Conflict of Laws Notes - Agpalo Book.pdf

Conflict of Laws Notes Main reference: Agpalo, Conflict of Laws

I. INTRODUCTION TO CONFLICT OF LAWS Private International Law - that branch of international law which regulates the comity of states in giving effect in one to the municipal laws of another relating private persons, or concerns the rights of persons within the territory and dominion of one state or nation, 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 laws of another so far as can be done consistently with its own interests Foreign element - a factual situation that cuts across territorial lines and is thus affected by the diverse laws of two or more states Comity - the 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 the rights of its own citizens or of other persons who are under the protection of its laws Lex situs - the applicable law regarding the acquisition, transfer and devolution of the title to property is the law where the property is located Lex fori - the law of the forum, where the case if filed Lex loci actus - the law of the place where the act is done Lex loci celebrationis - the law of the place where the contract is entered into Lex loci contractus - the proper law applicable in deciding the rights and liabilities of the contracting parties Lex loci delictus - the law of the place where the offense or wrong took place Lex loci domicilii - the law of the place of the domicile of the person Lex loci rei sitae (lex situs) - the law of the place where a thing is situated Kilberg doctrine - 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 the issue Center of gravity doctrine (most significant relationship theory; 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

GENERAL RULE: Law of one country has no application and force in another country. Philippine laws have no extraterritorial effect. EXCEPTION: Consent: when our laws provide extraterritorial effect to our laws with respect to citizens and nationals (e.g. extraterritoriality principle of RPC) **But now in PRIL, foreign laws and foreign judgments may be given force and effect in our country, because of the growing inter-dependence of states and on basis of the principle of comity.

2 REMEDIES INVOLVED: 1. Enforcement of rights 2. Recognition and enforcement of foreign judgment

**Conflict of laws presupposes two or more conflicting laws, between a local law and a foreign law involving a foreign

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element or elements, which requires a determination of which law should apply. Is there a conflicts case? A factual situation that cuts across territorial lines and is 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 conception. (Saudi Arabia Airlines vs. CA, G.R. No. 122191, Oct. 8, 1998) The forms in which this foreign element may appear are many. The foreign element may simply consist in the 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. (Saudi Arabia Airlines vs. CA, supra) In the instant case, 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.(Saudi Arabia Airlines vs. CA, supra)

3 WAYS OF SOLVING CONFLICT OF LAWS PROBLEM: 1. Court might refuse to hear the case and dismiss it on ground of lack of jurisdiction or forum non

conveniens 2. Court might decide the case by its own local law 3. Court might decide the case by special rules formulated to address the problem

A. Choice of Law Principles GENERAL RULE: Foreign laws and judgments have no effect in the Philippines EXCEPTION: Consent, express (there is a law) or implied (comity)

B. Characterization and Points of Contact Characterization (Doctrine of Qualification) - process of deciding whether or not the facts relate (refer to the connecting factors) to the kind of question specified in a conflicts rule; to enable the forum to select the proper law

ELEMENTS OF CHARACTERIZATION: 1. Foreign element 2. Points of contact 3. Proper law applicable

TEST FACTORS / POINTS OF CONTACT / CONNECTING FACTORS: 1. Nationality of a person, his domicile, his residence, his place of sojourn, or his origin 2. The seat of a legal or juridical person, such as a corporation 3. 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 4. 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 committd. The lex loci actus is particularly important in contracts and torts

5. The place where an act is intended to come into effect, e.g. the place of performance of contractual duties, or the pace where a power of attorney is to be exercised


6. The intention of the contracting parties as to the law that should govern their agreement, the lex loci intentionis

7. The place where judicial or administrative proceedings are instituted or done. The lex fori - the law of the forum - is particularly important because, as we have seen earlier, 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 fails under one of the exceptions to the application of foreign law

8. The flag of the ship, which in many cases, is decisive of practically all legal relationships of the ship and of its master or owner as such. It also covers contractual relationships particularly contracts of affreightment.

CONFLICTS PROBLEM; JURISDICTION; CHARACTERIZATION; POINTS OF CONTACT; STATE OF THE MOST SIGNIFICANT RELATIONSHIP

Saudi Arabia Airlines vs. CA, G.R. No. 122191, Oct. 8, 1998 FACTS: Morada, a Filipina flight stewardess for SAUDIA, was a attempted raped by Saudia Arabian national crewmembers in Indonesia. She returned to Manila and while there, she was convinced by SAUDIA manager to go to Jeddah and sign some papers, purporting to be release forms in favor of her fellow crewmembers. It turned out that the documents were court summons and orders, trying and finding her guilty of adultery and other violations of Islamic tradition. Upon her release and return to Manila, she filed a case for damages based on Art. 19 and 21 of the Civil Code. HELD: There is a conflicts problem as there is a foreign element involved -- Morada is employed by a resident foreign corporation, an international carrier, and some of the acts complained of occurred in Jeddah. The trial court has jurisdiction over the subject matter -- damage suit based on Art. 19 and 21 -- and over the persons of Morada (plaintiff) and SAUDIA (voluntary submission by filing answer).

For characterization, the point of contact considered is the lex loci actus or the place where the tortuous act causing the injury occurred -- Manila, Philippines since this is where SAUDIA deceived Morada. The State of the Most Significant Relationship rule was also applied, SC holding that the Philippines is where the over-all harm of the injury to the person, reputation, social standing and human rights of Morada had lodged. IN SUM: Morada is entitled to recovery for damages.

C. Choice of Applicable Law 2 IMPORTANT QUESTIONS IN A CHOICE-OF-LAW PROBLEM:

1. What legal system should control a given situation where some of the significant factors occurred in two or more states - solved by characterization

2. To what extent should the chosen legal system regulate the situation PHILIPPINE STATUTORY DIRECTIVES ON CHOICE OF LAW:

1. Personal law - nationality rule Family rights and duties - those which arise from family relations, and include those between husband

and wife, and between parent and child, among other ascendants and their descendants and among brothers and sisters

Status - birth, marriage death, legal separation, annulment of marriage, judgment declaring the nullity of marriage, legitimation, adoption, acknowledgment of natural children, naturalization, loss or recovery


of citizenship, civil interdiction, judicial determination of filiation, voluntary emancipation of a minor and change of name

Condition Legal capacity

2. Property - lex rei sitae

PERSONAL LAW: NATIONALITY RULE; RENVOI DOCTRINE; DOCTRINE OF PROCESSUAL PRESUMPTION

Bellis vs. Bellis, G.R. No. L-23678, June 6, 1967 FACTS: Amos Bellis, a US citizen, died a resident of Texas. He left two wills -- one devising a certain amount of money to his first wife and three illegitimate children and another, leaving the rest of his estate to his seven legitimate children. Before partition, the illegitimate children who are Filipinos opposed on the ground that they are deprived of their legitimes. ISSUE: Whether the applicable law is Texas law or Philippine laws HELD: Applying the nationality rule, the law of Texas should govern the intrinsic validity of the will and therefore answer the question on entitlement to legitimes. But since the law of Texas was never proven, the doctrine of processual presumption was applied. Hence, SC assumed that Texas law is the same as Philippine laws, which upholds the nationality rule. Renvoi doctrine is not applicable because there is no conflict as to the nationality and domicile of Bellis. He is both a citizen and a resident of Texas. So even if assuming the law of Texas applies the domiciliary rule, it is still Texas law that governs because his domicile is Texas.

