PERSONAL STATUS AND CAPACITY

BASIC PRINCIPLES PERSONAL STATUS is the general term that includes both condition and capacity and embraces such matters as the beginning and end of human personality, capacity to have rights, capacity to engage in legal transactions, protection of personal interests, family relations and succession. In Roman Law: Status is comprised of status libertates (freedom), status civitates (citizenship) and status familiae (family relations)

ART 37 NCC 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.

RECTO v. HARDENFacts: H engaged the services of R, as counsel in her suit against her husband for support and for preservation of her rights in the conjugal partnership in contemplation of a divorce suit. However, the spouses entered into a compromise agreement to defeat the claim of R in attorneys fees. H moved to dismiss on the ground of invalidity of the contract of service because divorce is contrary to Phil law.

HELD: R should be paid his fees. H spouses are US citizens and their status and the dissolution thereof are governed by the laws of the United States, which sanction divorce. Therefore, contract is not contrary to public policy.

Status once established by once personal law is given universal recognition. Aliens can sue and be sued in our courts subject to our procedural rules but the law to be applied is their personal law.

CONCEPT OF PERSONALITY German law: begins with the completion of a person's birth Spanish Civil Code: requires that the infant be alive for 24 hours to acquire personality

ART 40 NCC 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 Art

ART 41 NCC For civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother's womb. However, if the fetus 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.

ART 42 NCC 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.

GELUZ v. CA SC did not allow for recovery of damages for the injury and death of a conceived child which is still in the mothers womb. Art 40 cannot be invoked since it expressly limits the provisional personality by imposing the condition that the child should be subsequently born alive.

Civil personality is commenced at birth and is extinguished by death. A declaration of death issued by a competent court is considered valid for all purposes.

LIMJOCO v. INTESTATE ESTATE OF FRAGANTE SC ruled that the estate of a deceased applicant can be granted a CPC to avoid injustice or prejudice resulting from the impossibility of exercising such legal rights & fulfilling such legal obligations of the decedent as survived after his death unless the legal fiction, that the estate is considered a person, is indulged.

ABSENCE PRESUMPTIVE DEATH UNDER THE CIVIL CODE

Art 390. After an absence of seven years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession.

The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of ten years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened.

Art 391. The following shall be presumed dead for all purposes, including the division of the estate among the heirs: (1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane;(2) A person in the armed forces who has taken part in war, and has been missing for four years; (3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

ART 41 OF THE FAMILY CODE A marriage contracted by any person during subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Art 391 NCC, an absence of only two years shall be sufficient.

For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse.

NAME Prof. Beale believed that determination of one's name is not a problem of status since a person is free to assume a name and change it at will. The prevalent view in our jurisdiction is that a persons name is determined by law and can only be changed through court intervention. Arts 364-366 NCC govern use of surnames of children; married women; separated or widowed women. Case law: Change of name has been allowed (a) if the name is ridiculous or tainted with dishonor or difficult to pronounce; (b) to avoid confusion; (c) as a consequence of a new status; (d) pursuant to a desire to adopt a Filipino name and erase a former alien nationality.

AGE OF MAJORITY Determines termination of parental authority In order to determine: CAPACITY to contract and exercise civil rights

INSULAR GOVERNMENT v. FRANK Facts: Insular Govt entered into an employment contract with Frank in Illinois when he was still a minor under Phil law but not under Illinois law. Frank breached the contract so IG sued him.

Held: Illinois law should apply. Matters bearing upon the execution, interpretation and validity of a contract are determined by the law of the place where the contract is made.

CHOICE OF LAW IN FAMILY RELATIONS

PHILIPPINE POLICY ON MARRIAGE AND FAMILY

Art XV, Section 2 of the ConstitutionMarriage, as an inviolable social institution, is the foundation of the family and shall be protected by the State.

Art 220 NCC In case of doubt, all presumptions favor the solidarity of the family. Thus, every intendment of law or facts leans toward the validity of marriage, the indissolubility of the marriage bonds, the legitimacy of children, the community of property during marriage, the authority of parents over their children, and the validity of defense for any member of the family in case of unlawful aggression.

EXTRINSIC VALIDITY OF MARRIAGE Law of the place of celebration Art 2 of the Hague Convention on Celebration and Recognition of the Validity of Marriage

APT v. APT FACTS: The marriage of the Apts (both Germans) was celebrated in Argentina by proxy. The wife, a domiciliary of England, filed a petition for the nullification of their marriage on the ground that proxy marriages are not valid in England. It is, however, valid in Argentina.

HELD: The marriage is valid. The English law on marriage is locus regis actum. If a marriage is good by the laws of the country where it is effected, it is good all the world over, no matter whether the proceeding or ceremony which constituted marriage according to the law of the place would or would not constitute marriage in the country of domicile of one or other of the spouses. Since the marriage was performed in Buenos Aires and in accordance with its laws, and since proxy marriage is only a form of the ceremony and not an essential requisite, the marriage should be upheld.

Art 26. of the Family Code: All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under: (1) Art 35 (1) marriage between minors even with consent of parents (2) Art 35(4) bigamous or polygamous marriages (except those under Art 41) (3) Art 35 (5) contracted with mistake as to the identity of the contracting party (4) Art 35 (6) subsequent marriage without registering decree of nullity of former marriage with the civil registry (5) Art 36 psychological incapacity (6) Art 37 and Art 38 - incestuous marriages

Art 3. The formal requisites of marriage are: (1) Authority of the solemnizing officer; (2) A valid marriage license except in the cases provided for by law; and (3) A marriage ceremony

ADONG V. CHEONG SENG GEESC ruled that to establish a valid foreign marriage pursuant to this comity provision, it is first necessary to prove before the Philippine courts the existence of the foreign law as a question of fact, and it is then necessary to prove the alleged foreign marriage by convincing evidence.

Statutes intended to validate what otherwise void or invalid marriages, being curative, will be given retroactive effect.

PEOPLE V. MORA DUMPO The Court formulated that there is no general statement regarding the requisites necessary for the validity of a marriage between Moros according to Mohammedan rites. This is a fact which must be subject to proof in every particular case.

It is an essential element in bigamy that the 2nd marriage have all the essential requisites of a valid marriage. It appearing that the 2nd marriage cannot be considered as such, there is no justification to hold her guilty of bigamy.

WONG WOO YU V. VIVO Art 15 NCC also provides that laws relating to family rights or to the status of persons are binding upon citizens of the Philippines, even though living abroad, and it is well-known that in 1929 in order that a marriage celebrated in the Philippines may be valid it must be solemnized either by a judge of any court inferior to the Supreme Court, a justice of the peace, or a priest or minister of the gospel of any denomination duly registered in the Philippine Library and Museum (Public Act 3412, Section 2). Even if we assume, therefore, that the marriage of petitioner to Perfecto Blas before a village leader is valid in China, the same is not one of those authorized in our country.

INTRINSIC VALIDITY OF MARRIAGE Capacity to marry Consent Public policy of the State

Incestuous marriages Marriage between 1st cousins = against public policy In other countries = acceptable Canon law allows 1st cousins to marry upon securing dispensation to marry Hague Convention on the Validity of Marriages allows a contracting State to refuse recognition of a marriage if: One spouse was already married Spouses are related to one another by blood or adoption Had not obtained the minimum age or acquired the necessary dispensation Lack of mental capacity Did not freely consent to the marriage

SOTTOMAYOR V. DE BARROS FACTS: Sottomayor and de Barros are both Portuguese and first cousins. Under Portuguese law they are incapable of contracting marriage. They were married in London. Sottomayor filed a petition to have the marriage declared invalid.

