Conflict of Laws
COL
University of San Agustin
Atty. Sumido
Sources:
➢ Conflict of Laws by Agpalo 2004
➢ Atty. Sumido’s lecture (1st Semester A.Y. 2021-2022 Edition)
➢ Other sources as may be indicated
!!! Trigger Warning: Sexual Abuse/Harassment!!!
Chapter I
Applicable Principles:
Principles in Private International Law
Comity
❖ Recognition which one state allows within its territory to the legislative, executive, or judicial acts of
another state, having due regard both to international duty and convenience and to rights of its own
citizens or of other persons who are under the protection of its laws.
❖ Contracts or rights acquired or made in one country, are also recognized and enforceable by the courts
of another country.
❖ Already part of the treaty, convention, agreement, and even our municipal laws
Lex Situs
❖ Applicable law regarding the acquisition, transfer and devolution of the title to property is the law
where the property is located.
❖ COMPARE: Lex Rei Sitate generally deals with land, actions relating to recovery of land
Lex Fori
❖ Law of the forum where the case is filed
Lex Loci
Celebrationis
❖ Law of the place where a contract is entered into
❖ Forms and solemnities of contracts
❖ General Rule:
➢ Where the contract was exhibited
❖ Exceptions:
➢ It involves National Law
■ We must follow our own set of rules/law
■ E.g. laws relating to familial rights, duties, etc.
■ Wherever the citizen is, this will still apply, abroad or not
➢ It involves immovable property (Lex Rei Sitae applies)
❖ In civil procedure, venue may be agreed upon by parties
➢ General rule: venue is only for the purpose of convenience
➢ XPN: If the venue has been exclusively agreed upon, then this must be followed. Terms such as
“exclusively”, “only”
■ XPN to the XPN: The jurisdiction of the Court was already acquired prior to this agreement
Lex Rei Sitae
❖ Law of the place where the thing is situated
❖ Applies to land; basically the same as Lex Situs
Lex Loci
Contractus
Lex Loci Delicti
❖ Law of the contracting parties
❖ 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
❖ The law of the place where the offense or wrong took place
Kilberg
Doctrine
❖ The forum is not bound by the law of the place of injury or death as to the limitation on damages for
wrongful act; When the rule involves PROCEDURAL, the law of the forum is not bound by the country
where the place of injury or wrongful act arose.
❖ If the action is filed in Philippine court, the court will adopt its own Rules on Procedure.
❖ The law of the forum governs on the issue
Center of
Gravity
Doctrine
❖ Interpret the contract based on the purpose for enforceable
❖ E.g. the grouping of relationships
➢ You have a house and lot being sold, and there are fixtures included, will they be included as part
of the sale owned by the tenants?
➢ Interpret based on the “center of gravity”
❖ E.g. the wife is selling a portion of the property. Some properties are owned by the husband, some by
the wife. Without the consent of the husband, the wife sold the parcel of land. Would it attach to the
properties co-owned or the conjugal property?
➢ The applicable situation is that the sale should only involve property owned by the wife alone.
Remedies involved
1. Enforcement of rights that comes from the foreign country, and the Philippine court receives the subject of controversy.
a. Issue accrued from a foreign state, and later to be decided by the Philippine court
2. In case of foreign judgment, the judgment shall be enforceable and recognized
a. Are we obliged to enforce or recognize the foreign judgment?
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b.
i.
Yes as per the principle of comity, or already covered by treaty or convention, or municipal law.
Is the recognition automatic?
i.
No. It must be authenticated first. By determination in a proper forum or court proceedings.
Main purpose of Conflict of Laws
❖ To reconcile the differences of foreign and local laws
Set of Conflict of Laws that must be followed
❖ National Law or Conflict of Laws
➢ Article 15, 16, 17 of the CCP
➢ Article 26 of the FCP
➢ Notes: these are limited application for conflict of laws
■
Only few Jurisprudence
Can the court deny or refuse to resolve the case on the ground of lack of knowledge, jurisprudence, or customs?
