Professional Documents
Culture Documents
By
College of Law
Xavier University Ateneo de Cagayan
Cagayan de Oro City, Philippines
25 August 2016
Table of Contents
PART I: PROPERTY .....................................................3
Introduction ................................................................................ 3
Chapter 1: Real Property ............................................................. 4
Lex Situs: General Conflicts Rule on Real Property ....................... 4
Exceptions to Lex Situs on Real Property ....................................... 5
Chapter 2: Tangible Personal Property ......................................... 6
Choses in Action or Possession ..................................................... 6
Mobilia Senquntuur Personam: Discussion of Old Rule ................. 7
Lex Situs: General Conflicts Rule on Personal Property ................. 7
Exceptions to Lex Situs on Personal Property ................................ 8
Special Rules for Some Choses in Possession ............................... 8
Special Rule: Means of Transportation .......................................... 8
Special Rule: Thing in Transitu. ..................................................... 9
Chapter 3: Intangible Personal Property ...................................... 9
Administration of Debts ............................................................... 10
Negotiable Instruments ................................................................ 11
Corporate Shares of Stock ........................................................... 11
Franchise and Goodwill ............................................................... 12
Intellectual Properties .................................................................. 12
PART II: SUCCESSION................................................ 13
Introduction .............................................................................. 13
Chapter 1: Validity of the Will ................................................... 13
Conflict Rules on Extrinsic Validity .............................................. 14
Conflict Rules on Joint Wills ........................................................ 14
Conflict Rules on Intrinsic Validity ............................................... 15
Chapter 2: Revocation of Wills ................................................... 16
Chapter 3: Probate of Wills ........................................................ 17
Chapter 4: Administration of Estates ......................................... 17
General Rules on Administration of Estates ................................ 18
Conflict Rules on the distribution of residue ................................ 19
CONCLUSION ............................................................. 20
BIBLIOGRAPHY.......................................................... 21
2
Part I: Property
Introduction
With the globalization of the Philippine economy, Filipinos are
increasingly susceptible to at least one foreign element in their civil
or business transactions. Most, if not all, of these transactions
concern property of some form, whether it be land acquired by
succession, goods exported to other countries, or assignment of
patents and copyrights. Upon dispute as to which law governs in
transactions with foreign elements concerning property, Conflict of
Law rules applies.
Property, according to Philippine law, is generally defined as any
object susceptible of appropriation. New Civil Code enumerates two
kinds of property, namely real property and personal property, and
the latter may be further subdivided into tangible real property and
intangible real property. Cases involving property in the Philippines
are governed by the New Civil Code for substantive law, and the
Revised Rules of Court for procedural law. Choice of law rules would
depend on the character of the property, whether it be real or
immovable property or movable or personal property.
Elementary requisites before a court may proceed with any case,
whether conflict of law or not, includes the acquisition of jurisdiction
over the subject matter, person of the accused, and the res or thing.
Absent such jurisdiction, the court has no alternative but to dismiss
the case; conversely, when the court has jurisdiction, it may proceed.
In conflicts of law cases, however, the court having acquired
jurisdiction may refuse to accept the case on the ground of forum
non conveniens, or proceed, applying the law of the forum or lex fori,
when it is expressly allowed in its conflicts rules. Property in
particular generally follows the rule of lex rei sitei or lex situs, or the
applicable law is the law where the property is located.
Laurel vs Garcia1 is a peculiar case concerning the Roppongi
property in Japan. In ruling against the application of lex situs, the
Supreme Court reiterated the principle that a conflict of law rule does
not apply when no such situation exists. The Roppongi property was
given to the Philippines by Japan as reparation for damages done
during the war. Despite being located in Japanese territory, this
property does not follow the law of the forum simply because
1 Laurel v. Garcia, GR No. 92013 (1990)
3
ownership of the Roppongi property is vested in the Philippines. Title
of the property was not in dispute, and since no conflict situation
exists, lex situs does not apply; hence, the law of the Philippines shall
govern.
2 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 12.
3 Laurel v. Garcia, GR No. 92013 (1990)
4 Article 16(1), New Civil Code
5 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 322.
4
The theory of lex situs applies when the intrinsic validity and
alienations, transfers, mortgages, capacity of the parties,
interpretation of documents, effects of ownership, co-ownership,
accession, usufruct, lease, easement, police power, eminent domain,
taxation, quieting of title, registration and prescription of rights
concerning real property6 is in question.
Swank vs Hufnagle 7 illustrates a conflicts case applying lex
situs, where even if legal capacity is present according to law where
the contract was executed, the law where the property is situated
shall still govern. Therefore, mortgages over real property, when
considered void in the place where the real property is situated, is
void, regardless of law of the place where it was executed. Similarly,
if a foreigner executed a deed of sale abroad in favor of a Filipino
concerning a parcel of land found in the Philippines, lex situs or
Philippine law shall govern all characteristics of the transaction.
