affected should have its law applied)
 When a court is asked to apply the law of a foreign state, different
from the law of the forum, it should inquire into the policies
expressed in the respective laws, and into the circumstances in which
it is reasonable for the respective states to assert an interest in the
application of those polices.
 If the court finds that one state has an interest in the application of
the policy in the circumstances of the case and the another state has
none, it should apply the law of the only interested state. (e.g. lex
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situs rule – the law of the country where the land is situated should
govern)
 If the court finds an apparent conflict between the interests of the
States, it should reconsider;
 If, upon reconsideration, the court finds that a conflict between the
legitimate interests of the two states is unavoidable, it should apply
law of the forum.
 If the forum is disinterested, but an unavoidable conflict exists
between the interest of two other States, and the court cannot with
justice decline to adjudicate the case, it should apply the law of the
forum, at least if that law corresponds with the law of one of the other
states.
8. Cavers Principles of Preference (Theory of Justice)
 The principles of preference are to be used by the courts as guides for
decision for the purpose of satisfying the demands of justice in
particular instances.
 It provides solutions which are just not only because they provide a
fair accommodation of conflicting state policies but because they
afford fair treatment to individuals who are caught in a conflict
between state policies.
9. Functional Approach
 It aims at solutions that are “the rational elaboration and application
of the policies and purposes underlying specific legal rules and legal
systems as a whole.
 First, locate the concerned jurisdiction (defined as one that has
expressed interest in regulating an aspect of the multistate
transaction in question).
 Then, construct for each concerned jurisdiction a regulating rule that
takes account both of relevant policies expressed through the
jurisdiction’s domestic rules and of policies peculiar to multistate
transactions as distinguished from wholly domestic transactions.
10. Choice-influencing considerations (five basic considerations)
 Predictability of results
 Maintenance of interstate and international order
 Simplification of the judicial task
 Advancement of the forum’s governmental interests
 Application of the better rule of law
11. Comparative Approach
 It is a method to bring out the similarities and dissimilarities of
various legal systems with reference to specific problems in each
field, examined their purposes and effects, showed to what extent
unification or reconciliation is feasible, and proposed specific
solutions in the context of the needs and requirements of a growing
international community.
12. Convenient Forum Theory
 Application of a foreign law in such a convenient forum, which
implies substantial connection with given conflict problem. It must be
understood as an exception from lex fori.
 The forum should not hesitate to apply a foreign law where legislative
or judicial rules of choice of law or the policy of the forum’s domestic
rules require a different answer.

13. The Harmony of Treatment and Uniformity of Result Theory
 The purpose of the Conflict of Law is uniformity of result and
harmony of treatment.
 If to every conflicts case, the court were to apply only the law of the
forum, i.e., the law of the place where the court sits, the result of the
suit would depend entirely on where it is situated.
 Equal justice requires that the decision be the same wherever the
claim is brought.
 Identical problems should be given identical solutions, thus resulting
in a harmony of laws. The application of the same prevents forum
shopping.
Ways of Disposing of Conflicts Cases
When a conflicts case, a case involving foreign elements, is brought before a court, there are
three alternatives open in disposing of the case:
1. Dismiss the case, either for lack of jurisdiction or refusal to assume jurisdiction over
the case.
2. Assume the jurisdiction over the case and apply the internet law of the forum.
3. Assume jurisdiction over the case and consider or apply foreign law.
Some Jurisprudence on Choice of Law:
Conflicts of Law – Midterm Reviewer
Tayag v. Benguet Consolidated FOREIGN LAW
 The Supreme Court has held that administration, whether principal or ancillary, Application of the Internal or Domestic Law
certainly extends to the assets of a decedent found within the state or country where
it was granted, the corollary being that an administrator appointed in one state or 1. When the law of the forum expressly so provides
country has no power over property in another state. 2. When the foreign law has not been properly pleaded and proved
 An administrator appointed in a foreign state has no authority in the Philippines.  GR: The courts cannot take judicial notice of foreign laws. So that if the
proper foreign law is not pleaded and not proven as a fact, the court has the
Zalamea v. CA right to presume that the applicable foreign law is the same as the internal or
domestic law of the forum (Doctrine of Processual Presumption), and should
 The SC has held that the court should apply the law of the place where the airline
therefore apply the internal law.
ticket is issued, when the passengers are residents and nationals of the forum and
3. When the case involves any of the exceptions to the application of the proper foreign
the ticket is issued in such State by the defendant airline.
law
United Airlines Inc. v. CA