❖ No. Article 9 of the CCP provides that the courts cannot deny judgment based on lack of such.
❖ The court has three options:
➢ Dismiss the case
➢ Apply based on local laws or domestic laws
➢ Use special laws or knowledge applicable to the issues submitted
■
Special knowledge may refer to referral to other courts.
Foreign judgments cannot be recognized entirely
❖ There must be authentication first
❖ In COL, there is always conflict with foreign and local laws.
Remedies in enforcement of foreign judgments
1. Laws may be accepted
2. Impliedly dismiss or remove the other laws
3. Excepting the other laws
a. An exception to the general application of law
Case of the Stewardess
❖ Existence of a contract stating that any breach thereof, Saudi Arabia has jurisdiction
❖ There was a case of sexual harassment in Singapore
❖ Court in Saudi Arabia said that they favor the pilot
❖ Stewardess filed the case before the Philippine Courts
❖ Was that right?
➢ Sir says yes
CASE: Pastor sexually harassing a teenager
❖ Case was filed for sexual harassment but was dismissed for lack of evidence
➢ Court awarded civil liability though
➢ The deposited amount is protected by the Bank Secrecy Act
■
When the court made an attachment to the Bank, the Bank refused based on the BSA
■
Although the BSA does not disallow or allow attachment of property in cases where the Court makes
civil judgments.
❖ Decision cannot be made because there is no specific applicable law
❖ SC said that:
➢ It is proper. Acquittal is only for lack of evidence. It does not mean the defendant is not guilty
➢ The attachment to the Bank is proper and the defense of the BSA is untenable
➢ Despite the absence of an applicable law, the Court can still decide based on the vehement urge of conscience.
➢ The civil liability is granted.
Chapter II
The Choice of Law
❖ Requirements in the application of the choice of law
➢ Touch on the procedural or substantive laws
➢ If there is a commission of a wrong or violation, it refers to the violation of substantive law
➢ In case of procedural rules, it refers to remedies available to parties.
Foreign law has no effect over territories
❖ We are confined to our own territorial jurisdiction, in the same manner such foreign countries are protected by theirs
❖ XPN:
➢ Laws that are considered as encroachment of territorial jurisdiction
➢ E.g. Anti-Piracy Law
■
You may chase the perpetrator even if they are outside of your jurisdiction
➢ If already part of our municipal laws
■
E.g. carriage of goods Sea Act, Warsaw Convention, law on transportation
How would you make the choice of law?
❖ First there must be the process of characterization
➢ Characterization refers to the determination of facts and evidence to form a decision on the choosing of the
applicable law.
➢ In the filing of a complaint, to know what specific complaint to file, you have to determine the facts,
circumstances, evidence, cause of action.
What are the applicable legal systems?
❖ Domestic or Foreign legal systems
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Remedy:
❖ By Contract
➢ Parties may stipulate what particular law is applicable.
➢ XPN: If the law is a prohibited law or the stipulation is void, contrary to public policy
■
Then, it is not acceptable
➢ XPN: If there is no jurisdiction
■
This cannot simply be agreed upon by the parties
Laws in the Philippines regarding COL”
Article 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad
Article 16. Real property as well as personal property is subject to the law of the country where it is stipulated.
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. (10a)
Article 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. (11a)
According to Lex loci contractus:
❖ The law of the place where the contract was executed
❖ With respect to formalities and solemnities of the contract
Exceptions:
1.
According to Article 15:
❖ Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding
upon citizens of the Philippines, even though living abroad.
❖ National Law of the party.
❖ E.g. A man and a woman, Filipinos, below 18, entered into marriage abroad, which was allowed by the laws of
that country. However, according to Philippine law, this is contrary to our own laws, since it involves Philippine
citizens. Therefore, their marriage cannot be recognized.
2.