LEGAL CAPACITY: LAW OF THE PLACE WHERE CONTRACT WAS ENTERED INTO Government vs. Frank, G.R. No. 2935, March 23, 1909 FACTS: In Chicago, Ill., USA, Frank entered into an employment contract as stenographer with the Government. The contract is to be performed in the Philippines. However, upon arrival in the Philippines, Frank left the service. Government thus sued him for the breach. Frank raised the defense of minority, contending that by Philippine laws, he does not have legal capacity to enter into contracts. ISSUE: Whether or not Frank has legal capacity to enter into contracts HELD: It is not disputed that at the time and place of the making of the contract in question, the defendant had full capacity to make the same. No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined by the law of the place where the contract is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought. The plaintiff (defendant) being fully qualified to enter into the contract at the place and time the contract is made, he cannot implead infancy as a defense at the place where the contract is being enforced.


GENERAL RULE: No foreign law may or should interfere with the operation and application of Philippine laws. EXCEPTIONS:

1. When the Philippine Legislature has, by law, given its consent to the extension of a specific foreign law to the Philippines (e.g. COGSA)

2. When Congress enacts a law adopting or copying a specific foreign statute 3. When State enters into a treaty or convention 4. When parties themselves stipulate that foreign law governs their relationship 5. Borrowing Statute - a statute which directs the court of the forum to apply the foreign statute to the

pending claims based on a foreign law 6. When Philippine conflict of laws rule refer to foreign law as applicable law (e.g. nationality principle)

EXCEPTION TO THE BORROWING STATUTE Cadalin vs. POEA, G.R. No. L-104776, Dec. 5, 1994 FACTS: Cadalin et al. are OCWs deployed to various Middle Eastern countries, including Bahrain. Under the contracts, the choice of applicable law is Bahrain law in case of contractual disputes. The contracts were later pre-terminated so Cadalin et al. filed with RTC a case for recovery of unpaid wages, etc. Under Bahrain law, the action has already prescribed. ISSUE: Whether or not Bahrain law should be applied on the question of prescription of action HELD: Statute of limitations is sui generis -- it may be procedural or substantive, depending on the characterization given such a law. This distinction, however, becomes irrelevant when there is a borrowing statute, as in the case of our Rules of Court, which provides that any action barred under the law of the country where the cause of action arose is also barred in the Philippines. But, in this case, SC did not apply our Rules of Court on the ground that doing so would contravene the constitutional provision on protecting the rights of labor. The courts of the forum will not enforce an foreign claims obnoxious to the forums public policy.

D. Agreement on Applicable Law GENERAL RULE: Parties are free to stipulate as to the applicable foreign law to govern their dispute arising from the contract. EXCEPTIONS:

1. Where there is some basis for applying law of the forum (minimum contact) 2. Where plaintiff and defendant are both residents of the forum 3. Where a reasonable reading of the choice of law and forum agreement does not preclude the filing of

the action in the residence of the plaintiff or the defendant BUT if there is no agreement as to applicable law governing contract --

Apply the law of the State of the Most Significant Relationship, taking into account the following CONTACTS: 1. Place of contracting 2. Place of negotiation of the contract 3. Place of performance 4. Location of the subject matter of the contract 5. Domicile, residence, nationality, place of incorporation and place of business of the contracting parties


6.

CHOICE OF LAW ON JURISDICTION TREATED AS CHOICE OF VENUE

HSBSC vs. Sherman, G.R. No. 72494, Aug. 11, 1989 FACTS: A Singaporean company applied with and was granted by the Singapore branch of HSBC an overdraft facility, secured by a Joint and Several Guarantee executed by the formers directors (Filipino residents). In the Guarantee, there is a clause stipulating that jurisdiction over any dispute arising from the transaction is vested with the Singaporean courts. When the Singaporean company defaulted, HSBC filed suit against the directors in the Philippines. ISSUE: Whether or not the choice of law clause should be upheld HELD: Jurisdiction, which finds its source in sovereignty, cannot be bargained away by the parties. The State can assume jurisdiction when there is a reasonable basis of exercising it. To be reasonable, the jurisdiction must be based on some minimum contacts that will not offend traditional notions on fair play and substantial justice. In the present case, the minimum contact considered is the Philippine residence of the private respondents. In assuming jurisdiction, SC held that the parties did not stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. (Because jurisdiction cannot be stipulated upon, the choice of jurisdiction was treated as a choice of venue. And applying thus, the choice of venue is only permissive, in the absence of restrictive words to lend exclusivity to the chosen forum.)

NOTA BENE: When faced with a case that potentially involves the application of Conflict of Laws principles:

First, determine jurisdiction of the forum No jurisdiction Has jurisdiction but refuse to exercise it (forum non conveniens) Has jurisdiction and exercises it - move to second step

Second, determine the foreign element/s involved (factual) No foreign element - apply local law Has foreign element - move to third step

Third, determine existence of conflict of laws No conflict - apply foreign or local law, as case may be Has conflict - move to fourth step

Fourth, determine choice of law (law applicable) Local law Foreign law

II. APPLICATION OF FOREIGN LAW HOW FOREIGN LAW IS GIVEN APPLICATION IN THE PHILIPPINES:

1. By statutory directives (consent of the State) 2. By agreement of the parties 3. By treaty or convention 4. By conflict of laws rule


In their absence -- A. Principles governing Conflict of Law Cases

1. Substance vs. Procedural Principles All matters of procedure are governed by the law of the forum where the case is filed, while matters of substance are governed by the law of the country where the cause of action arose. PROBLEM: Some laws may be treated by one country as procedural and by another country as substantive (e.g. statute of limitations) SOLUTIONS:

Government Interest Analysis - the law of the country whose interest is most impaired by failure to apply its statute should be applied

Borrowing Statute - the law of the country has a statute borrowing the prescriptive period provided in the foreign statute; EXCEPTION: when contrary to public policy or prohibitive laws

2. Center of Gravity Doctrine (Grouping of Contacts Principle or State of the Most Significant Relationship Theory)

Law of the state which has the most significant relationship with the occurrence and with the parties determines their rights and liabilities in tort or in contract

3. 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.

RENVOI DOCTRINE APPLIED Aznar vs. Garcia, G.R. No. L-16749, Jan. 3, 1963 FACTS: Edward Christensen, who at his death was a US citizen but domiciled in the Philippines, left a will, devising unto Maria Helen a certain amount of money and giving the rest of his estate to Maria Lucy. Helen opposed the partition on the ground that she is deprived of her legitime. Her contention is that the law of California directs that the law of the domicile (Philippines) should govern the will. ISSUE: Whether or not the national law or the domiciliary law should apply HELD: The intrinsic validity of wills is governed by the national law of the decedent. In the present case, the national law of Edward is the laws of California. However, there were two conflicting California laws regarding succession. One is enunciated in In Re Kaufman (which does not provide for legitimes) and another is Art. 946 of the California Civil Code (which provides that the law of the domicile applies). SC held that the national law is Art. 946, which is the conflict of laws rule of California. The reason is that In Re Kaufman applies only to residents while Art. 946 is specific to non-residents. Thus, since Art. 946 contains a refer-back to Philippine laws (the law of the domicile), then Maria Helen is entitled to her legitime.