HELD: The marriage is invalid. The law of a country where marriage is solemnized must decide all questions relating to the validity of the ceremony by which the marriage is alleged to have been constituted; but as regards questions on personal capacity, it must depend on the law of the domicile, and if the laws of any country prohibit its subjects within certain degrees of consanguinity from contracting marriage and treats such as incestuous, this imposes on the subjects a personal incapacity which continues to affect them so long as they are domiciled in said country and renders such marriage invalid wherever it may have been solemnized.

IN RE MAYS ESTATE FACTS: Fannie is Sams niece by half-blood; they are both Jewish and NY residents. NY prohibits marriage between uncle and niece, so they went to Rhode Island, where such marriage is also prohibited except where the parties are Jewish (the Jewish faith allow such marriages). After the ceremony they went back to NY to live there.

HELD: The marriage is valid. The legality of a marriage between persons sui juris is to be determined by the law of the place where it is celebrated. The general principle is that the rights dependent upon nuptial contracts are to be determined by the lex loci, subject to 2 exceptions: 1) cases within the prohibition of positive law, and 2) cases involving polygamy or incest in a degree regarded generally as within the prohibition of natural law. As to the first exception, there is no positive law in New York which serves to interdict the marriage in Rhode Island of Sam and Fannie, and as to the second exception, their marriage was not offensive to the public sense of morality, it being allowed by the Jewish faith.

EFFECTS OF MARRIAGE Personal Relations of the Spouses Art 69, FC joint right to fix the domicile

DJUMANTAN v. DOMINGO Right of an alien spouse of a Filipino to permanently reside in the Philippines lies not in the fact of marriage but in compliance with immigration laws

Property Relations of Spouses Hague Convention on the Law Applicable to Matrimonial Property Regimes Internal law designated by the spouses before the marriage or in the absence thereof in the state where both spouses fix their 1st habitual residence

Art 80 FCIn the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence. This rule shall not apply: (1) Where both spouses are aliens; (2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in the country where the property is located; and (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity.

DIVORCE AND SEPARATION Divorce may be absolute or limited Court granting a divorce must have personal jurisdiction over the spouses and over the property that it seeks to affect by its decree. Hague Convention Relating to Divorce and Separation of 1902 grant of divorce or separation must comply with the national law of the spouses and the law of the place where the application for divorce is made.

DIVORCE DECREES OBTAINED BY FILIPINOS ABROAD

TENCHAVEZ v. ESCANO FACTS: Vicenta and Pastor were married without the knowledge of her parents. Vicenta went to the US to obtain a divorce, which was granted by the Nevada Court; she married an American and subsequently acquired American citizenship. Pastor sued Vicenta for legal separation and damages. Vicentas defense is that there was a valid divorce issued by the Nevada court.

HELD: The divorce decree obtained in the US is not valid, because at the time it was issued, Vicenta, like Pastor, was still a Filipino citizen. She was then subject to Philippine law. Philippine law cannot recognize a foreign decree of absolute divorce between Filipino citizens, for this would violate declared public policy.

VAN DORN v. ROMILLO FACTS: Van Dorn, a Filipina, married American Upton. Ten years later they were divorced in the US; subsequently, van Dorn remarried. Upton filed an action against Van Dorn in the Philippines, asking for an accounting of certain alleged conjugal properties.

HELD: The divorce decree is valid and binding upon Upton. Even if divorce is not valid in the Philippines for being contrary to public policy, only Philippine nationals are covered by the policy against absolute divorces. Aliens may obtain divorces abroad, which may be recognized in the Philippines provided valid according to their national law.

PILAPIL v. IBAY-SOMERA FACTS: Pilapil and Geiling were married in Germany, but were later divorced. A few months later, Geiling filed a complaint for adultery which was dismissed; it was refiled by the fiscal.

HELD: Geiling has no legal standing to commence the adultery case because the person who initiates the adultery case must be an offended spouse, meaning he must still be married to the accused spouse at the time of the filing of the complaint. Because of the divorce decree, Geiling is no longer the husband of Pilapil; hence he had no more legal standing to commence the adultery case (no longer an offended spouse).

QUITA V. COURT OF APPEALS FACTS: Quita and Padlan were married in the Philippines, but Quita filed for divorce in California which was granted. She remarried twice after the divorce. Upon Padlans death, Quita made claims upon his estate as the surviving spouse and heir of Padlan, alleging that since Padlan was a Filipino citizen, he remained married to her in spite of the divorce decree.

HELD: Quitas right to inherit from Padlan depends on her citizenship at the time the divorce was decreed. If she was no longer a Filipino citizen at the time of their divorce, the divorce would be valid as to her and will be recognized in the Philippines, and she would lose her right to inherit.

OTHER CASES OF NOTE:

REPUBLIC v. IYOY Basingfrom the facts, Fely only became a citizen in 1988 and acquired the divorce in 1984, marryingMicklus a year after. This means that paragraph two of Art 26 cannot be applied in such away that, Fely is not yet considered an alien at the time the divorce was acquired and thereforeshe does not have the capacity to remarry and the marriage is still considered as subsisting. TheCivil Code also provides that Filipino Citizen, with regard tofamily laws and status are governedby Philippine laws regardless of where they are. Fely, being a Filipino Citizen then, is notpermitted by our laws to acquire a divorce decree since such is notrecognized in the Philippines.

REPUBLIC v. ORBECIDO A Filipino (whose Filipina wife obtained a divorce in the US after acquiring US citizenship) was allowed to have the divorce decree recognized in the Philippines

SAN LUIS V. SAGALONGOS SC said that the issue of whether a Filipino who is divorced by his alien spouse abroad may validly remarry in the Philippines considering that Felicidads marriage to Felicisimo was solemnized on June 20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, the SC said that it need not retroactively apply the provisions of the Family Code, particularly Art 26, par. (2) considering that there is sufficient jurisprudential basis allowing the retroactivity of the Family Code.

CORPUZ v. STO. TOMAS (2010) Standing of foreign spouse to have divorce decree recognized in the Philippines

VALIDITY OF FOREIGN DIVORCE BETWEEN FOREIGNERS Hague Convention on the Recognition of Divorce and Legal Separation Foreign divorce will be recognized in all contracting states if at the date of the institution of the proceedings: Respondent or petitioner is a habitual resident or Both spouses were nationals of that state or If only the petitioner is a national, he should have his habitual residence there

No law requires Philippine courts to recognize a foreign divorce between foreigners but it would be recognized under the principle of comity if not against public policy.

ANNULMENT AND DECLARATION OF NULLITY ANNULMENT / NULLITY grounds already exist at the time of the celebration of the marriage Two approaches on the grounds that may be invoked: Follow law of the place of celebration of the marriage Follow the law of marital domicile

BEUMER v. AMORESThe Court had already denied a claim for reimbursement of the value of purchased parcels of Philippine land instituted by a foreigner against his former Filipina spouse. It held that the foreigner cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the prohibition against foreign ownership of Philippine land enshrined under Section 7, Art XII of the 1987 Philippine Constitution.

PARENTAL RELATIONS Legitimacy Depends on the personal law of the father Family Code Arts 163 to 165 Restatement Second: Section 287 Local law of the state where either (a) the parent was domiciled when the childs status of legitimacy is claimed to have been created or (b) where the child was domiciled when the parent acknowledge the child Section 288 incidents of legitimacy created under foreign law will be determined under same principles as Section 287 Parental Authority Patria potestas personal law of the father controls the rights and duties of parents and their children Includes care and rearing of children, custody, discipline and chastisement

ADOPTION Legal/Judicial act that creates a relationship similar to legitimate paternity and filiation Governed by the personal law of the child RA 8552 Domestic Adoption Act of 1998 Applied to adoption by foreigners who have resided at least 3 consecutive years in the PHL Certification of legal capacity to adopt and allowance of entry of adoptee into the adopters country RA 8043 Inter-Country Adoption Act in compliance with the Hague Convention on the Protection of Children and Cooperation in Respect of Inter-Country Adoption Governs adoptions by foreigners ad Filipinos permanently residing abroad

REPUBLIC v. COURT OF APPEALS FACTS: Hughes is married to Lenita, a Filipina who was later naturalized as an American citizen. They filed a petition to adopt the 3 nephews and niece of Lenita, which was granted.

