F. Harrison, Jurisprudence and thé Conflict of Laws (1919). 'W. Johnson, Conflict of Laws, by W. S. Johnson (2d ed., 1962). A.K. Kul, Comparative Commentaries on Private Intemational Law 1937) R. C. Minor, Conflict of Laws (1901). J. H.C. Morris, Cases on Private Intemational Law (1968); The Conflict of Laws (1971), ‘A. Nussbaum, Principles of Private intemational Law (1943), R. Phillimore, Commentaries on Private Intemational Law or Comity, vol. IV Grd ed, 1889). E, Rabel, The Conflict of Laws: A Comparative Study (4 vols., 1945, 1947, 1950, 1958). H_E. Read, Recognition and Enforcement of Foreign Judgments (1938), A.H, Robertson, Characterization in the Conflict of Laws (1940), C. M, Schmitthoff, A Textbook of the English Conflict of Laws (1954). E. F. Scoles and Peter Hay: Conflict of Laws (1982) with 1988-1989 “Pocket Part J. Story, Commentaries on the Conflict of Laws (1834; 8th ed. by Bigelow, 1883). G. W. Stumberg, Principles of Conflict of Laws (3rd ed., 1963). R. J. Weintraub, Commentary on the Conflict of Laws (1971). 'W. Westlake (and Bentwick), A Treatise on Private International: Laws (ith ed., 1925), F Wharton, A., Treatise on the Conflict of Laws (2 vols, 1905). CHAPTER I NATURE, DEFINITION, AND SCOPE OF THE SUBJECT ‘A. How Problems in Conflict of Laws Arise ‘The phenomenal advarices in the field of communication and transpor- tation, the frequency and variety of events and transactions that cut across national and territorial boundaries, and the diversity of legal systems pre~ vailing in the world, have made Private; Inteniational Law or. Conflict of Laws, as the subject is known in the United States and Canada, more im- portant than it was many years ag6. IF the world were only one State, governed by only one set of rules, and ‘administered only by one centfal Governsient, there would beno such sub- ject as Conflict of Laws or Private Intemational Law. Even if the world were divided; a8 it is today, into different States or territorial units; if every Staté of init had identical niles of law, uniformly "applied and administered, there would beno occasion for the subject to start off and develop. ‘The fact, however, is that one hundred eighty-five States of the world (as of May 1995) have diverse and sepatate systems of law. To complicate the situation, there are some States, such as the United States and the United Kingdom, where various teritorial.units are governed by different rules of law. A divorce obtained in Nevada may be considered ineffective in South, Carolina; a contract valid under the law of Arkansas may be considered void in New York. ‘Any situation, event, or transaction that cuts across state lines may give rise to’a problem in Conflict of Laws or Private littemational law. Where persons or things afé not involved in any kind of intemational trade or inter- ‘course, no conflicts problem may occur. Thus, if Bayani de la Cruz and Maria Liwanag, both Filipino nationals, marry in the Philippines, accumu- late properties in the Philippines, and—out of their marriage—children are ‘bom in the Philippines, any legal problem conceming their marriage, their2 PRIVATE INTERNATIONAL LAW properties, or the legitimacy of their children, is simply and immediata solved by the application of intemal Philippine law. BuitBaymide la cn, residing in San Francisco, California, marries Ann Tav*or, an American na. tional from Pennsylvania, with whom three children are bom, and some years later, he succeeds in obtaining a “no fault” divorce fiom her in Reno, Nevada (representing that they had been living apart for 5 years), anumber of questions may arise, to wit: What law governs the capacity of Bayani de 1a Cruzto marry Ann Taylor—Philippine law, Califomia law, or Pennsylva- nialaw? What law govems their matrimonial property relations? How about the inheritance rights of the three children—by what law shall their succes- sional rights be regulated? Is the Nevada divorce valid in the Philippines? All these questions fall within the realm’of Conflict of Laws or Private Inter- national Law. ‘To summarize, problems in the Conflict of Laws arise due to the con- currence of two factors: (1) the division of the world into different States or territorial units, each State or unit having a different system of law, and (2) . the presence of a situation containing a foreign element, that is to say, an event or transaction affected by the diverse laws of two or more States or territorial units. - 1. The diversity of laws ‘Why should the various legal systems have different rules? This ques- tion brings us to the complex study of the evolution of law. Anthropological research has shown that various nations and races have not followed exactly the same lines of evolution. The differences in legal rules have their root cause in the peculiar habits, ways of thinking, mores and customs of each group ofppeople, including what the ruling class or group thought was neces- sary to protect its own interests.’ Each State or territorial unit has its own rules dealing with the same aspects of human existence—birth, personality, filial relations, marriage, separation, divorce, property, contracts and trans- actions, business associations, inheritance, and so forth. These matters are usually dealt with differently in each legal system. “Wes Paton, Taceprudence (2nd od 191) Chapter I; fr a philosophical scustion of the historical engin and nature of law, s00 I Savigny, S)stem of the Modern Roman Low CChaptce TL The theory of economic datorminism holds that log rules are mercy arellecdog, fof te economic base on which the lio ofthe community is bait NATURE, DEFINITION AND SCOPE, 3 For instance, under Japanese law, absolute divorce by mutual consent of the spouses is relatively easy. In the United States today, Nevada and Califomia display the most liberal attitude in the granting of divorce de- crees, In the Philippines, however, thereis still araging debate as to whether the present prohibition against absolute divorces should be retained or not. Likewise, in the field of intemational business, Cuba has insignificant prob- lems with foreign investments and multinational corporations, since it does "not allow foreign interests to dominate its economy. Such problems, how- ever, exist in many countries of the Third Wotld, including the Philippines, ‘where foreign investors are encouraged to come in and engage in business. 