4. Lex Fori The law of the forum governs all matters pertaining to procedural or remedial rights.

B. Applicability of Foreign Laws and its Exceptions Conflict of Laws Page ! 7

WHEN FOREIGN LAW, EVEN THOUGH APPLICABLE, MAY NOT BE GIVEN APPLICATION: 1. Foreign law contravenes prohibitive law or public policy of the forum 2. Relationship of the parties affects public interest 3. Real property is involved (apply lex rei sitae) 4. Foreign law, judgment or contract is contrary to a sound and established public policy of the forum 5. Foreign law is procedural in nature (lex fori governs procedural matters) 6. Foreign law is penal in nature

EXCEPTION: CONTRARY TO SOUND PUBLIC POLICY Bank of America, NT vs. American Realty Corporation, .G.R No. 133876, Dec. 29, 1999 FACTS: Bank of America, duly licensed to do business in the Philippines and existing under the laws of California, USA, granted US Dollar loans to certain foreign corporate borrowers. These loans were secured by two real estate mortgages by American Realty, a domestic corporation. When the borrowers defaulted, Bank of America sued them before English courts. While these cases were pending, Bank of America likewise judicially foreclosed the real estate mortgages in the Philippines. Thus, American Realty sued for damages against Bank of America. ISSUE: Whether or not Bank of America can judicially foreclose the real estate mortgages despite pendency of the civil suits before English courts HELD: English law purportedly allows the filing of judicial foreclosure of mortgage despite pendency of civil suit for collection. But English law was never properly impleaded and proven. Thus, the doctrine of processual presumption applies. SC further held that even assuming arguendo that English laws were proven, said foreign law would still no find applicability. When the foreign law, judgment or contract is contrary to a sound and established public policy of the forum, the said foreign law, judgment or order shall not be applied. Additionally, prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective b laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. The public policy sought to be protected in the instant case is the principle imbedded in our jurisdiction proscribing the splitting of a single cause of action. Moreover, the foreign law should not be applied when its application would work undeniable injustice to the citizens or residents of the forum.

C. Authentication, Electronic Evidence and Judicial Cognizance of Foreign Judgments **To be recognized by Philippine courts, foreign laws and judgments must be alleged and proved.

HOW FOREIGN PUBLIC DOCUMENTS ARE PROVED: 1. Official publication 2. Certified true copy or one attested by the officer having the legal custody of the record, or by his deputy,

and accompanied with a certificate that such officer has custody The certificate must 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

Authenticated by his seal of office **If the foreign law or judgment does not comply with the above requirements, it will not be recognized and the Doctrine of Processual Presumption will apply (Philippine courts will assume the foreign law is the same as Philippine laws).


GENERAL RULE: Philippine courts are not authorized to take judicial notice of foreign laws. EXCEPTIONS:

1. Where there are exceptional circumstances when the foreign laws are already within the actual knowledge of the court (generally known or actually ruled upon in a prior case)

2. Where the courts are familiar with the specific foreign laws (e.g. Spanish civil law) 3. Where the adverse party did not dispute the application of foreign law 4. Where the tribunal is a quasi-judicial body which is not bound by strict rules of technicality

III. CITIZENSHIP AND DOMICILE A. Nationality Principle

The law of country where a person is a national governs his family rights and duties, status, condition and legal capacity. - As opposed to domiciliary principle which applies the law of the country of domicile

B. Citizenship and Modes of Acquisition Citizenship status of being a citizen of a state who owes allegiance to the state and is entitled to its protection and to the enjoyment of civil and political rights therein

WHO ARE CITIZENS: 1. Natural persons

Those who are citizens of the Philippines at the time of adoption of the 1987 Constitution Those whose fathers or mothers are citizens of the Philippines Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon

reaching the age of majority Those who are naturalized in accordance with the law

2. Juridical persons 60% Filipino-owned 2 MODES OF ACQUIRING PHILIPPINE CITIZENSHIP:

1. By blood (jus sanguinis) natural-born citizens 2. By naturalization naturalized citizens

JUS SANGUINIS Valles vs. COMELEC, G.R. No. 137000, Aug. 9, 2000 FACTS: Rosalind Ybasco Lopez was born on May 16, 1934 in Australia to a Filipino father and an Australian mother. In 1949, at the age of fifteen, she left Australia and came to settle in the Philippines, where she later married a Filipino and has since then participated in the electoral process not only as a voter but as a candidate, as well. In the May 1998 elections, she ran for governor but Valles fileda petition for her disqualification as candidate on the ground that she is an Australian. ISSUE: Whether or not Rosalind is an Australian or a Filipino HELD: The Philippine law on citizenship adheres to the principle of jus sanguinis. Thereunder, a child follows the nationality or citizenship of the parents regardless of the place of his/her birth, as opposed to the doctrine of jus soli which determines nationality or citizenship on the basis of place of birth. The herein 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. The fact that she holds an Australian passport and alien registration certificate is an assertion of her Australian citizenship but not a renunciation of her Philippine citizenship. Moreover, by filing her certificate of candidacy, she has effectively renounced her Australian citizenship.

C. Election of Citizenship PROCEDURE:

Express such intention in a statement to be signed and sworn to by the party concerned before any officer authorized to administer oath

File the sworn statement, together with oath of allegiance to the Philippine Constitution, with the nearest civil registry

**The election must be made within reasonable time (3 years) from reaching the age of majority. D. Dual Citizenship

Dual Citizenship the status of a person who is a citizen of two or more countries at the same time WHO MAY POSSESS DUAL CITIZENSHIP:

1. Those born of Filipino fathers and/or mothers in foreign countries which follow the principle of jus soli 2. Those born in the Philippines of Filipino mothers and alien fathers if by the laws of their fathers country

such children are citizens of that country 3. Those who marry aliens if by the laws of the latters country the former are considered citizens, unless by

their act or omission they are deemed to have renounced Philippine citizenship 4. Those who retained or reacquired their Philippine citizenship under RA 9225 after having been naturalized

in a foreign country GENERAL RULE: Dual citizenship is retained. EXCEPTION: The person expressly renounces his other citizenship by filing a certificate of candidacy or by accepting an appointive position in government.

DUAL CITIZENSHIP AS GROUND FOR DISQUALIFICATION FROM OFFICE; FILING OF CERTIFICATE OF CANDIDACY AS EFFECTIVE RENUNCIATION OF AMERICAN CITIZENSHIP

Mercado vs. Manzano, G.R. No. 135083, May 26, 1999 FACTS: Mercado and Manzano are both running for vice-mayor of Makati City. Manzano got the highest number of votes but his proclamation was suspended in view of a pending petition for his disqualification on the ground that he is an American citizen. Manzano is born in 1955 of Filipino father and mother. However, since he is born in the US, he is considered as an American under the jus soli doctrine. Upon his return to the Philippines, he is registered as a foreigner with the Bureau of Immigration. ISSUE: Whether or not Manzano is disqualified on ground that he is an alien HELD: Manzano is a dual citizen, but his being such does not disqualify him from running for public office. Under the LGC, what is prohibited is dual allegiance and not dual citizenship. The two terms are different. Dual allegiance refers to a situation in which a person simultaneously owes, by some positive act,


loyalty to two or more states. 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. Moreover, Manzano is considered to have renounced his American citizenship by filing his certificate of candidacy.

E. Loss and Reacquisition of Philippine Citizenship HOW PHILIPPINE CITIZENSHIP IS LOST:

1. By naturalization in a foreign country (prior to RA 9225) 2. By express renunciation of citizenship 3. By subscribing to an oath of allegiance to support the constitution or laws of a foreign country 4. By accepting commission in the military, naval or air service of a foreign country 5. By cancellation of the certificate 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 EXPRESS RENUNCIATION OF PHILIPPINE CITIZENSHIP

Yu vs. Defensor-Santiago, G.R. No. L-83882, Jan. 24, 1989 FACTS: Petitioner is a Portuguese national who acquired Philippine citizenship by naturalization. However, despite his naturalization, he still applied for and was issued a Portuguese passport and declared his nationality as Portuguese in commercial documents he signed. ISSUE: Whether petitioners acts constitute renunciation of his Philippine citizenship HELD: Express renunciation means a renunciation that is made known distinctly and explicitly and not left to inference or implication. Petitioner, with full knowledge, and legal capacity, after having renounced his Portuguese citizenship upon naturalization as a Philippine citizen resumed or reacquired his prior status as a Portuguese citizen, applied for a renewal of his Portuguese passport. To the mind of the court the foregoing acts considered together constitute an express renunciation of petitioners Philippine citizenship acquired through naturalization.