HELD: Hughes is not qualified to adopt since he does not fall under the exceptions in Art. 184 of the Family Code. While Lenita, as a former Filipino, is qualified to adopt under that provision, the adoption decree still cannot be granted because of the requirement in Art. 185 that spouses must jointly adopt. They cannot do this in CAB because Hughes is not qualified under the law.

EFFECTS OF ADOPTION UGGI LINDAMAND THERKELSEN v. REPUBLIC FACTS: Therkelsen (a German) and his wife Erlinda (a Filipino), filed a petition to adopt Erlindas natural child. The application was denied on the ground that an alien cannot adopt a Filipino unless the adoption would make the Filipino minor a citizen of the aliens country.

HELD: The application should be granted. Being a permanent resident here, Therkelsen is not disqualified to adopt under our laws; to deny the application on the above stated ground would be to impose a further requisite on adoptions by aliens beyond those required by law. The citizenship of the adopter is a matter political, not civil in nature, and the ways in which it should be conferred lay outside the ambit of the Civil Code.

NG HIAN v. COLLECTOR OF CUSTOMS FACTS: Marcosa married Ng Chion Te. She adopted his 2 children by a previous marriage and brought one of them to the Philippines to study. The child, Ng Hian, was refused entry into the Philippines.

HELD: Ng Hian may enter the Philippines by virtue of being adopted by one who has a right to do so. In the case of Ex Parte Fong Yim, it was held that a Chinese merchant domiciled in the US has the right to bring into this country with his wife minor children legally adopted by him in China, where it is shown that the adoption was bona fide, and that the children have lived as members of his family and have been supported by him for several years.

CHOICE OF LAW IN PROPERTY

CONTROLLING LAW Immovable property lex situs Movable property variable Lex domicilii Lex situs ex loci actus where the transaction was completed

CAPACITY TO TRANSFER LLANTINO V. CO LIONG CHONG FACTS: The Llantinos leased real property to Chong, a Chinese national (but subsequently naturalized as a Filipino), for 60 years. The Llantinos filed an action to quiet title, claiming that the lease contract was invalid for circumventing the constitutional prohibition on the acquisition of land by aliens.

HELD: The lease contract was valid, and Chong had the right to hold by lease the property involved although at the time of execution of the contract, he was still a Chinese national. In CAB there was no option to buy the leased property in favor of Chong. There is nothing in the record to indicate any scheme to circumvent the constitutional prohibition.

Aliens are not completely excluded by the Constitution from use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights, such as a lease contract which is not forbidden in the Constitution. The only instance where a lease contract may be considered invalid is where there are circumstances attendant to its execution which are used as a scheme to circumvent the constitutional prohibition.

CHEESMAN v. IAC FACTS: Thomas Cheesman (an American) was married to a Filipina, Criselda. The spouses later separated; but Thomas brought this action to annul the sale of real property made by Criselda in favor of Padilla. He alleged that the sale is void for lack of his consent. The property sold was bought by Criselda using her personal funds, and was registered in her name only.

HELD: The sale was valid. He has no capacity to question the sale of the property by his wife on the theory that in doing so he is merely exercising the prerogative of a husband in respect of conjugal property. This would permit indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord to the alien husband an interest and right over the land, which is not granted to him under the Constitution.

EXCEPTIONS TO THE LEX SITUS RULE Where the transaction does not affect transfer of title or ownership of the land (lex intentionis or lex voluntatis)

LILJEDAHL v. GLASSGOW FACTS: Bailey secured a debt payable in Iowa to Liljedahl; as security, he mortgaged his land in Colorado. Bailey sold this land to Glassgow, with the provision in the deed of sale that the grantee agrees to pay the mortgagee. Glassgow sold the land to a third party. Under Iowa law, Glassgow became bound to pay the mortgage, but not under Colorado law.

HELD: Iowa law should apply, and Glassgow should pay Liljedahl. Instruments of conveyance, as they relate primarily to title, are to be construed according to the law of the situs. But personal covenants or agreements in instruments of conveyance will be given effect according to the law of the place where the same is executed and to be performed.

Where real property is offered by way of security for the performance of an obligation mortgage would be governed by lex situs but the loan may be governed by another legal regime Testate or intestate succession national law of the decedent

SITUS OF PROPERTIES For tax purposes:

ASIATIC PETROLEUM v. CO QUICO It is well to emphasize in this connection the general proposition that all property within a State is subject to the jurisdiction of its courts, and they have the right to adjudicate title thereto, to enforce liens thereupon, and to subject it to the payment of the debts of its owners, whether resident or not. The sovereign power may lay hands on any and all persons and property within its borders, and where, as in our case, the functions of government are departmentalized, what is within the reach of executive and legislative action, must also be within the reach of the judiciary. The modern tendency in this regard is to make no distinction between mobility and immobility of property established by the time-honored principles oflex rei sitaeandmobilia personam sequuntur. We find it neither necessary nor fruitful to indulge in any characterization as to whether the present proceedings should be described as thosein remorquasi in rem. Such characterization is of no legal significance in this connection. Thesitusof theresis clear no less than the garnishment of theresat the commencement of the action, and reasonable notice and opportunity to be heard presumptively had by virtue of the publication of the summons in accordance with the provisions of section 398 of the Code of Civil Procedure..

Situs of Money where the money was to be found or paid Situs of Debts

HARRIS v. BALK FACTS: Harris and Balk are both North Carolina domiciliaries. Harris owed Balk a sum of money. When he was in Baltimore he was served a writ of garnishment, it appearing that Balk has a debtor there. He paid pursuant to the writ, but when he returned to N. Carolina, Balk sued him for recovery of his indebtedness. Harris pleaded the recovery of the Maryland judgment.

HELD: The attachment of Harris debt is valid, and the North Carolina court should give credit to the Maryland judgment. The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes. He is as much bound to pay his debt in a foreign state when therein sued upon his obligation by his creditor, as he was in the state where the debt was contracted.

Prof. Beale: this decision did injustice to the creditor, as he has no power to fix the personal presence of his debtor at one place or another. It is unjust to submit the creditors claim to the accident of the debtors presence in one state or another.

What of the original creditors consent? Situs of Shares of Stock

CIR v. ANGLO CALIFORNIA NATIONAL BANK FACTS: The Collector of Internal Revenue assessed deficiency income taxes against Calamba Sugar Estates for the capital gains on the sale of Pampanga Sugar Mills shares of stock. The sales were conducted in SF, California, and payments were made there.

HELD: CSE not liable for income tax on the capital gains. The government cannot impose income taxes on capital gains where the sale took place outside its territorial JD. Foreign corporations may be levied income taxes only on income derived from sources within the Philippines. With respect to capital gains, the place of the sale (which in CAB is California) is also the place or source of the capital gain.

PATENTS, TRADEMARKS, TRADE NAME AND COPYRIGHT PHILIPS EXPORT BV v. COURT OF APPEALS A corporations right to use its corporate and trade name is a property right, a right in rem, which it may assert and protect against the world in the same manner as it may protect its tangible property, real or personal, against trespass or conversion. It is regarded, to a certain extent, as a property right and one which cannot be impaired or defeated by subsequent appropriation by another corporation in the same field.

EMERALD GARMENT MANUFACTURING v. COURT OF APPEALS FACTS: H. D. Lee Co., a foreign corporation, filed a petition for cancellation of registration of the trademark Stylistic Mr. Lee used on items of clothing by Emerald Garments, alleging that it so closely resembled H. D. Lees trademark as to cause confusion, mistake and deception on the public as to the origin of the goods.