Domiciliary Rule v. Nationality Rule
❖ Domiciliary - Applicable based on the place where the parties were last domiciled
❖ Nationality - Regardless of residence of Filipinos, they have to follow the law of the nationality
■
This precedes the domiciliary rule
3.
Natural v. Juridical Persons
➢ Juridical
■
The State, their political subdivisions, or those created by law
Article 37. Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every natural person and is lost
only through death. Capacity to act, which is the power to do acts with legal effect, is acquired and may be lost. (n)
Article 38. Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil interdiction are mere restrictions on
capacity to act, and do not exempt the incapacitated person from certain obligations, as when the latter arise from his acts or
from property relations, such as easements. (32a)
Article 39. The following circumstances, among others, modify or limit capacity to act: age, insanity, imbecility, the state of being
a deaf-mute, penalty, prodigality, family relations, alienage, absence, insolvency and trusteeship. The consequences of these
circumstances are governed in this Code, other codes, the Rules of Court, and in special laws. Capacity to act is not limited on
account of religious belief or political opinion.
A married woman, twenty-one years of age or over, is qualified for all acts of civil life, except in cases specified by law. (n)
CHAPTER 2
Natural Persons
Article 40. Birth determines personality; but the conceived child shall be considered born for all purposes that are favorable to it,
provided it be born later with the conditions specified in the following article. (29a)
Article 41. For civil purposes, the foetus is considered born if it is alive at the time it is completely delivered from the mother's
womb. However, if the foetus had an intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four
hours after its complete delivery from the maternal womb. (30a)
Article 42. Civil personality is extinguished by death.
The effect of death upon the rights and obligations of the deceased is determined by law, by contract and by will. (32a)
Article 43. If there is a doubt, as between two or more persons who are called to succeed each other, as to which of them died
first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is presumed that they
died at the same time and there shall be no transmission of rights from one to the other. (33)
CHAPTER 3
Juridical Persons
Article 44. The following are juridical persons:
(1) The State and its political subdivisions;
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(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as
they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality,
separate and distinct from that of each shareholder, partner or member. (35a)
Article 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or recognizing
them.
Private corporations are regulated by laws of general application on the subject.
Partnerships and associations for private interest or purpose are governed by the provisions of this Code concerning
partnerships. (36 and 37a)
Article 46. Juridical persons may acquire and possess property of all kinds, as well as incur obligations and bring civil or criminal
actions, in conformity with the laws and regulations of their organization. (38a)
4.
Where the Property is located
❖ The place where the property is located is the ruling law
❖ There must be registration of the property, if in the Philippines
❖ Article 16. Real property as well as personal property is subject to the law of the country where it is stipulated.
5.
Law of the decedent
❖ Where the decedent is
❖ Renvoi doctrine
➢ The Doctrine of Renvoi is a legal doctrine which applies when a court is faced with a conflict of law
and must consider the law of another state, referred to as private international law (“PIL”) rules. This
can apply when considering foreign issues arising in succession planning and in administering
estates.
➢ An issue referring back to the issues
■
E.g. National Law of the decedent referring it to the law of the domicile
●
Which law shall it be? It shall be interpreted based on our OWN laws
●
Law of the place where the property is located
❖ Article 16. 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.
6.
Forms and solemnities of the contract
❖ Follow the law of the place where it was located
➢ But as to enforcement of where the property was located, follow the law of the country where it is
located
❖ Article 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.
➢ It will be based on Philippine Law; it is an extension of our territory.
❖ 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.
7.
Law of the place where it was created
❖ Via Corporation Code
the creation, formation, organization or dissolution of foreign corporations or those which fix the
➢
relations, liabilities, responsibilities, or duties of stockholders, members or officers of foreign
corporations to each other or to the corporation shall be governed by the laws of the country of their
❖
8.
creation or where they are incorporated
Base on the law of the place where it was incorporated
If it is a borrowing statute
by Bahrain or Saudi Arabia Law
❖ Prescriptive period
❖ XPN: if the statute is against public policy
❖ E.g. Under Bahrain Law, in a breach of contract, only within 1 year. The contract was executed in
Bahrain with a Filipino as one of the parties. Under the CCP, if a contract is in writing, the period of
limitations is 10 years. Under the Labor Code, recovery of backwages may be filed within 3 years.