HOW PHILIPPINE CITIZENSHIP IS REACQUIRED: 1. By direct act of Congress 2. By naturalization take the oath of allegiance to the Republic (RA 9225) 3. By administrative repatriation take the oath of allegiance to the Republic and register the same in the

local civil registry of the place where person resides or last resided; original citizenship is recovered

REPATRIATION

Bengson III vs. HRET, G.R. No. 142840, May 7, 2001 FACTS: Respondent Cruz was a natural-born Filipino who lost his Philippine citizenship when he enlisted in the US Marine Corps and subsequently became a naturalized American. When he returned to the Philippines, he reacquired his Philippine citizenship through repatriation. Later, he ran for a seat in Congress and won. But Bengson III questioned his election into office on the ground that he was not a natural-born Filipino. ISSUE: Whether or not Cruzs repatriation resulted in his reacquisition of his status as natural-born


Filipino HELD: Repatriation results in the recovery of the original nationality. This means that a naturalized Filipino who lost his citizenship will be restored to his prior status as a naturalized Filipino citizen. On the other hand, if he was originally a natural-born citizen before he lost his Philippine citizenship, he will be restored to his former status as a natural-born Filipino. In respondent Cruzs case, he lost his Filipino citizenship when he rendered service in the Armed Forces of the United States. However, he subsequently reacquired Philippine citizenship under RA 2630. Having thus taken the required oath of allegiance to the Republic and having registered the same in the Civil Registry of Magantarem, Pangasinan in accordance with the aforecited provision, respondent Cruz is deemed to have recovered his original status as a natural-born citizen, a status which he acquired at birth as the son of a Filipino father. It bears stressing that the act of repatriation allows him to recover, or return to, his original status before he lost his Philippine citizenship.

F. Citizenship by Naturalization 3 MODES OF NATURALIZATION:

1. Administrative naturalization - available only to aliens born and residing in the Philippines 2. Judicial naturalization 3. Legislative naturalization

QUALIFICATIONS FOR ADMINISTRATIVE NATURALIZATION: (RA 9139) 1. Must be born in the Philippines and residing therein since birth 2. Must not be less than 18 years old at the time of filing the petition 3. Must be of good moral character and believes in the underlying principle of the Constitution and must have

conducted himself in an irreproachable manner during the entire period of residence 4. Must have received his primary and secondary education in any public school or private educational

institution 5. Must have a known trade, business, profession or lawful occupation 6. Must be able to read, write and speak Filipino or any of the dialects of the Philippines 7. Must have mingled with the Filipinos and evinced a sincere desire to learn and embrace the customs,

traditions and ideals of the Filipino people GROUNDS FOR CANCELLATION:

1. Made any false statement or misrepresentation or committed any violation of law, rules or regulation in connection with the petition for naturalization

2. Within 5 years next following the grant of Philippine citizenship, established permanent residence in a foreign country - covers the wife and children as well

3. Allowed himself to be used as a dummy in violation of any constitutional or legal provision requiring Philippine citizenship - covers the wife and children

4. Committed any act inimical to national security - covers the wife and children G. The Lex Domicilii Rule

Lex domicilii (Domiciliary principle) - the law of the place of domicile governs Domicile - place of habitual residence; 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

ELEMENTS: 1. Physical presence 2. Animus manendi - intention of returning there permanently


**The law of the forum governs the standards of domicile. If domicile is put in issue, the court will apply its own laws to determine the controversy.

H. Kinds of Domicile 3 KINDS:

1. Domicile of origin or by birth 2. Domicile of choice 3. Domicile by operation of law

I. Rules regarding Domicile 3 RULES:

A man has a domicile somewhere A domicile once established remains until a new one is acquired A man can have but only one domicile at a time

HOW A NEW DOMICILE IS ACQUIRED: 1. Actual removal or actual change of domicile 2. Bona fide intention of abandoning the former place of residence and establishing a new one 3. Acts which correspond with such purpose

**All the foregoing elements must be proved in order to rebut the presumption of Continuity of Domicile.

J. Domicile and Residence

Residence - the actual relationship of an individual to a certain place; physical presence of a person in a given area, community or country

Residence vs. Domicile 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 ma have a residence in one place and a 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 by any means necessarily so since no length of residence without intention of remaining will constitute domicile. (Romualdez-Marcos vs. COMELEC, G.R. No. 119976, Sept. 18, 1995)

DOMICILE FOR ELECTION PURPOSES Romualdez-Marcos vs. COMELEC, supra FACTS: Petitioner Imelda Marcos filed her certificate of candidacy (COC) for the position of Representative of the First District of Leyte. She stated in the COC that she is a resident of the place for seven months. Private respondent Montejo subsequently filed a Petition for Cancellation and Disqualification on the ground that Imelda failed to meet the constitutional requirement of one-year residency. COMELEC granted the Petition for Disqualification, holding that Imelda is deemed to have abandoned Tacloban City as her place of domicile when she lived and even voted in Ilocos and Manila. ISSUE: Whether or not Imelda is deemed to have abandoned her domicile of origin HELD: An individual does not lose his domicile even if he has lived and maintained residence in different places. Residence implies a factual relationship to a given place for various purposes. The absence


from legal residence or domicile to pursue a profession, to study or to do other things of a temporary or semi-permanent nature does not constitute loss of residence. Thus, the assertion that she could not have been a resident of Tacloban City since childhood up to the time she filed her certificate of candidacy because she became a resident of many places flies in the face of settled jurisprudence in which this Court carefully made distinctions between (actual) residence and domicile for election purposes.

K. Nationality and Domicile of Corporations **The nationality of a private corporation is determined by the character or citizenship of its controlling stockholders. **The domicile of a domestic corporation is its principal place of business (contained in the AOI). For foreign corporations, their domicile is in the country under whose laws they are incorporated. 2 TESTS TO DETERMINE FILIPINO CORPORATION:

1. Grandfather rule - governs the strict application of the ownership of a corporation (generally 60% Filipino-owned)

2. Control test - a corporation that is at least 60% Filipino-owned is considered a Filipino for purposes of determining the Filipino ownership of a corporation whose nationality is put in issue

CORPORATION DOMICILED IN ONE STATE BUT DOING BUSINESS IN ANOTHER IS A RESIDENT OF THE LATTER

Northwest Orient Airlines, Inc. vs. CA, G.R. No. 112573, Feb. 9, 1995 FACTS: Northwest, a US corporation, and Sharp, a Filipino corporation but with a branch in Japan, entered into an agreement whereby the former authorized the latter to sell its air transportation tickets. Sharp, however, was unable to remit the proceeds of the ticket sales, prompting Northwest to sue for collection in Japan. Summons was served on Sharps branch office in Japan but because the manager authorized to receive summons was said to be in Manila, the same was also served on Sharps Manila head office through diplomatic channels. Sharp nevertheless failed to appear during the hearing and judgment was rendered. Northwest now filed a case before the Philippine court to enforce the foreign judgment. ISSUE: Whether or not the Japanese court acquired jurisdiction over the person of Sharp

HELD: The domicile of a corporation belongs to the state where it was incorporated. In a strict technical sense, such domicile as a corporation may have is single in its essence and a corporation can only have one domicile which is the state of its creation. 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. In as much as Sharp was admittedly doing business in Japan through its duly registered branches at the time the collection suit against it was filed, then in the light of the processual presumption, Sharp may be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts lawful methods of serving process.