HELD: A foreign corporation may have the capacity to sue for infringement irrespective of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the question of whether they have an exclusive right over their symbol as to justify issuance of the xxx writ will depend on actual use of their trademarks in the Philippines.

CHOICE OF LAW CONTRACTS

CONTRACTS WITH A FOREIGN ELEMENT Contract law aims to protect the reasonable expectations of the parties and to secure the stability of commercial transactions. PRIL involves contracts that have one or more foreign elements: the parties are of different nationalities/domiciles the prestations are to be fulfilled in different states the place of its execution is different from parties domiciles and/or the place of its fulfillment and/or situs of the property subject of the contract

EXTRINSIC VALIDITY OF CONTRACTS Lex loci celebrationis Section 9 of the Restatement Second refers to the formalities which meet the requirements of the place where the parties executed the contracts.

Art 17, paragraph 1 of the Philippine Civil Code: The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed.

Art 17, paragraph 2 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.

Contracts entered into by letter or telegram Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was made. (Art 1319, Civil Code)

INTRINSIC VALIDITY OF CONTRACTS Refers to the nature, content and effects of the agreement 3 choices when resolving conflict of laws issue: Law of the place of making (lex loci contractus) Law of the place of performance (lex loci solutionis) Law intended by the parties (lex loci intentionis) Art 1306 of the Civil Code

MACMILLAN AND BLOEDEL v. TH VALDERAMA & SONS Facts: Valderama & Sons, thru an n agent, entered into a contract for purchase of railroad equipment with Macmillan in Canada. Valderama failed to get an import license because the Import Control Comm failed to act on his application. Macmillan suffered damages because it had to cancel the freight engagement.Held: Lex loci solutionis applies. The general rule governing the validity & construction of a contract & the rights and liabilities thereunder is that the law of the place of performance applies.

In case of conflict in determining validity, nature and obligation and effect of contract, lex loci solutionis prevails over lex loci contractus.

The laws of Canada, which is the place of performance, should apply. The failure of the Import Control Comm. to act on the application of import license cannot constitute a legal excuse for his failure to perform his obligations under the contract.

OTHER COL ISSUES IN CONTRACTS CHOICE OF FORUM/VENUE CLAUSES

COMPAGNIE DE COMMERCE v. HAMBURG AMERIKA Facts: Compagnie (french) and Hamburg (Germany) entered into a charter party to transport Cs goods from Saigon- Europe. Because of the impending war between France & Germany, the ship went to Manila because Saigon is a French port. C filed for breach of contract. H contested the jurisdiction of Phil courts to try the case because the contract had a clause directing the settlement of disputes first to a Board of Arbitration in England.

Held: Phil. courts have jurisdiction. The parties are free to waive the stipulation if they so desired.Phil courts cannot be ousted of their jurisdiction by the contractual stipulation in the absence of averment and proof that under the law of England (place of contracting), compliance with, or an offer to comply with such a stipulation constitutes a condition precedent to the institution of judicial proceeding for the enforcement of the contract.

Besides, Hamburg appeared and answered without objecting to the courts jurisdiction; it also sought affirmative relief.

KING MAU v. SYCIP Facts: King Mau entered into an agency agreement with the Sycip in New York. King mau was able to sell 1,000 tons of coconut oil. KM brought an action to collect commission from the sale. Sycip claimed that the Phil court has no jurisdiction as the contract was entered in New York.

Held: Phil court has jurisdiction. A non-resident may sue a resident in the courts of this country where the defendant may be summoned and his property leviable upon execution in case of a favorable, if final and executory judgment.

It is a personal action for the collection of a sum of money which the CFIs have jurisdiction to try and decide.

HSBC v. SHERMAN Facts: HSBC granted Eastern Book Supply an overdraft secured by the directors of the latter. Eastern failed to pay. HSBC filed suit in RTC. The defense of the directors is that Phil courts have no jurisdiction because in the Guarantee Agreement, it was provided that Singapore shall have jurisdiction over all disputes arising therein.

Held: Phil courts have jurisdiction. The parties did not stipulate that only the courts of Singapore, to the exclusion of all the rest, has jurisdiction. Neither did the clause in question operate to divest Phil. courts of jurisdiction.

Jurisdiction is defined as the right of a State to exercise authority over persons and things within its boundaries subject to certain exceptions. This authority is exclusive within and throughout the domain of the State.

Stipulation on venue valid unless: Court is required by statute to entertain Plaintiff cannot secure relief in the other state Other state is substantially more inconvenient place for trial Stipulation was secured through misrepresentation, duress, abuse of economic power or other unconscionable means Other reason that makes the enforcement of such stipulation unfair or unreasonable

ARBITRATION CLAUSES PUROMINES, INC. v. CA Facts: Puromines and Philip Bros. entered into a contract of sale with an arbitration clause. Puromines filed for complaint in RTC, Manila. Philip Bros. filed a MTD on the basis of an arbitration clause.

Held: Arbitration clause is valid. Puromines derives its right from the bill of lading together with the sales contract & it is bound by the provisions and terms of the bill of lading and of the arbitration clause incorporated in the sales contract.

The courts will look with favor upon such amicable settlements (arbitration) and will only interfere with great reluctance to anticipate or nullify the action of the arbitrator.

THE BREMEN ET AL v. ZAPATA OFF SHORE COMPANY Facts: Zapata, a Houston company, entered into a contract of towage with Unterweser, a German corp. Contract contained a forum selection clause which provides that any dispute arising must be treated before London courts.

Zapata filed a suit in admiralty against Unterweser for breach of contract and damages in Florida District Court. Unterweser filed motion to dismiss for lack of jurisdiction citing the forum-selection clause.

Held: Florida court has no jurisdiction. As a rule, a forum clause should control absent a strong showing that it should be set aside. Court should enforce the forum clause specifically unless Zapata could clearly show that

a. enforcement would be unreasonable and unjust or b. that the clause was invalid for such reasons as fraud or overreaching orc. if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by a statute or by judicial decision or d. if the chosen forum is seriously inconvenient for the trial of the action. But if the parties contemplated the claimed inconvenience, it should not be heard to render the forum clause unenforceable.

The CAB involves a freely negotiated international commercial contract between the parties. As noted, selection of a London forum was clearly a reasonable effort to bring vital certainty to this intl transaction and to provide a neutral forum experienced and capable in the resolution of admiralty litigation.

ADHESION CONTRACTS PAN AM WORLD AIRWAYS v. RAPADAS The liability is limited by the Notice of Baggage liability. Although the ticket is a contract of adhesion, it does not offend against the policy of the law forbidding one from contracting against his own negligence. The one who adheres to the contract is in reality free to reject it entirely. Court finds the provisions in the plane ticket sufficient to govern the limitations of liabilities of the airline for loss of luggage. The passenger, upon receiving his plane ticket, was expected to be vigilant insofar as his luggage is concerned.

PAL v. CA Although the airway bill is binding between the parties, the liability of Pal is not limited on the provisions of the airway bill. While the Warsaw Convention is law in the Philippines, the Philippines being a signatory thereto, it does not operate as an exclusive enumeration of the instances when a carrier shall be liable for breach of contract or as an absolute limit of the extent of liability nor does it preclude the operation of the Civil Code or other pertinent laws.

Also, the willful misconduct and insensitivity of the officers of PAL in not attempting to explain the damage despite due demand and the unexplained delay in acting on her claim, amounted to bad faith and renders unquestionable its liability for damages.

SPECIAL CONTRACTS Carriage of Goods by Sea (COGSA)

AMERICAN PRESIDENT LINES LTD. v. KLEPPER Facts: K shipped on board APLs vessel personal effects. Because of damage to the effects, K sued APL. CA affirmed CFIs finding of liability but awarded damages on the basis of the COGSA.