➢ What will apply? Bahrain - 1 year, CCP - 10 years, LCP - 3 years
■
LCP, 3 years. Recovery refers to labor relations.
■
The Bahrain law cannot apply because our own law prohibits it by reason of
public policy, as stated in our Labor Code.
●
Even if it is a borrowing statute, our public policy shall prevail
■
Civil Code cannot apply because LCP is more applicable.
Rule: Agreement by parties; it cannot cover jurisdiction
❖ Venue and forum may be agreed, but not jurisdiction.
❖ E.g. A debtor obtained a loan from a bank. Under that Singaporean Law, the bank is allowed to foreclose the property and
file an action for recovery of the sum of money. The contract says that it is allowed under Singaporean Law. There was an
agreement, but can the court acquire jurisdiction more than what is given by law? (Hongkong and Shanghai Banking)
➢ NO. even if there is an agreement, it cannot cover jurisdiction. Our laws say that foreclosure and collection are
alternative remedies, not joint remedies. You can only choose one remedy.
❖ What if there is no agreement?
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➢
Place of the contract, its performance and execution shall rule. XPN is if it involves real property, contrary to
public policy, or touches questions of jurisdiction.
Substantive vs. Procedural Right
❖ Substantive Right
❖ Procedural Right:
➢ Remedy: Law of the Forum
Center of Gravity Doctrine
❖ 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
❖ RECALL: Example of the case of the house being sold
➢ Shall the furniture owned by the tenants be also included?
■
Of course not.
❖ RECALL: Example of the sale of the wife of the properties owned with husband.
➢ Shall the sale only be limited to the properties owned by the wife alone?
■
Yes.
Renvoi Doctrine
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."
Lex Fori
❖ Provides only for the forum or the court (or jurisdiction
❖ Parties may defer the choice of the forum because this choice is only for convenience.
❖ The law of the forum, or court; that is, the positive law of the country or jurisdiction of whose judicial system the court
where the suit is brought or remedy sought is an integral part.
Caver’s Principle
❖ Five layers:
➢ The court, faced with a conflict of laws case, has to decide the same by applying first, the written laws;
➢ second, the customs of the place; third, by judicial decisions; fourth, general principles of law; and fifth,
principles of justice, reason and equity, in view of the circumstances of the case
Foreign Law v. Local Law
❖ GR: Local Law shall prevail
❖ XPN: Foreign Law is applicable if it is already part of our own municipal laws
➢ E.g. the Warsaw Convention
➢ XPN to XPN: If the foreign law is contrary to public policy, public interest
❖ In what instance may a foreign judgment be applicable?
➢ Prove the authenticity of the foreign law
■
Follow and comply with the rules of evidence
■
E.g. Showing the issuance of a divorce decree, show the law, documents that prove such divorce is
allowed. Authenticate the documents with the consular office or diplomatic office of that country
(Philippine embassy in Japan, for example)
➢ Publication or notice of that law for which the foreign judgment is based
■
If penal law, publication must be enforceable
■
XPN: Treaties, conventions, agreements need not be published, as long as parties agreed thereon.
●
E.g. ICC, a penal law, need not be published since it is an International Treaty
Main idea of Chapter 2:
Characterization → choice of law → agreement of parties (not prohibited, against public policy or interest) → lex loci celebrationis
→ consider exceptions like real property, contract is contrary to our national law (national law prevails), should not cover
jurisdiction, should not be contrary to public policy
Chapter III - Citizenship and Domicile
Solemnities and Formalities
❖ GR: It follows the law of the country where the contract was executed
❖ XPNs:
➢ If it touches on our national law (Art. 15)
■
Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living abroad.