FOREIGN CORPORATION DOING BUSINESS IN THE PHILIPPINES IS A RESIDENT


State Investment House, Inc. vs. Citibank, et al, G.R. No. 79926-27, Oct. 17, 1991 FACTS: 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 latter with writs of preliminary attachment. Subsequently, the three banks jointly filed with the court a petition for involuntary insolvency of CMI. SHI and SFCI opposed the petition on the ground that the petitioners are not resident creditors in contemplation of the Insolvency Law. ISSUE: Whether or not a foreign corporation with a branch in the Philippines and doing business therein can be considered a resident HELD: Foreign corporations duly licensed to do business in the Philippines are considered residents of the Philippines, as the word is understood in Sec. 20 of the Insolvency Law, authorizing at least three resident creditors of the Philippines to file a petition to declare a corporation insolvent. The Tax Code declares that the term resident foreign corporation applies to foreign corporation engaged in trade or business within the Philippines as distinguished from a non-resident foreign corporation which is not engaged in trade or business within the Philippines. The Offshore Banking Law sates that: Branches, subsidiaries, affiliates, extension offices or any other units of corporation or juridical person organized under the laws of any foreign country operating in the Philippines shall be considered residents of the Philippines. The General Banking Act places branches and agencies in the Philippines of foreign banks in the category as commercial banks, rural banks, stock savings and loan association making no distinction between the former ad the latter in so far as the terms banking institutions and banks are used in said Act.

IV. CONTRACT A. Lex Loci Contractus

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 interpretation. EXCEPTIONS:

1. When parties agree as to the choice of law 2. Lex rei sitae - in case of contracts affecting land or title thereto

**Lex loci contractus governs only with respect to the forms and solemnities of the contract (extrinsic validity). Intrinsic validity is generally governed by the national law of the parties.

B. Choice of Law by the Parties and Exceptions GENERAL RULE: The parties to a contract may select the law by which it is to be governed. In adopting a foreign law as choice of law, the foreign law shall be deemed to be incorporated into the contract as a set of terms. EXCEPTIONS:

1. Where the foreign law chosen is contrary to peremptory provisions dealing with matters impressed with public interest

2. Where the relationship of the contracting parties affects public interest in the country of one of the


parties 3. Where the substantial contacts arising therefrom point to the law of another country as the applicable

law

CONTRACT STIPULATION: PHILIPPINE LAW OR LAW OF REGISTRY, WHICHEVER IS HIGHER

Norse Management Co. vs. NSB, G.R. No. L-54204, Sept. 30, 1982 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 apopleptic 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 that Philippine 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: SC held in the affirmative. On the issue that Singapore law was not presented before the NSB, SC held that NSB, being an administrative and quasi-judicial body, is not bound strictly by technical rules It has always been the policy of this Board that in cases of valid claims for benefits on account of injury or death while in the course of employment, the law of the country in which the vessel is registered shall be considered. Moreover, the employment agreement stipulated that compensation shall be paid under Philippine law or the law of registry of the vessel, whichever is higher. Thus, the amount under Singapore law being higher, the same should apply in accordance with the stipulation.

CONTRACT IS LAW OF THE PARTIES Bagong Filipinas Overseas Corp. vs. NLRC, G.R. No. L-66006, Feb. 28, 1985 FACTS: Pancho was hired by Bagong Filipinas Overseas Corp. as an oiler on board the M/V Olivine, a vessel registered in Hong Kong. While the vessel was docked at Gothenberg, Sweden, he suffered a cerebral stroke and was rushed to the hospital. Later, he was repatriated to the Philippines where he died later on. His widow filed for compensation benefits with the NSB, which Board awarded her the disability compensation benefits under the employment contract. NLRC, however, modified the decision and instead applied the law of Hong Kong, awarding a higher amount of benefits to the widow. ISSUE: Whether or not the Hong Kong law should be applied HELD: SC held that the employment contract should be applied, not Hong Kong law. The case of Norse Management 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 the Philippine law or the Workmens Insurance Law of the country where the vessel is registered, whichever is higher. Such stipulation is not found in the employment contract between Pancho and Bagong Filipinas Overseas Corp.


EXCEPTION: WHEN CONTRARY TO PUBLIC POLICY

Pakistan International Airlines Corp. vs. Ople, G.R. No. 61594, Sept. 28, 1990 FACTS: Pakistan International, a foreign corporation licensed to do business in the Philippines, executed two contracts of employment with private respondents for their services as flight stewardess. The contract had a term of three years but also with the stipulation that, notwithstanding any provisions to the contrary, the employer reserves the right to pre-terminate it at any time. Before the expiration of the three-year term, Pakistan International sent notices of dismissal to private respondents, prompting them to file this case for illegal dismissal and recovery of wages and other benefits. ISSUE: Whether or not the stipulation in the contract as to the right of the employer to terminate employees at any time should be respected HELD: SC held in the negative. A contract freely entered into should be respected, 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, NCC, 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 and 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 the 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.

C. No Agreement on Choice of Law If there is no express contract, the courts of the forum will apply any of the conflict of laws rules, such as lex loci celebrationis (see Bagong Filipinas Overseas, supra) or State of the Most Significant Relationship Theory. In cases involving claims of Filipino workers on account of injury or death during employment or in the course of services in a vessel owned by the foreign employer, the law of registry of the vessel, if favorable to the worker, is applied.

D. No Agreement or Treaty The plaintiff makes the choice of the forum, or the court where the action or complaint is filed. Thus, in Saudi Arabia Airlines, infra, 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.

E. Lex Loci Contractus or Place of Performance The law of the country where the contract is to be performed generally governs the liability for breach of contract by the obligor to perform his part of the obligation.

PLACE OF CONTRACTING vs. PLACE OF PERFORMANCE


Triple Eight Integrated Services Inc. vs. NLRC, G.R. no. 129584, Dec. 3, 1998 FACTS: Osdana, a Filipino citizen, was recruited by Triple Eight for employment with the latters principal, Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia. The employment contract (originally as food server but later changed to waitress) was executed in the Philippines but was to be performed in Riyadh. Once in Riyadh, however, Osdana was made to perform strenuous tasks (washing dishes, janitorial work), which were not included in her designation as a waitress. In time, she developed Carpal Tunnel Syndrome, for which she had to undergo surgery and weeks of hospital confinement. But when she returned to work, GCC informed her of her dismissal, allegedly on the ground of illness. ISSUE: Whether or not Osdana was illegally dismissed from work HELD: There was illegal dismissal. GCC argued that the requirement of medical certificate from public health authority was physically impossible to comply with since Osdana was employed in Saudi Arabia and not in the Philippines so there was no way for them to get the alluded medical certificate from a Philippine public health authority. But SC held that the rule simply prescribes a certification by a competent public health authority and not a Philippine health authority. Also, the argument that Saudi Arabia laws should apply is not obtaining. Established is the rule that lex loci contractus (the 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 forums public policy.

F. The Warsaw Convention Otherwise known as the Convention for the Unification of Certain Rules Relating to International Transportation by Air, which took effect on February 13, 1933. ***Where there is a treaty or convention to which the Philippines is a signatory on where an action coming within the purview of such treaty or convention may be filed, the plaintiff must follow the provisions thereof on the matter.

Limited Liability of International Carriers limited to US$20.00 per kilo unless a higher value is declared in advance and corresponding additional charges are paid. EXCEPTIONS:

1. When the airline itself is at fault 2. When the airline or its employees commit wrongful acts or are negligent 3. When there is waiver on the part of the airline 4. When delay is caused by force majeure and the airline is guilty of neglect or malfeasance (even if not

negligent, airline is still duty-bound to ensure the comfort and convenience of its stranded passengers)


WARSAW CONVENTION IS CONSTITUTIONAL; PLACE OF DESTINATION vs. AGREED STOPPING PLACE; WHERE ACTION FOR DAMAGE MAY BE FILED

Santos III vs. Northwest Orient Airlines, G.R. No. 101538, June 23, 1992 FACTS: Petitioner is a minor resident of the Philippines. Private respondent Northwest Orient Airlines (NOA) is a foreign corporation with principal residence in Minnesota, USA and licensed to do business and maintain a branch office in the Philippines. The petitioner purchased from NOA a round-trip ticket in San Francisco, USA. On Dec. 19, 1986, the petitioner checked in at the NOA counter in the San Francisco airport for his departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation for his flight for Tokyo to Manila. He therefore had to be wait-listed. On March 12, 1987, the petitioner sued NOA for damages in RTC Makati. NOA moved to dismiss the complaint on the ground of lack of jurisdiction. ISSUE: Whether or not Art. 28(1) of the Warsaw Convention is in accordance with the Constitution so as to deprive the Philippine courts jurisdiction over the case HELD: Art. 28(1). An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination. SC held that the Warsaw Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country. On the question of jurisdiction, SC found that the foregoing provision of the Warsaw Convention enumerated the four places where an action for damages may be brought. Petitioner contended that since Manila is his place of destination, then the action was properly filed. But SC held otherwise. The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioners ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco to Manila. Manila should therefore be considered merely an agreed stopping place. The contract is a single undivided operation, beginning with the place of departure and ending with the ultimate destination. The use of the singular in this expression indicates the understanding of the parties to the Convention that every contract of carriage has one place of departure and one place of destination. An intermediate place where the carriage may be broken is not regarded as a place of destination.