Held: COGSA does not apply but the Civil Code. Art 1753 of the Civil Code provides that the law of the country to which the goods are to be transported shall govern the liability of the common carrier in case of loss, destruction or deterioration. Under Art 1766, "In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws," and in the Civil Code there are provisions that govern said rights and obligations. Although Section 4 (5) of the Carriage of Goods by Sea Act states that the carrier shall not be liable in an amount exceeding $500 per package unless the value of the goods had been declared by the shipper and inserted in the bill of lading, this is merely suppletory to the provisions of the Civil Code.

CONTRACTS FOR INTERNATIONAL AIR TRANSPORTATION Warsaw Convention In most cases decided by the Philippine SC involving a carriers employees negligence, bad faith or improper conduct, the Court refused to apply the Warsaw Convention.

LOPEZ v. PAN AM Facts: Despite several confirmations, Sen. Lopez and his family failed to get 1st class seats and were constrained to board as tourist passengers of PanAm. CFI, Rizal awarded damages in their favor. Pan Am admitted the breach of contract but not the finding of bad faith

Held: Pan Am acted in bad faith. Pan Am misled the Lopezes into believing the reservations were valid and was prompted by self-interests in dong the same (precluding the Lopezes to secure other tickets). Also, there was negligence by its employees that were so gross and reckless as to amount to malice and bad faith, e.g. erroneous cancellation of reservation, not confirming reinstatement of reservation, confirming reservation even if EE had knowledge that they were merely waitlisted and not notifying Lopezes of the cancellation.

KLM v. CA Facts: Mendozas went on a world tour. KLM issued the tickets for the whole trip. Their coupon for Aer Lingus was marked RQ. Thru KLMs help, reservations were made in the Aer Lingus flight. Upon arrival, only the minors were allowed to board. Mendoza sued for breach of contract and for damages bec. of the humiliation they suffered. KLM denied liability on the basis of Art. 30 of the Warsaw Convention (successive carriers liability)

HELD: Art. 30 does not apply and KLM should be accountable for the tortious act of Aer Lingus.Art. 30 presupposes either an accident or delay and not the situation in CAB. Although the tickets provide that KLMs liability for damages is limited to occurrences in its own airlines, this provision was printed in very small letters such that a magnifying glass is needed to read it. It would be unfair to charge Mendozas of automatic knowledge and it is the duty of KLM to inform them of the conditions prescribed in the tickets or at least make sure that they read them before they accepted the tickets. This it failed to do.

JURISDICTION UNDER THE WARSAW CONVENTION SANTOS III v. NORTHWEST Action for damages must be filed in the: Domicile of the carrier Place of the carriers principal business Place of business where the contract was made Place of destination

AMERICAN AIRLINES v. COURT OF APPEALS Facts: Mendoza bought conjunction tickets from Singapore Airlines. Although it was not a participating airline, AA exchanged the unused portion of the ticket for a one-way ticket to New York. However, Mendoza was prevented by AAs security officers from boarding until all the other passengers have boarded. He sued action for damages against AA in RTC. AA claimed that the issuance of a new ticket created a separate contract of carriage from the one with SA and therefore, under Art. 28, RTC had no jurisdiction over the case against AA.

Held: RTC had jurisdiction; the new ticket is not considered as separate from the one issued by SA but the contract of carriage constitutes a single operation. SA & AA are members of the IATA and under the general pool partnership agreement they act as agents of each other in the issuance of tickets to contracted passengers. When AA exchanged the ticket, it entered it in the IATA clearing house and undertook to transport M. It thereby assumed the obligation to take the place of the principal carrier originally designated and constituted itself as an agent of SA. The number of tickets issued does not detract from the oneness of the contract of carriage as long as the parties regard the contract as a single operation.

OTHER ISSUES ABSENCE OF AN EFFECTIVE CHOICE OF LAW BY THE PARTIES court should determine the state of most significant relationship LIMITATIONS TO CHOICE OF LAW IN CONTRACTS Cannot select a law that has no connection to the transaction or the parties Must apply the amended law unless the change is so drastic or revolutionary that it could not have been contemplated by the parties May not contract away application of laws impressed with public interest Cognovit clauses are generally disallowed in most US states, unless parties are of equal power and the debtor agreed to it voluntarily

CHOICE OF LAW IN WILLS, SUCCESSION AND ADMINISTRATION OF ESTATES

EXTRINSIC VALIDITY OF WILLS General rule law of the place where executed Foreigner may choose to follow formalities under his national law, law of his domicile (if domiciled in RP) or law of the place of execution of his will Filipinos may choose his national law or the law of the country where his will is executed

IN RE ESTATE OF JOHNSON This interpretation is erroneous because the full phrase another state or country, means that the section refers to either a State in the US or another country. The admission of the will to probate by the CFI of Manila under Section 636 was therefore correct. Although the CFI Of Manila most likely erred in taking judicial notice of Illinois law when it promulgated that the will was executed in conformity with the laws of Illinois, Ebba is now precluded to raise this issue because the petition to annul the probate did not allege the difference between Philippine Law and Illinois law

Joint wills of Filipinos are void even if executed in a country where joint wills are allowed. In the case of foreigners whose national laws do not prohibit joint wills, should their joint will be allowed probate by a Philippine court?

RULES FOR EXTRINSIC VALIDITY OF WILLS APPLY TO HOLOGRAPHIC WILLS BABCOCK TEMPLETON v. RIDER BABCOCK FACTS: The will of Jennie Rider Babcock was executed in California. Babcock Templeton, being the mother of the three beneficiaries of the will, stressed that the laws of California should govern the probate since Jennie Rider Babcock acquired domicile in California. William Rider Babcock opposes this by stressing that her sister never acquired domicile in California as her latest domicile was New York.

HELD: Her domicile was California, because even though she later left California for New York, she never intended to be a New York domiciliary. The trial court was also correct in admitting the will for probate under Section 636 of the Code Of Civil Procedure, because the length of time of her residence in and eventual death in the Philippines did not result into a loss of her US citizenship. She never intended to become a Philippine domiciliary, thus making Section 618 inapplicable to the will she executed abroad.

INTRINSIC VALIDITY OF WILLS Roman Law national law of the decedent

CAYETANO v. LEONIDAS FACTS: Upon the death of Adoracion Campos, her father Hermogenes sought to be declared as owner of the entire estate as the only compulsory heir. On the other hand, Nenita Paguia (one of Adoracions sisters) sought the reprobate of the will executed by Adoracion in the US. When the trial court allowed probate of the will in the Philippines, Hermogenes raised in issue that the allowance of the will to probate divested him of his legitime, because the will preterited him.

HELD: Since the governing law with respect to the amount of successional rights is the national law of the decedent, the governing law of Adoracions will is Pennsylvania law. And since Pennsylvania law does not have a system of legitimes, Hermogenes is therefore not preterited. Although the Philippines adopt a system of legitimes as a matter of public policy, such policy does not extend to the successional rights of foreigners.

WHAT ISSUES ARE USUALLY INVOLVED IN A PROBATE? General Rule: the probate court can only rule on:1) extrinsic validity2) due execution3) testamentary capacity4) compliance with requisites or solemnities prescribed by law

INTERPRETATION OF WILLS Rules of interpretation are to be governed also by decedents national law. Where terms of the will are unambiguous, the clear intention of the testator must be upheld. In case of ambiguity, intent may be inferred from the other provisions or the testators contemporaneous and subsequent acts, in light of laws and customs of the state the testator is presumed to be most familiar. Interpretation that will make the disposition operative or that will carry out the purpose intended by the testator will prevail.

REVOCATION Article 829 of the Civil Code A revocation done outside the Philippines, by a person who does not have his domicile in this country, is valid when it is done according to the law of the place where the will was made, or according to the law of the place in which the testator had his domicile at the time; and if the revocation takes place in this country, when it is in accordance with the provisions of this Code.