6 Ibid, 322.
7 Swank v Hufnagel, 111 Ind. 4543 (1887)
8 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
5
If, upon the other hand, tested by the lex loci voluntatis or the
lex loci intentionis, the principal contract of loan is void, the mortgage
would undoubtedly be also void (for accessory loses standing should
the principal be invalid), even if considered independently by itself
the mortgage would have been regarded as valid by the lex rei sitae.
9 Elmer T. Rabuya, Property (Manila, Philippines: Rex Printing Company, Inc.,
2008), 49
10 Ibid
11 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 330.
12 Blacks Law Dictionary 2nd Ed.
13 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 329.
14 Black's Law Dictionary
6
Mobilia Senquntuur Personam: Discussion of Old Rule
The old rule regarding personal properties is embodied in the
maxim mobilia senquntuur personam, or movables follow the person
of the owner. The rule grew up in Middle Ages when movable property
could easily be carried from place to place.15 There are three main
reasons that justified the doctrine of personal law following the
property. First is that, since personal property has no fixed situs, an
artificial one must be created. This artificial situs should be the
personal law of the owner. Second, the rule is simple, and would
apply wherever the location of the personalty. Third the rule is more
stable, since the rule would remain despite the change of location of
the immovable.16
The application of the rule, however, led to unsatisfactory and
unjust results. It also obstructed commercial intercourse and
disturbed the stability of many commercial transactions. 17 Hence,
this doctrine has been abandoned.
15 Pullman's Palace Car Co v Comm. of Pennsylvania 141 US 1882 as quoted in
Paras p.327
16 Story Commentaries on Conflict of Laws p.376 as quoted in Paras, p.327
17 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
7
of law by the parties, greater weight will be usually given to the lex
situs of the chattel at the time of the conveyance.21
With respect to acquisitions of title by operation of law, the
Second Restatement holds, as do most authorities, that they should
be governed by the lex situs. The reason for this, as stated by Salonga,
is that the State where a chattel is situated has the dominant interest
in determining the circumstances under which an interest in the
chattel may be acquired by operation of law.22
21 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995), 493
22 Ibid
23 Ibid
24 Ibid
25 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 330
8
in a foreign port, the choice between the law of the flag and the law
of the foreign port arises. It has been held that the law of the foreign
port is controlling.
26 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414-
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 331
27 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 331
9
Intangible properties have no physical existence, therefore
applying lex situs is impossible. To solve conflicts of law problems
concerning intangible property where situs is essential, an artificial
situs is attached to the intangible property. However, the question as
to which situs attaches is a problem in itself, which has been subject
to often conflicting theories.
Debts and other obligations or interests arising from contracts
are generally considered intangible properties by operation of law.
Recovery or involuntary attachment of such debts is generally
governed by the law of the place where summons may be effectively
served, which is usually the domicile of the debtor. Garnishment of
property to satisfy judgment debts must be filed in the court where
the service of summons may be validly effected.
As to voluntary assignment of debts, many theories posit
different applicable rules. The prevailing rule is similar to contracts,
lex loci voluntatis or lex loci intentionis30, where the law of the place
where performance may be demanded governs. An inherent defect of
this rule, however, is that there are many places where demand of
performance may be effected or service may be summoned. One
opposing theory espoused in Harris v. Balk31 posits the national law
or law of the domicile of the debtor and creditor, which is impractical,
since investigation of personal laws of both debtor and creditor is
inevitable. Another theory posits lex loci celebrationis32, or the law
where the assignment was created, but this law gives rise to peculiar
circumstances as when foreign law governs assignment merely
because the assignment was done while party was on vacation
outside his country.
For the purposes of taxation, in determining the situs of
intangibles in general, the old rule of mobilia sequntuur personam is
still applicable. Intangibles are taxed at the domicile of the owner or
creditor, since the legal title to the debt is present at his domicile and
is there taxable if the State so declares.
Administration of Debts
For the purpose of administering of debts, the situs is the place
where the assets of the debtor are actually situated. An assignee in
insolvency, for example, is required to take hold of the assets of the
debtor for eventual distribution among creditors; it is obvious that
the lex situs of the properties will be the determining law.