LIMITED LIABILITY OF INTERNATIONAL CARRIERS: EXCEPTION, AIRLINES NEGLIGENCE Sabena Belgian World Airlines vs. CA, G.R. No. 104685, March 14, 1996 FACTS: Ma. Paula Augustin was a passenger of one of the planes of defendant airlines. Her flight plan was from Casablanca to Manila with stopover in Brussels, Belgium. When she arrived in Manila, she found


that her luggage was missing. After reporting the matter to defendant, she was notified that the Brussels Office of the airlines found it and that they will be shipping it to Manila. However, she was informed that her luggage was lost for the second time. Thus, this claim for damages in an amount equivalent to the value of the luggage. But defendant denied liability, citing Augustins own negligence, and that if they are liable, arguendo, their liability is limited only to US$ 20.00 per kilo due to Augustins failure to declare a higher value. ISSUE: Whether or not the airlines is entitled to limited liability HELD: SC held in the negative. The loss of said baggage of the private respondent happed not only once but twice. This underscores the wanton negligence and lack of care on the part of the carrier. Because of such, this forecloses whatever rights petitioner might have had to the possible limitation of liabilities enjoyed by international air carriers under the Warsaw Convention. Moreover, the prescribed Warsaw Convention limitation on aircraft liability cannot invoked in the case, but rather the domestic law and jurisprudence (the Philippines being the country of destination). It states that the attendance of gross negligence (given the equivalent of fraud or bad faith) holds the common carrier liable for all damages which can be reasonably attributed, although unforeseen, to the non-performance of the obligation, including moral and exemplary damages.

WARSAW CONVENTION NOT ABSOLUTE LIMIT ON EXTENT OF AIRLINES LIABILITY Northwest Airlines vs. CA, G.R. No. 120334, Jan. 20, 1998 FACTS: Rolando Torres, allegedly on a special mission to purchase firearms for the Philippine Senate, purchased a round trip ticket from defendant Northwest Airlines for his travel to Chicago and back to Manila. Via defendants flight, Torres left for the US. After purchasing firearms and upon arrival in Manila, one of the baggages could not be claimed, allegedly because Northwest sent it back to the US for US Customs verification. The baggage was eventually returned but when Torres opened it, the firearms were missing. A Personal Property Missing Damage Report was subsequently filed but Northwest continuously refused to settle the case amicably, thus prompting Torres to file this claim for actual, moral, temperate and exemplary damages and attorneys fees. For its part, Northwest argued that granting, arguendo, the firearms were lost, its liability was limited to $9.07 per pound (or $640 in total) under the Warsaw Convention. ISSUE: Whether or not Northwest is entitled to the limited liability under the Warsaw Convention HELD: SC held that Northwests liability for actual damages may not be limited to that prescribed in Sec. 22(2) of the Warsaw Convention. As held in Alitalia v. Intermediate Appellate Court, the Warsaw Convention does not operate as an exclusive enumeration of the instances of an airlines liability, or as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the Convention. Moreover, slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable to or attended by any willful misconduct, bad faith, recklessness, or otherwise improper conduct on the part of any official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form of resulting injury. The Conventions provisions, in short, do not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees, or for some particular or exceptional type of damage.


WHEN AIRLINE NOT LIABLE: FORCE MAJEURE, EXCEPTIONS Japan Airlines vs. CA, G.R. No. 118664, Aug. 7, 1998 FACTS: On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco, CA bound for Manila. Likewise, on the same day, Enrique Agana, his wife and his daughter left Los Angeles, CA for Manila via JAL flight No. JL 061. As an incentive for traveling on Japan Airlines (JAL), both flights were to make an overnight stopover at Narita, Japan, at the airlines expense, thereafter proceeding to Manila the following day. However, while in Japan, Mt. Pinatubo in the Philippines erupted, causing unrelenting ashfall and rendering NAIA inaccessible to airline traffic. Hence, their flight to Manila was delayed indefinitely. At first, JAL rebooked all the Manila-bound passengers and offered to pay for their hotel expenses for their unexpected overnight stay. However, because of NAIAs indefinite closure, this flight was again cancelled. At this point, JAL informed them that it would no longer defray their hotel and accommodation expenses during their stay in Narita. When they eventually got to Manila, they commenced an action for damages against JAL. ISSUE: Whether JAL, as a common carrier, has the obligation to shoulder the hotel and meal expenses of its stranded passengers until they have reached their final destination, even if the delay were caused by force majeure HELD: The general rule is that a party is not liable if the non-performance is due to force majeure. Since, the eruption of the Mt. Pinatubo is such force majeure, JAL therefore cannot be charged for whatever losses or damages incurred. SC held that to hold JAL, in the absence of bad faith or negligence, liable for the amenities of its stranded passengers by reason of a fortuitous event is too much of a burden to assume. However, SC did not completely absolve JAL from any liability. It must be noted that private respondents bought tickets from the United States with Manila as their final destination. While JAL was no longer required to defray private respondents living expenses during their stay in Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. JAL is not excused from the obligation to make the necessary arrangements to transport private respondents on its first available flight to Manila. After all, it had a contract to transport private respondents from the United States to Manila as their final destination. Consequently, the award of nominal damages is in order.

2-YEAR PRESCRIPTIVE PERIOD DOES NOT APPLY TO TORTS AND WHEN LAPSE IS DUE TO AIRLINES DELAYING TACTICS

United Airlines vs. Uy, G.R. No. 127768, Nov. 19, 1999 FACTS: Willie Uy is a passenger of United Airlines, bound for San Francisco to Manila. While in San Francisco, it was found that one piece of his luggage was over the maximum weight limit, for which a United Airlines personnel rebuked him and in a loud voice, in front of the milling crowd, ordered him to repack his things. But even after repacking, his luggage was still overweight, forcing Willie to pay for the excess with the use of his Miscellaneous Charge Order (MCO). United Airlines, however, refused to honor it on account of some discrepancies in the figures, so Willie had to use his American Express credit card instead. Upon arrival in Manila, he discovered that one of his bags had been slashed and its contents stolen. Willie sent a letter of demand to United Airlines, which only offered to pay him the value of US$9.70 per pound (the limit). Willie, however, rejected the offer and sent two more demand letters, which were ignored, thus prompting him to file a complaint for damages with the Philippine


courts based on tort and the loss of his luggage. United Airlines moved to dismiss the complaint on the ground that it was filed beyond the two-year prescriptive period under the Warsaw Convention. ISSUE: Whether or not the action for damages is barred by prescription HELD: SC held that although the two-year prescriptive period under the Warsaw Convention had already lapsed by the time Willie filed the complaint for damages, this did not preclude the application of pertinent provisions of the Civil Code. Thus, the action for damages could still be filed based on tort which can be filed within 4 years from the time cause of action accrued. As for the action pertaining to the loss of the contents of the luggage, while it was well within the bounds of the Warsaw Convention, SC found that there was an exception the applicability of the 2-year prescriptive period that is when the airline employed delaying tactics and gave the passenger the run-around.