If done by one with domicile in the Philippines Philippine law or the law of the place of revocation. Wills are revoked: By implication of law By some will, codicil or other writing By burning, tearing, cancelling or obliterating the will

PROBATE Judicial authentication of a will Rule 70, Section 9 grounds for disallowance of a will

SUNTAY v. SUNTAY FACTS: Natividad Billian sought to have the will (executed in the Philippines) of his husband Jose Suntay probated. The trial court denied probate because during the course of the proceedings, the will was lost. Later, her son Silvino filed a petition for the probate of a will allegedly executed by Suntay in China. The trial court again denied probate, and was correct in deciding that way, because there was no proof that:1. the municipal district court of Amoy, China, is a probate court2. there was a law of China on procedure in the probate or allowance of wills 3. the legal requirements for the execution of a valid will in China in 1931 were satisfied4. the order of the municipal district court of Amoy purports to probate the will

HELD: In the absence of proof that the municipal district court of Amoy is a probate court and on the Chinese law of procedure in probate matters, it may be presumed that the proceedings in the matter of probating or allowing a will in the Chinese courts are the same as those provided for in our laws on the subject. Because of this, rules on notice must be followed. Since Silvino did not cause the notification of the other heirs, this petition must fall.

VDA. DE PEREZ v. TOLETE FACTS: Each of the Cunanan spouses (Jose and Evelyn) executed a will in New York containing similar provisions on the presumption of survivorship. When the entire family perished in a fire that gutted their home in New York, Rafael as the named trustee in the will of Jose filed separate proceedings in New York for the probate of the wills of his brother and sister-in-law. Later, Salud Perez (mother of Evelyn) filed a petition for reprobate in Bulacan. Rafael opposed by arguing that Salud was not an heir as per New York law which must be the law that should govern the wills as they were executed in New York. In deciding the matter, the necessary evidence that should be submitted are: (1) the due execution of the will in accordance with the foreign laws(2) the testator has his domicile in the foreign country and not in the Philippines(3) the will has been admitted to probate in such country(4) the fact that the foreign tribunal is a probate court(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. Salud failed to submit the 1st and 5th requirement. While the probate of a will is a special proceeding wherein courts should relax the rules on evidence, the goal is to receive the best evidence of which the matter is susceptible before a purported will is probated or denied probate. Not only that, Salud also failed to notify the heirs of Jose of the proceedings.

HELD: The rule that the court having jurisdiction over the reprobate of a will shall "cause notice thereof to be given as in case of an original will presented for allowance" means that with regard to notices, the will probated abroad should be treated as if it were an "original will" or a will that is presented for probate for the first time. Accordingly, compliance with Sections 3 and 4 of Rule 76, which require publication and notice by mail or personally to the "known heirs, legatees, and devisees of the testator resident in the Philippines" and to the executor are required.

ADMINISTRATION OF ESTATES Duties to manage properties, settle debts and distribute the residuum to the heirs

TAYAG v. BENGUET CONSOLIDATED INC. FACTS: BCI stocks owned by the decedent Idonah Slade Perkins were in the possession of the domiciliary administrator County Trust Company of New York. Later, the CFI Of Manila named Renato Tayag as the ancillary administrator. When Tayag obtained a court order for the County Trust Company to deposit the stocks to him, BCI appealed.

HELD: The appeal must fail. BCI 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. The situs of shares of stock is the place of domicile of the corporation. And since the power of the ancillary administrator over shares located here is beyond question, it follows that the stocks should be in the possession of Tayag.

Succession and administration of estates are governed by different laws: succession national law administration situs of property (territorial/JDal)

TRUSTS A right of property, real or personal, held by one party for the benefit of another May be created by deed during the lifetime of the settler/creator of the trust or by will Primary consideration of courts is to carry out the intent of the creator of the trust Rules governing wills will apply to testamentary trusts

CHOICE OF LAW IN TORTS AND CRIMES

TRADITIONAL THEORY Lex loci delicti commissi Common Law place where the last event necessary to make the actor liable occurs Civil Law place were the tortious conduct is committed

LOUCKS v. STANDARDS OIL CO. Where the tort law of the foreign state (Massachusetts) is more favorable and does not contravene policy of the forum (New York); foreign law will be used

MODERN THEORIES Place of Most Significant Relationship

SAUDI ARABIAN AIRLINES v. CA FACTS: Morada was a flight stewardess of Saudi Airlines. She was involved in an attempted rape case, which led to her conviction of violation of Islamic laws in Saudi. The Prince of Makkah ruled that she was wrongfully convicted. However, she was terminated from her employment by Saudia.

HELD: The RTC of Manila has JD to try the case, applying the state of most significant relationship rule. The following contacts should be considered in using this rule: place where the injury occurred, place where the conduct causing injury occurred, domicile or residence or nationality or place of business of the corporation, and place where the relationship between the parties is centered.

In CAB, the Philippines had the most significant contacts. The overall injury occurred in the Philippines, Morada is a resident and a Filipina national, Saudia is a foreign corporation engaged in business here, and the relationship of the parties is centered here.

NAVIDA v. DIZON JR. It is an error on the part of the court when it dismissed the cases on the ground of lack of jurisdiction on the mistaken assumption that the cause of action narrated by Navida and Abella took place abroad and have occurred outside and beyond the territorial boundaries of the Philippines, i.e. the manufacture of pesticides, their packaging in the containers, their distribution through sale other disposition, resulting in their becoming part of the stream of commerce, and hence, outside the jurisdiction of the RTCs.

CAB: The cases involved are not criminal cases where territoriality, or the situs of the act complained of, would be determinative of jurisdiction and venue for trial of cases. In personal civil actions, such as claims for payment of damages, the ROC allow the action to be commenced and tried in the appropriate court, where any of the plaintiffs or defendants resides, or in the case of a non-resident defendant, where he may be found, at the election of the plaintiff.

Interest Analysis consider the relevant concerns of the state in the case and its interest in having its law applied to the issue Cavers Principle of Preference extends the benefit of a law in one state even if there is no such law in the state where the injury occurs

FOREIGN TORT CLAIMS Tortious liability is personal to the tortfeasor and follows him where he may be found. Conditions for enforcement Tort is based on civil liability and not on crime Enforcement of the foreign tort is not against the public policy of the forum Judicial machinery of forum is adequate to satisfy the claim

PRODUCT LIABILITY General rule: May be brought by the victim in his home state against an out-of-state manufacturer Exception: ASAHI METAL INDUSTRY CO. v. SUPERIOR CT OF CALIFORNIA

ASAHI METAL v. SUPERIOR COURT OF CALIFORNIAFACTS: Asahi Metal manufactures tire valve assemblies in Japan and exports them, including to a Taiwanese company which, in turn, incorporates them into finished tires sold in the US. The driver of a motorcycle, who had an accident resulting in injuries to him and death to his passenger, sued the Taiwanese company. The Taiwanese company filed a cross-complaint against Asahi.

HELD: The California court has no JD over Asahi Metal. The constitutional touchstone/test of due process is whether the defendant purposefully established minimum contacts in the forum state. And minimum contacts must have a basis in some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.

In the CAB, no purposeful availment of the California market on the part of Asahi. It does not do business in California; has no office, agents, employees, or property in Cal.; does not advertise or otherwise solicit business there; and did not create, control, or employ the distribution system that brought its valves to California. Action also cannot be maintained in a state that has no connection to the transaction but was chosen as the forum simply to avail of favorable laws.

THE ALIEN TORT ACT Grants US district courts original jurisdiction over civil actions of aliens for a tort committed in violation of the law of nations or a treaty of the United States even if committed outside US territory. Based on the theory of vested rights and on the internalization of international laws on human rights. Marcos human rights violations cases in the US Exception: Guinto v. Marcos

GUINTO v. MARCOSFACTS: Guinto and Suarez filed an action for damages against Marcos in California under the Alien Tort Claims Act. According to Guinto, Marcos act of seizing their film 100 Days in September violated their freedom of speech.