➢ Testamentary Succession (Art. 16)
■
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.
■
National law of the decedent prevails
➢ Personal or real property is involved
■
Where they are located
Domicile
❖ Domicile → establishment or permanent establishment of a home where one intends to return (animus revertendi)
➢ You can have many residences, but only one (1) domicile
Citizenship
❖ State of a person wherein they are entitled to their protection of their political and civil rights
❖ Allegiance to the state where the State provides protection to his political and civil rights
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❖
❖
Political rights
➢ Confined to the exercise to the right of suffrage, in this case.
Civil rights
➢ All other rights
Requirements to become Filipino Citizen (Constitution)
❖ "Sec. 1. The following are citizens of the Philippines.
➢ (1) Those who are citizens of the Philippines at the time of the adoption of this Constitution;
■
Consider those who are Filipinos under the 1973 Constitution
➢ (2) Those whose fathers or mothers are citizens of the Philippines;
■
Recall case of Tecson v. COMELEC (Fernando Poe case)
➢ (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 law.
❖ "Sec. 2. Natural-born citizens are those who are citizens of the Philippines from birth without having to perform any act to
acquire or person their Philippine citizenship. Those who elect Philippine citizenship in accordance with paragraph (3) of
Section 1 hereof shall be deemed natural-born citizens.
❖ "Sec. 3. Philippine citizenship may be lost or required in the manner provided by law.
❖ "Sec. 4. Citizens of the Philippines who marry aliens shall retain their citizenship unless by their act or omission they are
deemed, under their law, to have renounced it.
❖ "Sec. 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law."
Modes of acquiring citizenship
❖ Jus soli v. jus sanguinis
➢ Jus soli is where the child is born
➢ Jus sanguinis is by the blood of their parents (followed by the Philippines)
❖ Naturalization
➢ More than three years is already considered as unreasonable in choosing citizenship
Two kinds of citizens
❖ By birth
❖ By naturalization
Dual citizenship
❖ The status of a person who is a citizen of two or more countries at the same time. Dual citizenship arises when, as a result
of the concurrent application of the different laws of two or more states, a person is simultaneously considered a national
by the said states.
❖ One may apply (voluntary)
❖ One is deemed dual citizen without their choice
❖ Reacquisition of citizenship
➢ Previously lost it (and renounced), then acquired new citizenship (foreign), then later, reacquired Filipino
citizenship, without losing the foreign citizenship
❖ RA 9225
➢ Citizenship Retention and Re-Acquisition Act of 2003.
➢ Covers only natural-born Filipino citizens and not naturalized citizens.
■
Naturalized citizens cannot have dual citizenship, one as citizen of his country of origin and another
as naturalized citizen of the Philippines, which is inimical to the national interest.
■
Before he is allowed to take his oath as naturalized citizen he has to renounce, under oath, any and
all allegiances to any other country
■
The purpose is to prevent dual allegiance to two distinct jurisdictions.
➢ The dual citizenship is retained, under Republic Act 9225, except when he files a certificate of candidacy for an
elective position which requires that he renounce under oath his allegiance to any foreign country
■
Relinquishing of citizenship must be expressed
➢ Derivative citizenship
■
The unmarried child, whether legitimate, illegitimate or adopted, below eighteen (18) years of age, of
those who re-acquire Philip- pine citizenship upon effectivity of this Act shall be deemed citizenship of
the Philippines.