OVERBOOKING OF FLIGHT IS BAD FAITH; LEX LOCI CONTRACTUS LAW OF THE PLACE WHERE TICKET WAS ISSUED GOVERNS

Zalamea vs. CA, G.R. No. 104235, Nov. 18, 1993 FACTS: The Zalamea spouses and their daughter purchased 3 airline tickets from the Manila agent of respondent TransWorld Airlines (TWA) for a flight to New York to Los Angeles. The tickets of the spouses were purchased at a discount of 75% while that of their daughter was a full-fare ticket. All three tickets represented confirmed reservations. Once in New York, however, they found that their flight back to Manila was overbooked, as a result of which they had to be wait-listed. Out of those wait-listed, the ones with full-fare tickets were preferred. Thus, only the Zalamea husband, who was holding his daughters ticket, was able to get on board while his wife and daughter had to wait for the next flight. However, it turned out this next flight was likewise overbooked, forcing the Zalameas to purchase tickets from another airlines. Later, they sued TWA for breach of contract in the Philippines. ISSUE: Whether or not TWA is liable for breach of contract HELD: SC held in the affirmative. Overbooking of flight amounts to fraud or bad faith, entitling plaintiff to an award of moral damages because of bad faith attending the breach of contract. The holding that overbooking was allowed under US Federal regulations was found erroneous because: (1) this regulation was not proved and our courts cannot judicial notice of it, and (2) even if such regulation was proven, the rule of lex loci contractus negated its application. According to this rule, the law of the place where the airline ticket was issued should be applied by the court where the passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant airline. Since tickets were sold and issued in the Philippines, the applicable law in this case would be Philippine law. Under our jurisprudence, overbooking of flight is bad faith. Moreover, the hierarchy of tickets practiced by TWA was evidence of its self-interest over that of its passengers, which SC held to be improper considering the public interest involved in a contract of carriage.


V. SUCCESSION AND PROPERTY SUCCESSION A. Extrinsic Validity and Probate of Wills

Extrinsic validity of wills is governed: 1. By the laws of the country where the decedent is a national 2. By the laws of the country where the will was executed 3. By the laws of the country where the decedent is a resident 4. By Philippine laws

**Intrinsic validity of wills is governed by the national law of the decendent.

REPROBATE OF A WILL

Vda. De Perez vs. Tolete, G.R. No. 76714, June 2, 1994 FACTS: The Cunanan spouses, formerly Filipino but became American citizens and residents of New York, each executed a will also in New York, containing provisions on presumption of survivorship (in case of doubt, husband presumed to have died first). Later, the entire family perished in a fire that gutted their home. Rafael, the trustee of the Cunanan husbands will, filed for separate probate proceedings of both wills. Meanwhile, Salud Perez, the Cunanan wifes mother, filed a petition for reprobate of her daughters will in Bulacan, without notifying the husbands heirs. Rafael opposed the reprobate arguing that New York law should govern and under which law Salud is not an heir but he and his brothers and sisters are. For her part, Salud claimed that she was her daughters sole heir and that two wills were in accordance with New York law. Before she could present evidence to prove New York law, however, the reprobate court disallowed the wills. ISSUE: Whether or not the wills should be allowed HELD: SC held that petitioner should be allowed to present evidence for reprobate of the wills and that notice should be given to Rafael and the other heirs. To allow the wills, proof that both conform to the formalities prescribed by New York laws or by Philippine laws is imperative. Evidence required are as follows: (1) due execution of the will in accordance with the foreign laws; (2) 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. 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 impelled by the fact that our courts cannot take judicial notice of them.


B. Situs of Shares of Stocks

POWER OF ANCILLARY ADMINISTRATOR; ACTUAL SITUS OF SHARES OF STOCK

Tayag vs. Benguet Consolidated, Inc., G.R. No. L-23145, Nov. 29, 1968 FACTS: Idonah Slade Perkins, an American citizen who died in New York City, left among others, two stock certificates issued by Benguet Consolidated, a corporation domiciled in the Philippines. As ancillary administrator of Perkins estate in the Philippines, Tayag now wants to take possession of these stock certificates but County Trust Company of New York, the domiciliary administrator, refused to part with them. Thus, the probate court of the Philippines was forced to issue an order declaring the stock certificates as lost and ordering Benguet Consolidated to issue new stock certificates representing Perkins shares. Benguet Consolidated appealed the order, arguing that the stock certificates are not lost as they are in existence and currently in the possession of County Trust Company of New York. ISSUE: Whether or not the order of the lower court is proper HELD: The appeal lacks merit. Tayag, as ancillary administrator, has the power to gain control and possession of all assets of the decedent within the jurisdiction of the Philippines. There can be 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, an 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, property to be administered in the nature of assets of the deceased liable for his individual debts or to be distributed among his heirs. Probate court has authority to issue the order enforcing the ancillary administrators right to the stock certificates when the actual situs of the shares of stocks is in the Philippines. It would follow then that the authority of the probate court to require that ancillary administrator's right to "the stock certificates covering the 33,002 shares ... standing in her name in the books of [appellant] Benguet Consolidated, Inc...." be respected is equally beyond question. For appellant is a Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful court orders. Our holding in Wells Fargo Bank and Union v. Collector of Internal Revenue finds application. "In the instant case, the actual situs of the shares of stock is in the Philippines, the corporation being domiciled [here]." To the force of the above undeniable proposition, not even appellant is insensible. It does not dispute it. Nor could it successfully do so even if it were so minded.

C. Law on Successional Rights National law of the decedent governs the following:

1. Amount of successional rights 2. Order of succession 3. Intrinsic validity of testamentary provisions

**The foregoing are exceptions to the general rule of lex rei sitae.

PROPERTY


D. Lex Loci Rei Sitae

Lex loci rei sitae governs both real and personal property. But mobilia sequuntur personam (personal property follows the person) still finds application in the sense that wherever a person may be, that is also considered as the situs of his personal property. **Shares of stock where the corporation which issued them is domiciled or is incorporated EXCEPTIONS TO LEX LOCI REI SITAE: 1. A matter which concerns only real property incidentally and which is in reality of a personal nature 2. Treaty

E. Exception to Prohibition on Aliens from Owning Land

HOLY SEE HAS STATUS OF A FOREIGN SOVEREIGN

The Holy See vs. Rosario, Jr., G.R. No. 101949, December 1, 1994 FACTS: A piece of real property was acquired by the Holy See by way of donation from the Archdiocese of Manila. The purpose was to construct the official place of residence of the Papal Nuncio. Later, the Holy See sold the property on condition that it will evict the squatters therein. For failure to comply with the condition, the Holy See was sued. It moved to dismiss on the ground of state immunity. Issue: Whether respondent trial court has jurisdiction over petitioner being a foreign state enjoying sovereign immunity. Held: The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine Government since 1957. The privilege of sovereign immunity in this case was sufficiently established by the memorandum and certification of the Department of Foreign Affairs. The DFA has formally intervened in this case and officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this country. The determination of the executive arm of government that a state or instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive upon the courts. Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in conducting the countrys foreign relations.

F. If Property is Situated in a Foreign Country LEX LOCI REI SITAE DOES NOT APPLY WHEN THERE IS NO CONFLICT OF LAWS SITUATION

Laurel vs. Garcia, G.R. No. 92013, July 25, 1990 FACTS: The Roppongi Property is one of the four properties in Japan acquired by the Philippine government under the Reparations Agreement, as part of the indemnification to the Filipino people for their losses in life and property and their suffering during WWII. The Roppongi property became the site of the Philippine Embassy until the latter was transferred to another site when the Roppongi building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time. After many years, the Aquino administration advanced the


sale of the reparation properties, which included the Roppongi lot. This move was opposed on the ground that the Roppongi property is public in character. For their part, the proponents of the sale raised that Japanese law should apply, following the doctrine of lex loci rei sitae. ISSUE: Whether or not the conflict of law rule on lex loci rei sitae should apply HELD: We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) 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 should apply. In the instant case, none of the above elements exists. The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply. The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no showing that it can be sold?