30 Westlake, A Treatise on Private International Law The Conflict of Laws
(London, England: C. Roworth and Sons, Bell Yard Temple Bar, 1858)
31 Harris v. Balk, 198 US 215 (1905)
32 Herbert F. Goodrich. Handbook of the Conflict of Laws: 3rd Edition (St Paul:
10
A debtor may be sued wherever process may be served upon
him. This fact justifies the decision which allows an administrator to
sue a foreign debtor who comes within the jurisdiction in which the
administrator permitted to sue. Power to collect the debt exists there,
as there is power to control over the debtor. If an administrator
wishes to recover property or debts outside the state, he must be
granted ancillary administrative power.
Ancillary administration will be granted by the courts of a state
where the tangible property of a non-resident decedent is located.
Power of control over the property both demands and justifies this
procedure.
In like any manner ancillary administration will be granted by
the courts of a state where a debtor of a non-resident decedent is
domiciled. Power of control over the debtor is required to give the
necessary power of control over the debt.
Negotiable Instruments
Different aspects of negotiable instruments are governed by
different conflict rules.
Negotiability or the non-negotiability of such instruments are
determined by the law which gives rise to the right embodied in the
instrument,33 i.e. the negotiability of Philippine checks are governed
by Philippine laws, and Swedish bills of exchange governed by
Swedish laws. The United States, however, adopts a different view,
where the law where the instrument was executed governs.34
As to transactions, Spears v. Wilson Sewing Machine Co. 35
explained that the obligation that gave rise to a negotiable instrument
is embodied in the instrument itself, hence transfer of the instrument
also transfers the right to demand fulfillment of the obligation. Being
analogous to transfer of chattels, the conflicts rule concerning
transfer, delivery, or negotiation of the instrument must be governed
by the law of the place of the instrument at the time of negotiation.
33M. Wolff. Private International Law (Oxford University Press, 1950)
34 Section 348, American Restatement
35 50 Mich 534
11
shares, is governed by lex loci voluntatis or lex loci intentionis,
generally the place where the certificate is delivered.36
Intellectual Properties
In the absence of international treaties, intellectual properties
such as patents, trademarks, and copyrights, are generally governed
and protected only by the state where they are granted. Registration,
degree of protection, and infringement are therefore governed by the
laws of the state granting protection to these intellectual properties.
General rule concerning intellectual property is registration
confers right, and in determining the rights of the registration of
patents, first to file rule and the right of priority rule applies. The
first to file rule dictates that a registered patent prevails over an
unregistered claim, and in case of application of different inventors,
the applicant with the earliest filing date or priority date owns the
patent. Conversely, the right of priority rule states that a patent
application filed by one who has previously applied for the same
invention in another country that affords similar privileges to
Filipinos shall be considered filed as of the date of filing application.
For instance, X who filed an application in France in 2009 has a prior
right over Y who filed an application in the Philippines in 2010.
In case of similar or identical goods, a trademark identical with,
confusingly similar to, or constitutes a translation of, an
internationally and locally well-known mark, whether registered in
the Philippines or not, are generally refused registration. In
determining whether a mark is well-known, knowledge of the relevant
sector of the public, rather than of the public at large shall be taken
into account.
It should be noted that under the Paris Convention, a foreign
national, even if not licensed to do or not actually doing business in
the Philippines may file an action for infringement, provided (a) its
mark is registered in the Philippines, or in the case of a trade name,
it has continuously been used in commerce in the Philippines; and
(b) its country extends reciprocal rights to nationals of the Philippines
or is a member of the Paris Convention.
36 Cheshire, Private International Law
12
Part II: Succession
Introduction
In the Philippines, succession is defined as a mode of
acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted
through his death to another or others either by his will or by
operation of law. This may be effected either by will or testate, or by
operation of law or intestate. When confronted with a conflict rule, it
is imperative to first resolve what law should be applied in
transmission of successional rights upon the death of the person.
There are two recognized theories in determining the proper law
for the transmission of successional rights: the unitary or single
system and the split or scission system.
Under the first theory, unitary or single system, there is only
one law that determines transmission whether real or personal
properties. An example of which is when the national law of the
deceased, otherwise known as national theory, or the domicile of the
deceased, otherwise known as domiciliary theory, is followed in the
transmission of both real and personal properties. On the second
theory, the split or scission system, the transmission of real property
is governed by the lex situs or the law of the place where the property
is located while transmission of personal property is governed by the
domicile of the deceased at the time of his death.
In our jurisdiction we follow the first theory or the unitary or
single system in transmission of properties regardless of the
character of the property and where the property be found.
13
solemnities in the making of the will. Intrinsic validity concerns itself
with the substance of the will.
14
or for the benefit of a third person.37 Filipinos cannot execute joint
wills, even if it is valid in the country where it was executed. The
rationale behind is to avoid the possibility of committing parricide.
However, the rule may vary if it is made by foreigner abroad and made
here in the Philippines.