 The SC has held that Philippine law should apply because of the doctrine of lex loci
Exceptions to the application of foreign law:
contractus – as a general rule, the law of the place where the contract is made or
entered into governs with respect to its nature and validity, obligation and 1. Where its enforcement would run counter to some important public policy of the
interpretation. forum;
2. When its application would lead to an infringement of good morality;
Cadalin v. POEA Administrator
3. When the foreign law is penal in nature;
 The Supreme Court held that party expectation must be protected by giving effect to 4. When the foreign law is procedural in nature;
the parties’ own choice of the applicable law. The choice of law must, however, bear 5. When the question relates to immovable property in the forum;
some relationship to the parties or their transaction. 6. When the foreign law is fiscal or administrative in nature;
 The applicable law on prescription is Philippine law. As a general rule, foreign 7. When the application of foreign law would involve injustice or injury to the nationals
procedural law will not be applied in the forum. A law on prescription of actions is a or residents of the forum;
sui generis in Conflict of Laws in the sense that they can be viewed either as 8. When the application of foreign law would endager the foreign relations or vital
procedural or substantive. interests of the states.

Asiavest Merchant Bankers v. CA Some Jurisprudence:

 The SC has held that a foreign judgment is presumed to be valid and binding in the
country from which it comes, until a contrary showing, on the basis of a presumption
of regularity of proceedings and the giving of due notice in the foreign forum.
 A judgment, against a person, of a tribunal of a foreign country having jurisdiction to
pronounce the same is a presumptive evidence of a right as between the parties and
their successors in interest.
 Note: The authenticity of the foreign judgment must be proved, otherwise it cannot be
recognized.
Sy Joc Lieng v. Sy Quia
 The Supreme Court held that the law of a foreign country is one of fact,
subject to proof like any other factual issue.
Fluemer v. Hix
 The SC held that the courts of the Philippine are not authorized to take
judicial notice of the laws of the various States of the American Union. Such
laws must be proved as facts.
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Willamette Iron & Steel Works

 Pursuant to (Section 25, Rule 132 of ROC) it does not exclude the
presentation of other competent evidence to prove the existence of a foreign
law.
 In the case at bar, Mr. Arthur W. Bolton, an attorney-at-law of San
Francisco, California, since the year 1918, under oath, quoted verbatim
section 322 of the California Civil Code and stated that said section was in
force at the time the obligations of the defendant to the plaintiff were
incurred, i. e., on November 5, 1928 and December 22, 1928. This evidence
sufficiently established the fact that the section in question was the law of
the State of California on the above dates.

Pardo v. Republic

 In several naturalization cases, it was held by the Court that evidence of the law of a
foreign country on reciprocity regarding the acquisition of citizenship, although not
meeting with the prescribed rule of practice, may be allowed and used as basis for
favorable action, if, in light of all the circumstances the Court is of satisfied of the
authenticity of the written proof offered.

Proof of Foreign Law

General Rule – Courts do not take judicial notice of foreign laws. If alleged to apply, it must
be proved according to the following rules:

1. Written Law
a. By official publication;
b. Copy attested by officer having legal custody thereof. If the record is not kept
in the Philippines, a certificate with seal from the secretary of embassy,
legation, consul-general, consul, vice-consul, consular-agent, or any other
officer in the foreign service of the Philippines stationed in the foreign
country to the effect that said officer has custody is required.
c. A published treaties on the subject law provided that the court take judicial
notice of the competence of the writer or evidence is introduced to establish
the author’s competence.

2. Unwritten Law
a. By oral testimony of the expert witness.

Note: Willamette case and CIR v. Fisher.

b. By printed and published books of reports of decisions of the country

involved, if proved to be commonly admitted in its courts.