2. A situation involiing a foreign element ‘A factual situation that cuts across territorial lines andis affected by the diverse laws of two or more States is said to contain “a foreign element.” ‘The presence of a foreign element is inevitable since social and economic affairs of individuals and associations are rarely confined to the geographic limits of their birth or inception. Every time a Filipino national marries an alien, each time aperson travels abroad by taking a plane or a boat, or when- ever a local businessman concludes a business deal with a firm in Japan, Hongkong, the United States, the Middle East or Westem Europe—whether by correspondence, cablegram, telephone, fax machine or videophone—a host of problems in Conflict of Laws may possibly afise. So is any case in ‘which the facts occur in one State but the suit is brought in another, so that the later (the forum) must decide between its own law and the law of the place where the events occur “The forms in which this foreign element may appear are many.” The foreign element may simply consist inthe fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one State involves properties situated in another State. In other ‘cases, the foreign element may assume a complex form. Global Electronics ‘America, based in New York, incorporates and establishes a subsidiary in the Philippines, under Philippine law. The latter is now doing business un- der the firm name, “Global Electronics Philippines.” Assume that the parent company in New York owns 51% of the capital stock of the subsidiary, that “TGheshire and North, Private International Law, p. $ by PAM, North and J.J. Fawostt (Butterworths, London, 1992). For coavesionce, the book will be cited simply as Cheshire ‘and Norther 4 PRIVATE INTERNATIONAL LAW the balance of 49% is owned by Filipino citizens, and thatthe same propor- tion is reflected in the composition of the Board of Directors. A number of interesting questions may arise from its day-to-day operations: (1) What Jaw govems the purchase by the subsidiary of electronic appliances and instruments from its parent company? (2) What law govems the legality of royalties paid by the subsidiary for technology introduced by the parent com- pany? (3) What law govems the day-to-day transactions between the sub. sidiary and domestic firms? (4) What law govems the declaration of divi. dends by Global Electronics Philippines? (5) Would it make any difference if the parent comporation were Japanese, based in Tokyo with the same pro portion of capital stock ownership? Hence, cases. in Conflict of Laws or Private Intemational Law may involve a varity of problems, ranging from the simplest to the most complex. °°” B. Definition With the above observations, the various definitions of Private Intema- tional Law or Conflict of Laws may be propetly evaluated. . ___ The earliest works published inthe Philippines on the subject adopt the following definition of Minor: “Private Intemational Law embraces those universal principles of right and justice which govern the courts of one state having be- fore them cases involving the operation and effect of thé laws of another state or eourniry.”> z ° ‘This definition contains two assuruptions: (1) that rales of Private Tnter- national Law are universally the same; and (2) that they are based on prin- ciples of right and justice prevailing everywhere. The first is erroneous for, ‘as will be pointed out shortly, Private Intemational law today is national law, Philippine rules of Conflict of Laws are wholly distinc ftom those of Cali. fomia, Germany, or Japan.*, The seédnd assiitiption is debatable. As the ‘great German jurist, Savigny, wamed long ago, one should always be on guard against holding his juridical notions asthe offspring of right, pure reason, or natural justice and considering them ss commin to hiimian nature in general’ A great deal of what the Romans considered tnivereal many "Winer, @ ‘Seo Bags. Sols and Pee Hay, Conic of Las (os Pubing Co, 196) 1 For coaveninco, tho book willbe cited as Scoles and Hay. ‘Savigny, On the Vocation of Our Age for Legiaton and Fuispradeace, 24136, NATURE, DEFINITION AND SCOPE 5 ‘centuries ago, such as the institution of slavery, is today considered a mere ‘accident of the particular conditions in which Roman Law was developed & Be that as it may, there does not exist a considerable body of universal ptin- ciples upon which a truly intemational private law may be based. What exist are national rules of Conflict of Laws or Private Intemational Law. Westlake defines the subject, thus: “Private Intemational Law is that department of private jurisprudence which determines before the courts of ‘what nation each suit should be brought; and by the law of what nation it should be decided."” ‘There isin this definition exclusive emphasis on'the role of courts to decide problems in Private Intemational Law. This is quite inaccurate, From day to'day, administrative agencies’ and officials, foreign offices and legations, find it necessary to decide many problems in Cofiflict of Laws, Judge Goodrich describes Conflict of Laws as “that part of the law which deals with the extent to which the law of a state operates ind-deter- ‘mines whether the rules of oie or another siate should be applied in & legal situation, A ‘conflict of laws problem is presented whenever a legal contro- versy arises in which there is a foreign element." The Second American Restatement defines Confit of Laws as “that |par ofthe law of each State which determines what effects given othe fct thatthe case may have a significant relationship to more than one State? One ofits foremost erties, Prof. Brainerd Currie, defines it as “thet branch of law designed to deal with conflicts between the interests of two of move States in applying the policies embodied in their respective laws."™" We shall se the implications of these definitions later. For our purposes, we shall adopt the following definition: Privaté In- ternational Law or Conflict of Laws is that part ofthe law of each State \ ‘Paton, A Textbook of Jusispradeace (2nd ed. 1951), 80-81 . Wislake, st od. 1858, ; ‘"Goodich, (Scoles), |. The fourth edition (1964) of this biok was prepared by Prof Eugene F Scoles. ln 1982, Prof: Scolos and Dean Peter Ha} publshed thes took, Cordier of Laws Hombook Sass, Wort Publishing Co). heriafter ited simply ae Scoles aad Fay Section 2. The Second Restetomeat was adopted and promulgated by the Amercns Law Insitute at Washington, D.C. on May 23. 1969. To disaguish it fiom the Amevoan Restatement of Coafict of Law, it wil bo cite here a: Restatement Second, "Curia, Tho Disntoosted Third State, 28 Law and Conteapetary Proboms, 754, 756 (1963),