HELD: Test to determine when a violation of the law of nations has occurred there has been a violation by one or more individuals of those standards, rules or customs a) affecting the relationship between states or between an individual and a foreign state, and b) used by those states for their common good and/or dealings inter se. A violation of the First Amendment right of free speech does not rise to the level of such universally recognized rights as to constitute a violation of the law of nations.

The Alien Tort Statute justifies exercise of court JD over completely foreign tort cases because of the universal evil exemplified by human rights violations. This is so even though there are no significant contacts between the courts and the parties and events nor substantial state interest in the case other than a general desire for compliance with customary international law. That is why in order for the Alien Tort Act to apply, there is a need to establish that the tortious conduct violated an internationally protected human right.

PHILIPPINE RULE ON FOREIGN TORTS No statute governing enforcement of claims for foreign torts

TIME v. REYES FACTS: Villegas and Enrile filed a complaint for damages against Time, Inc. upon an alleged libel arising from a publication of Time Magazine. Plaintiffs filed their action in CFI Rizal. But according to the applicable law, they may file the action only in the place of first publication or in the City of Manila (since they are public officers).

HELD: The case should be dismissed for improper venue. The only alternative allowed to the public official is to prosecute in the place where the offending article was printed and first published; but in the CAB the alternative was not open to plaintiffs since the offending publication was not printed in the Philippines.In Time, Inc., if the court had not characterized the issue as jurisdictional, and decided the case from a conflicts tort perspective, it could have taken cognizance of the case following the most significant relations approach because of the significant links between the forum and the parties.

DIFFERENCE BETWEEN LIABILITY FOR A TORT AND FOR A CRIMETORTCRIME

Liability is transitory and personal and may be prosecuted where the offender may be found

Liability is territorial

Injury is to an individual

Injury is to the State

Purpose of an action is to indemnify victim

Purpose of the action is to punish and reform

EXCEPTIONS TO THE TERRITORIAL PRINCIPLE IN CRIMINAL LIABILITY Immunity of State officials, diplomatic representatives, etc,

LIANG HUEFENG v. PEOPLE FACTS: Liang, a Chinese working at the ADB, was charged by a fellow worker with grave oral defamation. The lower court dismissed the complaint on the ground that Liang is covered by the immunity provision under the Agreement between ADB and the Phil. Government.HELD: Liang is not immune from suit. The immunity under the Agreement is not absolute, and it only extends to acts done in official capacity. Slandering a person could not possibly be covered by the immunity agreement because our laws do not allow the commission of a crime, such as defamation, in the name of official duty.

Crimes committed on foreign vessels even if within territorial waters of the coastal state Certain crimes which by law are punished even if committed abroad

CHOICE OF LAW CORPORATIONS

PERSONAL LAW OF A CORPORATION Place of incorporation ME GRAY v. INSULAR LUMBER COMPANY Facts: Gray, a stockholder of Insular (incorporated in NY) filed an action in CFI to compel Insular to allow him to examine its books. Sec. 77 of NY Stock Corp Law only gives the right to stockholders owning 3% of the capital stock of the company. Gray does not own the required shares.

Held: Gray is not entitled to the right to examine the books of Insular. Gray is bound by the NY law which only gives him the right to receive from the treasurer of the corporation a statement of affairs covering a particular account of all its assets and liabilities. Neither can his rights be granted under common law absent a showing that: a. he seeks information for an honest purpose or to protect his interest as stockholderb. he exercises right in good faith and for a specific and honest purpose not merely to satisfy curiosity or for speculative or vexatious purposes.

Right of shareholder to inspect books of a foreign corporation licensed to do business in the Philippines is governed by foreign law

BANK OF AUGUSTA v. EARLE FACTS: Bank of A (incorporated in Georgia), thru MGran bought bills from Earle in Alabama. Bills were unpaid so Bank sued Earle. TC ruled that the Georgian Bank could not exercise power in Alabama thereby making the contracts void.

Held: Bank can exercise its powers in Alabama and the contracts are therefore valid. It is well-settled that by the law of the comity of nations, a corp. created by 1 sovereignty is permitted to make contracts in another and sue in its courts and that the same law of comity prevails in several States of US including Alabama. Alabama courts have held that a foreign corp may sue in its courts based on the comity of nations.

FOUR BASIC (IMPORTANT) THEORIES FROM THE CASE:(1) A corporation has no legal status beyond the bounds of state where it was created. (2) It cannot exercise powers beyond its corporate charter or its personal law. (3) No state is under any obligation to adhere to the principle of comity. (4) No state is obliged to grant a foreign corporation rights and privileges granted to its own citizens.

EXCEPTIONS TO THE INCORPORATION TEST Constitutional and Statutory Restrictions

PALTING v. SAN JOSE Facts: Palting opposes the tie-up between San Jose Petroleum (a Panamanian corp.) and San Jose Oil (domestic corp.) as being violative of the Constitution and the Petroleum Act. SJP claimed that it is entitled to the Parity Amendment which grants to US citizens the right to use & exploit natural resources in the Phils because its stockholders are US citizens.

Held: SJP is not covered by the Parity Agreement. It is not owned or controlled directly by US citizens. It is owned by another Panamanian corp., Oil Investments. Oil Investments on the other hand is owned by 2 Venezuelan corps. Even assuming that the stocks of the 2 Venezuelan corps are owned by US citizens, to hold that the set-up in CAB falls within the Parity Amendment is to unduly stretch and strain the language and intent of the law. There would be practical impossibility to determine at any given time the citizenship of the controlling stock.

Control Test During War FILIPINAS COMPANIA DE SEGUROS v. CHRISTERN HUENEFELD & CO. Facts: Christern (German Co.) filed a claim against Filipinas (US Co.) for recovery on fire insurance policies issued by the latter. F refused to pay claiming that the policies ceased to be in effect on the date the US declared was against Germany. Dir. Of Bureau of Financing directed F to pay C.

Held: The policy ceased to be valid and binding because of the fact that majority of the stockholders of C are Germans and it became an enemy corporation when war was declared. Under Phil Insurance Code, anyone except a public enemy may be insured. C is a public enemy at the time the insurable risk occurred. But C is entitled to a return of the premiums paid.

DOMICILE OR RESIDENCE OF FOREIGN CORPORATIONS May acquire a residence other than its place of incorporation (domicile) Article 51 of Civil Code if the law creating them does not fix the domicile of juridical persons the same shall be where their legal representation is established or where they exercise their principal functions

STATE INVESTMENT HOUSE v. CITIBANK Facts: CMI obtained loans from Citibank. CMI defaulted. Citibank filed petition for involuntary insolvency against CMI with CFI, Rizal. State Investment, a creditor of CMI, opposed claiming that Citibank had no jurisdiction because the banks are not resident creditors of CMI.

Held: The Phil branches of the bank are residents of the Phils being resident foreign corporations as defined in the Tax Code and other Banking Laws. What effectively makes a foreign corp a resident corp in the Phils is its actually being in the Phils and licitly doing business here (locality of existence) The grant of license merely gives legitimacy to its doing business here but it does not make the corp a resident. Also, the failure of the bank to aver categorically that they are residents are not fatal to the cause of action where it alleged that it is a foreign bank licensed to do business here.

RIGHT OF FOREIGN CORPORATION TO BRING SUIT HOME INSURANCE CO. v. EASTERN SHIPPING Facts: Home Insurance was subrogated to the rights of shippers against eastern Shipping for damages on cargo. Eastern refused to pay. HI filed action to recover sum of money. TC dismissed because HI failed to prove capacity to sue.

Held: HI has capacity to sue because at the time the complaints were filed, it already had a license to conduct insurance business in the Phils. Insurance contracts are not null and void for lack of license at the time it was entered into. The Corp. Code is silent on the status of the said contracts. Also, the object of the law in requiring registration is to subject the foreign corp. to the JD of our courts.