➢ Reacquisition
■
Naturalization (tedious)
●
Administrative, judicial, or legislative
■
Repatriation
●
Twin Requirements: What is needed is only the oath of allegiance and have it registered
at the Office of Local Registry where you last resided
●
Fulfillment of those two is already considered as complete compliance
➢ Loss of citizenship
■
By naturalization in a foreign country;
■
By express renunciation of citizenship;
■
By subscribing to an oath of allegation to support the constitution or laws of a foreign country upon
attaining twenty-one years of age or more;
■
By accepting commission in the military, naval or air service of a foreign country;
■
By cancellation of the certificate of naturalization;
■
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
■
In 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
❖ Administrative repatriation
➢ If you execute a repatriation process, there is a “reawakening” of the old citizenship
■
In a case, the Court held that the Congressman can run for office because there is already a
complete compliance when he had the oath and the registration. (Bengzon III v. HERT)
❖ Judicial naturalization
➢ 5 years in the Philippines
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❖
❖
❖
In administrative naturalization → agencies may naturalize
Legislative naturalization
➢ Congress confers the citizenship as a filipino citizen.
Effects of naturalization
➢ Cannot have dual citizenship
➢ Case of Pakistani woman who was naturalized. She was given a passport. When she left for abroad, she
usually uses her Pakistani passport since it is more convenient.
■
Supreme Court ruled that using of the passport is not only for convenience, it is tantamount to
implied renunciation of her citizenship
➢ Case of Santiago
■
A Filipina woman boasted her US passport and uses the same when leaving the country
■
SC held that it is “normal” for Filipino citizens to boast that she has an American passport
Several types of Domicile
❖ Domicile by birth → the standard
❖ Domicile by choice → there must be abandonment of the old domicile and the bodily presence of the person in the choice
of domicile;
❖ Requirements
➢ Intention to return
➢ Intent to make it permanent
❖ Domicile by operation of law
➢ E.g. a person was incarcerated to a penalty of imprisonment. He was designated to live in the penal colony.
■
The law provides that his domicile is the penal colony; he cannot refuse this
❖ Domicile of the wife
➢ Usually, the husband and the wife fix the domicile or family home
■
If there is a conflict, it is the husband’s choice that will be followed or prevails
■
If the wife will not follow, the Court will decide which one is the family domicile
Domicile v. Residence
❖ "Residence is used to indicate a place of abode, whether permanent or temporary; domicile denotes a fixed permanent
residence to which, when absent one has the intention of returning. A man may have a residence in one placed and
domicile in another. Residence is not domi- cile, 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 intention of remaining will constitute domicile.”
❖ For political purposes:
❖
Domicile v. Venue
❖ In annulment of marriage, either petitioner or respondent must be a resident of that place six months at least prior to the
filing of the complaint
Chapter IV - Nationality and Domicile of Corporations
Corporations:
❖ Section 2 of the Corporation Code defines a domestic corporation as "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."
❖ Also considered as attributes of a corporation
❖ Determination: (Tests)
❖
❖
❖
Incorporation test:
➢ The law of the incorporation that has been corporated
➢ If incorporated under Philippine laws, Filipino corporation
Grandfather Test
➢ The grandfather rule governs the strict application of the ownership of a corporation, namely, at least 60%
thereof must be owned by natural persons who are citizens of the Philippines, and it applies only to the
business enumerated in the Constitution.
➢ The first to incorporate shall be determined. If the incorporators were first Americans, then it is American
Control Test
➢ Otherwise known as majority test
➢ What is controlling is the ownership of the shares of stocks
Domicile of juridical person
❖ "Art. 51. W hen 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
principle functions.
❖ Consider:
➢ What part of the company has the legal representation to establish the domicile?
■
Usually, the articles of incorporation indicate its principal place of business or office, and it is where its
residence is.
■
The principal place of business or office of a corporation is its residence for purposes of venue of suit
or action.
Domicile of foreign corporation
❖ The domicile of a corporation is in the state where it is incorporated.
❖ Requirements for foreign corporations:
➢ License to engage in business
➢ Appointment of resident agent
■
The agent is an extension of the principal office of the corporation. The Court need only go to the
resident agent, not the principal office.