VI. TORTS AND DAMAGES A. Law Governing Torts

DAMAGES ARISE FROM: 1. Delict or crime 2. Quasi-delict (Tort) 3. Negligence

Lex Loci Delicti the law of the place of where wrong was committed governs the actionable quality or nature of acts causing death or bodily injuries as tortuous **But in order to recover, the tortuous act which ripened in another state must be actionable in the law of the place of wrong and in the law of the forum. 1. Lex Loci Comisii the law of the place where the injury, wrong or death took place governs

FOREIGN LAW MUST BE ALLEGED AND PROVED Wildvalley Shipping Co. LTD. vs. CA, G.R. No. 119602, Oct. 6, 2000 FACTS: The Philippine Roxas, a vessel owned by Philippine President Lines, Inc., arrived in Puerto Ordaz, Venezuela, to load iron ore. After loading, the vessel was about to leave port when Vasquez, an official pilot of Venezuela, boarded the vessel in order to navigate it through the Orinoco River. As the vessel was navigating the Orinoco River with Vasquez as pilot, it ran aground, obstructing the ingress and


egress of vessels, and the vessel of Wildvalley Shipping was unable to sail out of Puerto Ordaz on that day. Claiming damages, Wildvalley Shipping filed an action for damages against Philippine President Lines in the Manila RTC. The trial court held Philippine President Lines liable but, on appeal, CA reversed the decision. ISSUE: Whether or not Venezuelan is applicable to the case HELD: SC held that the pilotage law of Venezuela was not alleged or properly proven. A photocopy of the Gaceta Oficial (where the said law was published) was presented in evidence as an official publication of the Republic of Venezuela. Likewise, only a photocopy of the rules on piloting the Orinoco River, as published in a book issued by the Ministerio de Comunicaciones of Venezuela. As foreign public documents, there should have been a certificate that Captain Monzon, the attesting officer, is the officer who had legal custody of those records 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 Venezuela, and authenticated by the seal of his office accompanying the copy of the public document. No such certificate could be found in the records of the case. In the absence of pleading and proof, the laws of a foreign country, or state, will be presumed to be the same as the domestic law and this is known as processual presumption. Thus, applying the Civil Code, there being no contractual obligation, the master of the Philippine Roxas is obliged to give only the diligence required of a good father of the family. This was exercised by showing that the vessel sailed only after the main engine, machineries, and other auxiliaries were checked and found to be in good running condition; when the master left a competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating the Orinoco River; when the master ordered the inspection of the vessels double bottom tanks when the vibrations occurred anew.

2. State of the Most Significant Contacts Rule (see Saudi Arabia Airlines, infra) 3. Agreement of the Parties as to Applicable Law

CONTRACT STIPULATION NOT SUPERIOR TO LAW Suzara vs. Benipayo, G.R. No. L-57999, Aug. 15, 1989 FACTS: Filipino seamen, petitioners; Magsaysay Lines, Inc., private respondent. Petitioners seamen entered into a contract of employment with private respondent which was verified and approved by the National Seamen Board (NSB). In the port of Vancouver, petitioner, through a special agreement, received additional wages under rates prescribed by the International Transport Workers Federation (ITF). Alleging that petitioners used force and violence in extracting the additional wages under the special agreement, private respondent filed a complaint against them with the NSB. Later in Nagoya, Japan, petitioners were made to sign an agreement in consideration of the dismissal of the case filed against them in the NSB. It appeared that the line which amount/s was/were received and held by crew members in trust for shipowners was inserted, therein, thereby making it appear that the amount given to the petitioners representing the increase in their wages based on ITF rates were only received by them in trust for the private respondent. When the vessel reached Manila, the private respondent demanded from the petitioners the overpayments made to them in Canada. ISSUE: Whether or not the petitioners are entitled to the amounts they received from private respondent representing additional wages as determined in the special agreement HELD:


SC held in the affirmative. The Court found nothing to show for the alleged force and violence employed by petitioners to secure the special agreement in Vancouver, Canada. There was no need for any form of intimidation coming from the Filipino seamen because a strong Canadian labor union, backed by an international labor federation, was actually doing all the influencing. Moreover, when the petitioners entered into separate contracts between 1977-1978, the monthly minimum basic wage for able bodied seamen ordered by NSB was still fixed at US$130.00, whereas as early as 1976, the ILO already set the minimum basic wage at US$187.00. Even so, it was only in 1979 that NSB adopted this international wage rate in its memorandum circular. Thus, it is not the fault of the petitioners that NSB not only violated the Labor Code which created it and the Rules and Regulations Implementing the Labor Code but also seeks to punish the seamen for a shortcoming of the NSB itself. As for the allegedly inserted line in the agreement executed in Japan, SC found that it was an intercalation added after execution of the agreement, and thus, not binding. (NOTA BENE: It is clear from this case that in controversies between workers and their foreign employers, Philippine agencies and the courts should take the workingmens interest and that of the nation as a whole. This policy on labor protection is deemed read into any labor contract.)

B. Overseas Employment of Filipino Workers GENERAL RULE: Law of the country where the physical injury or death of a person occurred governs the liability of the person responsible thereof or of the employer of the injured or deceased person, as well as the amount of compensation which the injured or the heirs would be entitled.

1. Kilberg Doctrine the forum is not bound by the law of the place of death as to the limitation on damages for

wrongful deaths because such rule is procedural and hence the law of the forum governs on this issue

LAW OF THE FORUM GOVERNS LIMITATION ON DAMAGES

Eastern Shipping Lines vs. POEA, 166 SCRA 533 (1988) FACTS: Vitaliano Saco, the Chief Officer of a ship, was killed in an accident in Tokyo, Japan. The widow filed a complaint for damages against Eastern Shipping Lines with the POEA, based on Memorandum Circular No. 2 issued by the latter. This circular prescribed a standard contract to be adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen for overseas employment. Eastern Shipping Lines questioned the validity of the memorandum circular and contended that Saco is not an OFW but a domestic employee and, as such, is entitled only to the death benefits under the Labor Code (lower amount). ISSUE: Whether or not the widow is entitled to the death benefits under Memorandum Circular No. 2

HELD: On the issue of validity of the memorandum circular, SC held that it was valid. The law creating the POEA, provides, among others, that it shall have original and exclusive jurisdiction over all cases, including money claims, involving employer-employee relations arising out of or by virtue of any law or contract involving Filipino workers for overseas employment, including seamen. Clearly then POEA has such delegated power to promulgate the questioned circular, as an exception to the Non-delegation Principle.


As to whether Saco is an OFW, SC found that Eastern Shipping Lines performed at least two acts which constitute implied or tacit recognition of the nature of Sacos employment at the time of his death in 1985. The first is its submission of its shipping articles to the POEA for processing, formalization and approval in the exercise of its regulatory power over overseas employment under EO 797. The second is its payment of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers. It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers. These payments will not preclude allowance of the private respondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under Memorandum Circular No. 2, Series of 1984.

EMPLOYERS HAVE RESPONSIBILITY TO ENSURE EMPLOYEES CLAIM FOR INSURANCE IS ALLOWED; CONTRACTS FAVORABLE TO EMPLOYEES ARE VALID, EVEN IF NOT APPROVED BY POEA

Seagull Maritime Corp. vs. Balatongan, G.R. No. 82252, Feb. 28, 1989 FACTS: A crew agreement was

Documents

Conflict of Laws Notes - Agpalo Book.pdf