ATLANTIC MUTUAL INSURANCE v. CEBU STEVEDORING Facts: Cebu Stevedoring carried copra for Procter & Gamble. Copra were insured with AMI. Bec. of damages, AMI sued Cebu Stevedoring. CS filed a MTD bec. AMI had no capacity to sue. TC ruled that it must allege that it has a license to be able to sue.

Held: Such allegation is unnecessary. However, AMIs mere allegation that it is a foreign corp is not sufficient. It must state WON it is doing business in the Phils bec different rules attach to the same. If it is engaged in business, it must be licensed to be able to sue. If not so engaged, the license is not required and it may sue esp. if it is a single/isolated transaction.

Facts showing the capacity to sue or be sued of a corporation must be averred

EXCEPTIONS TO THE LICENSE REQUIREMENT ISOLATED TRANSACTIONS ACTION TO PROTECT INTELECTUAL PROPERTY AGREEMENTS FULLY TRANSACTED OUTSIDE THE PHILIPPINES (e.g. marine insurance policies issued by foreign insurer on cargo shipped by Philippine carrier) ACTION IS ONLY A COROLLARY DEFENSE TO A SUIT AGAINST IT

WHAT CONSTITUTES DOING BUSINESS Installation of products, registration of trade name, conduct of training programs, designation of a distributor (Wang Laboratories Inc v. Mendoza) Appointment of a local airlines as its sales agent (CIR v. JAL)

CIR v. JALFACTS: JAL was assessed deficiency income tax by CIR for the sales of its ticketing agent (PAL) in the Phils. JAL opposed and claimed that as a non-resident foreign corp. it can only be taxed on income from Phil sources.

HELD: JAL is a resident foreign corporation under the Tax Code. For a foreign corporation to be regarded as doing business, there must be a continuity of conduct and intention to establish a continuous business (i.e. appointment of a local agent) and not a temporary one. JAL constituted PAL as a local agent to sell tickets which is the lifeblood of airline tickets, the generation of sales being its paramount objective.

Series of transactions involving futures trading (Merrill Lynch case) or licensing of a sales agent that may also be granted loans (Granger Associates case)

GRANGER v. MICROWAVE SYSTEMSFACTS: Granger (US) sued MSI (Phil) for recovery of a sum of money. MSI did not pay and claimed that G had no capacity to sue bec. it was unlicensed.HELD: G had no capacity to sue because of its being an unlicensed foreign corp doing business in the Phils. Neither does it fall under the established exceptions. Granger had the burden of showing that the finding fell under an exception. The purpose of requiring license is to enable Phil courts to exercise jurisdiction over them. If the foreign corp operates here without submitting to our laws by securing a license, they may not be allowed to invoke our laws for their protection.

STEELCASE INC. v. DESIGN INTERNATIONAL SELECTIONS According to the Supreme Court, the following acts shall not be deemed "doing business" in the Philippines: (a) mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; (b) having a nominee director or officer to represent its interest in such corporation; (c) appointing a representative or distributor domiciled in the Philippines which transacts business in the representative's or distributor's own name and account; (d) the publication of a general advertisement through any print or broadcast media; (e) maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by another entity in the Philippines; (f) consignment by a foreign entity of equipment with a local company to be used in the processing of products for export; (g) collecting information in the Philippines; and (h) performing services auxiliary to an existing isolated contract of sale which are not on a continuing basis, such as installing in the Philippines machinery it has manufactured or exported to the Philippines, servicing the same, training domestic workers to operate it, and similar incidental services.Based on this list, the appointment of a distributor in the Philippines is not sufficient to constitute "doing business" unless it is under the full control of the foreign corporation. If the distributor is an independent entity which buys and distributes products, other than those of the foreign corporation, for its own name and its own account, the latter cannot be considered to be doing business in the Philippines.Applying these rules, DISI was founded in 1979 and is independently owned and managed. In addition to Steelcase products, DISI also distributed products of other companies including carpet tiles, relocatable walls and theater settings. The dealership agreement between Steelcase and DISI had been described by the owner himself as a buy and sell arrangement. This clearly belies DISIs assertion that it was a mere conduit through which Steelcase conducted its business in the country. From the preceding facts, the only reasonable conclusion that can be reached is that DISI was an independent contractor, distributing various products of Steelcase and of other companies, acting in its own name and for its own account. As a result, Steelcase cannot be considered to be doing business in the Philippines by its act of appointing a distributor as it falls under one of the exceptions under R.A. No. 7042.Although the foreign corporation in this case was declared to be not doing business in the Philippines, this case, nonetheless, explicitly declares another exception to the rule provided in Section 133 of the Corporation Code of the Philippines that [n]o foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines Following the ruling in this case, a foreign corporation doing business in the Philippines without a license may maintain suit in the Philippines against a domestic corporation or person who is party to a contract as the domestic corporation or person is deemed estopped from challenging the personality of the foreign corporation.

BRANCHES OF FOREIGN CORPORATIONS CITIBANK v. SABENIANO Respondent cannot be deemed to have authorized the use of her dollar deposits with Citibank-Geneva to liquidate her loans with petitioner Citibank when she signed the PNs for her loans. As has been established in the preceding discussion, "Citibank, N.A." can only refer to the local branches of petitioner Citibank together with its head office. Unless there is any showing that respondent understood and expressly agreed to a more far-reaching interpretation, the reference to Citibank, N.A. cannot be extended to all other branches of petitioner Citibank all over the world. Although theoretically, books of the branches form part of the books of the head office, operationally and practically, each branch maintains its own books which shall only be later integrated and balanced with the books of the head office. Thus, it is very possible to identify and segregate the books of the Philippine branches of petitioner Citibank from those of Citibank-Geneva, and to limit the authority granted for application as payment of the PNs to respondent's deposits in the books of the former.

PDIC v. CITIBANK NA AND BANK OF AMERICA A branch has no separate legal personality. This Court is of the opinion that the key to the resolution of this controversy is the relationship of the Philippine branches ofCitibank and BA to their respectivehead offices and their otherforeign branches.CAB: Citibank and Bank of America did not incorporate a separate domestic corporation to represent its business interests in the Philippines. Their Philippine branches are merely branches without a separate legal entity from their parent company.

As held in the case of Sokolott v. National City Bank of New York: Where a bank maintains branches, each branch becomes a separate entity with separate books of account. When considered, with the relation to the parent bank they are not independent agencies; they are, what their name imports, merely branches, and are subject to the supervision and control of the parent bank.

SPECIAL CORPORATIONS Religious Societies and the Corporation Sole Transnational Corporations Issue whether separate existence of parent company and the subsidiary has been maintained

PARTNERSHIPS Personal law law of its creation or it not identified by the law creating it where its legal representation is established or where it exercises its principal functions Conflict may arise if personal law of partnership does not recognize it as a separate legal entity and transacts in a jurisdiction where it is given a separate personality or vice versa

REMEDIAL LAW

ARCILLA v. TEODOROThe certification of non-forum shopping executed in aforeign country is not covered by Section 24, Rule 132 Rules of Court.The required certification of an officer in the Foreign Service under Section24 refersonly tothe documentsenumerated inSection 19(a).Had theCourt intended to include notarial documents, it should not have specified only the documents referred to under paragraph (a) of Section 19.Tobeadmissibleforanypurposein Philippine courts, foreign public documents must be certified by any officer of the Philippine legation stationed in the country where the documents could be found or had been executed. However, the Rule basically pertains to written official acts, or records of the official of the sovereign authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a foreign country. It explicitly refers only to paragraph (a) of Sec. 19. If the rule comprehends to cover notarial documents, the rule could have included so. What is important is that the applicant certified before a commissioned officer clothed with powers to administer oath that she has not and will not commit forum shopping.Page | 5