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❖
Corporation without license
➢ Cannot sue
➢ Will be sanctioned: payment of damages or cancelling of the certificate of incorporation
➢ Will be considered liable, but nevertheless the party may file against the juridical person
■
The juridical person cannot file a case against the parties
➢ As compared to corporations engaged in business and with complete requirements
■
Can sue and be sued
Chapter V - Contracts
Contract
❖ GR: The law shall govern by the place where it was executed
➢ Refers to forms and solemnities ONLY
❖ XPNs:
➢ Many
Exceptions:
1. National Law (Article 15)
a. If national law is involved, Article 15 prevails
b. Article 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living abroad.
c. E.g. With respect to marriage. Even if it is valid under US laws because the spouses got married at 17, the
marriage is not recognized under Philippine law because we require that the majority age is necessary (18 y.o.)
2. Real property is the object or subject matter
a. The law of the place where the properties are located, not the place where the contract was executed
b. Even if there is a present law that allows the maintenance of a law for execution, it being contrary to Article
15-17, the latter shall prevail
CASE: Government v. Frank
❖ A contract was executed in the US. In the US during that time, the parties may enter into a contract even though they are
minors. This is contrary to Philippine laws. In the USA, the contract is valid
➢ The contract calls for the gathering of garbage in Manila
➢ Frank failed to comply with the requirements to gather and collect garbage
❖ A case was filed against Frank
➢ Frank’s defense is tha the is not liable because under Philippine laws, minors are not allowed to enter into
contract and therefore it is void.
❖ SC holds that he is still liable because the contract of where it was signed is the controlling contract
Stages in the case of a contract
❖ Preparation, negotiation, perfection, consummation (or enforcement)
❖ Contract is based on the law of the place
➢ If it is unenforceable or contrary to public policy or interest, the latter shall prevail
➢ In case of conflict, the grouping of relationships makes it enforceable
Case:
❖
❖
A contract of sale where the lot is not specified but that it is owned by the wife.
Doctrine: if cannot be enforced, it shall be based on the regrouping of the relationships.
Contract following based on policy or customs
❖ GR: law applicable is the law chosen by the parties
❖ XPN: the law is against public policy or custom
➢ This will prevail
❖ CASE: an agreement that Amari law shall apply. Under it, any action related to back wages and benefits shall be filed in a
period within 1 year.
➢ Under the Labor Code, you are allowed 3 years
➢ Under Civil Code, you are allowed 10 years
➢ Which of the three is the applicable law?
■
Labor Law of 3 years because it is the most applicable
■
Amari Law cannot be applied as it is contrary to labor laws of the Philippines
■
Civil Code cannot apply because Labor Code is more applicable as a labor issue
❖ XPN: If the law is pre-emptory or preventive
➢ If the enforcement of public policy is prevented, public policy will prevail
➢ Example: the case above.
❖ XPN: If the law is contrary to the foreign law applicable
➢ Not only to Philippine law but also the one applicable
CASE: Whether or not workers may be terminated if there is a specific period for which they are hired?
❖ Zamora v. Brent
❖ The agreement changes the probationary period and requisites for regularization
❖ Provisions of a contract cannot be contrary to law. In this case, the Labor Code, even if there was an agreement between
the parties.
CASE: Freight alongside ship
❖ There is still a completed contract since there was no actual delay.
CASE: Air transportation
❖ Refers to the provision of the Warsaw Convention
❖ Considered as a municipal law in the Philippines
❖ Limited Liability Rule
➢ GR: Maximum of $500 per luggage
➢ XPN: this does not apply if the employees of the company are guilty of willful conduct or gross negligence
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❖
❖
■
Owner of the goods has the right to recover damages more than the limited liability rule.
CASE: Overbooking and so some passengers have to be rejected to accommodate special passengers
➢ Overbooking of not more than 10% of the seating capacity of an airline is allowable
➢ There is no violation if the above is complied with
CASE: The luggage was delayed because it was transferred from one airline to another due to overloading.
➢ It caused delay to the passenger, who filed action for damages
➢ SC: The paramount concern of the airline is the safety of passengers
■
Delay without the fault of the company cannot grant damages
CHAPTER VI - Wills and Successions
Wills
❖
Types
❖
❖
Rules
❖
Solemn, revocable, formal disposal or distribution of a testator’s property and rights, taking effect after his death
Holographic will
➢ Written instrument by the testator himself duly dated, paged, and signed by himself
Notarial will
➢ By way of intervention of notary public
➢ Requires the presence of at least three witnesses with attestation clause
No will can be transferred without the procedure of probate of will
Probate of will, Stages
❖ Determination of extrinsic validity (Formal requirements)
➢ Whether the execution of the will complied with the formalities of the law
➢ The law provides for a strict performance of formal requisites
➢ This results to res judicata
■
Courts determine if the testator complied with formalities. This results into finality
❖ Determination of successional rights (intrinsic validity)
➢ If there are other properties later on to be discovered based on the will itself, it will not result into res judicata
■
Unless there is final distribution, this part will not result into res judicata
❖ Final distribution of estate
❖
❖
Execution
Based on the law of the place where it was executed, just like any contract.
Authentication
❖ The will is subject to authentication and probate
Foreign wills
❖ Can they be accepted or probated?
➢ Yes. Provided, that there is proper authentication of the will by our own courts
➢ If it is authenticated under foreign law, then it is authenticated in ours
Tayag v. Benguet Consolidated Corporation
❖ Domiciliary case
➢ The place of domicile where the bulk of the properties of the estate are located
❖ Domiciliary administrators have no authority beyond their territorial jurisdiction
➢ Distribute properties within that territory
❖ Ancillary administrators
➢ Also have no authority beyond their territorial jurisdiction
❖ In the case:
➢ The domiciliary administrator did not comply. Therefore, the court ordered that another certificate of stocks be
issued.
➢ Domiciliary administrator may have the bulk of the estate, but does not have territorial jurisdiction over that of
the ancillary administrator.
■
The act of the ancillary administrator is valid
Chapter VII - Property
Recall: applicable law is where the contract was executed
❖ XPN: law of where the property is the governing law
❖ Lex rei sitae
Two kinds of properties:
❖ Immovable - those deemed included; others not included are movable
➢ LTESMMAC
❖ Movable
Real properties
❖ GR: Cannot be acquired by aliens
❖ XPN: BP 185; former Filipinos may acquire by hereditary succession
➢ Maximum of 1000sqm (Urban), 1 ha. (rural)
➢ With BPI certification, can acquire property up to 5000sqm (urban), 3 ha. (rural)
CASE: The Holy See v. Rosario
❖ Holy See acquired property with the condition to put up a church. This was not complied with because there were too
many squatters. The acquisition was also alleged to be violative of the Constitution.
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❖
SC: it is not the fault of the Holy See when it failed to put up the Church. There were objections on the part of the
squatters. It is beyond their capacity.
➢ The Holy See, despite being a foreigner, can acquire property, because they have diplomatic immunity.
Real Property situated in another country
❖ CASE: Gov’t of the Phil. is trying to sell the Roppongi Estate in Japan. It was given to the Philippines as payment for
reparation during the war.
➢ It was being used by RP as the consular office. However, due to the shortage of dollars, they tired to sell the
property. They asked for the opinion of the DOJ.
■
The DOJ agreed that even if it is in another country, it can be sold also under the foreign country’s law
➢ But, it was questioned since being a consular office, it is an extension of RP’s territory, a public domain, and
therefore cannot be sold.
❖ SC: there is no valid sale because the property is of public domain
❖ CASE: Veterans Affairs
➢ The court has the right to adapt the decisions of this agency or agree in toto.
➢ Even if the court has the final judgment, the court may also rely on the decision of the government of the agency
to determine if there is proper issuance of justice.
END OF PRELIMS
Chapter VIII - Torts and Damages
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