Joint wills made by aliens abroad shall be considered as valid
in the Philippines if valid according to lex nationalii, lex domicilii, or
lex loci celebrationis. A joint will executed by an alien and a Filipino
citizen abroad will be valid as to the alien applying lex nationalii, lex
domicilii, or lex celebrationis but void as to the Filipino, the same
being against our public policy on joint wills.38
Joint wills made by aliens in the Philippines are void even if
valid under their lex nationalii or lex domicilii because our public
policy on joint wills may not be militated against.
37 Desiderio P. Jurado. Comments and Jurisprudence on Succession. (Manila,
Philippines: Rex Printing Company, 2009), 106.
38 Article 818, New Civil Code
15
Chapter 2: Revocation of Wills
Revocation, in succession, refers to the act of withdrawal or
declaring void a will previously made39. Wills may be revoked by the
testator at any time before his death, and any waiver or restriction of
this right is void40. Despite having numerous choices as to which law
governs the validity of the creation and enforcement of wills,
revocation is generally governed by lex domicilii, or the law of the
place where the testator is domiciled. As such, if the testator is
domiciled in the Philippines, revocation must be done in accordance
with Philippine laws, regardless of his nationality and the place of
revocation.
If the act of revocation takes place in the Philippines, it must be
done in accordance with Philippine laws, regardless whether the
testator is domiciled in this country or not.
If the revocation takes place abroad by a testator who is not
domiciled in the Philippines, it must be done either in accordance
with the laws of the place where the testator had his domicile at the
time of revocation or the law of the place where the will was made.41
However, according to Salonga, the rules on revocation leaves a
number of loose ends and doubts.
The provision seems to imply that the place of revocation is of
no importance. If construed strictly, the Philippines may not
recognize revocation done abroad by a non-domiciliary of the
Philippines in accordance with the laws of the place of revocation, as
opposed to revocation in accordance with the law of his domicile or
the execution of the will. This conclusion runs counter to the
principle of lex loci celebrationis, whose primacy is espoused in
Article 17(1) of the New Civil Code. Furthermore, such interpretation
impairs the will of the testator.
The shift from lex nationalii to lex domicilii as a test factor or
point of contact is questionable. It seems antithetical to completely
abandon lex nationalii, the law governing the creation of wills, in
determining the principal point of contact in revocation. Where
several points of contact are recognized in the creation of wills by
aliens abroad, limiting the point of contact for revocation to lex loci
celebrationis and lex domicilii seems illogical.
Likewise, there is apparently no provision with reference to
aliens domiciled in the Philippines who executed the act of revocation
abroad. On the other hand, a will made by an alien abroad, wherever
his domicile may be, will be considered formally valid in the
Philippines if formally valid accordance to his national law, or to the
law of his domiciled, or to the law of the place where it is made, it is
39 Black Law Dictionary
40 Art. 828, New Civil Code of the Philippines
41 Mison, Wills and Succession Better Explained, 2010
16
also formally valid if made according to the requirements of
Philippine Law42.
Summarily, the conflict rules in determining validity of the act
of revocation of the will may be subject to further legislative
enhancement to avoid existence of doubt.
42 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995)
43 Ibid
44 Ibid
45 In re Testate of Jose B. Suntay, 95 Phil 500 (1954)
17
procedural in nature, administration is governed by lex fori or the
law of the country where the action is brought.
46 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995)
47 In re Testate Estate if Butler, Gr.no. L-3677
48 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
18
principle, when wills are proved and allowed in a foreign country are
presented in the Philippines for execution, the court shall grant
letters of testamentary or letters of administration with a will
annexed and shall extend to all the estate of the testator in the
Philippines.
49 Ibid
50 Ibid
19
Conclusion
20
Bibliography
Goodrich, H. (1949). Handbook of the Conflict of Laws. St Paul: West
Publishing Co.
Jurado, D. P. (2009). Comments and Jurisprudence on Succession.
Manila: Rex Printing Company.
Paras, E. T. (2013). Civil Code of the Philippines Annotated (17th
Edition ed., Vol. II). Manila, Philippines: Rex Publishing
Company.
Rabuya, E. T. (2008). Property. Manila, Philippines: Rex Publishing
Company.
Salonga, J. (1995). Private International Law. Manila, Philippines:
Rex Printing Company.
Westlake, J. (1858). A Treatise on Private International Law - The
Conflict of Laws. London, England: C. Rowerth and Sons.
Pullman's Palace Car Co. vs Comm of Pennsylvania, 141 US 18
(1891).
Harris v Balk, 198 US 215 (1905).
In re Testate of Jose B. Suntay, 95 Phil 500 (1954).
In re Testate Estate of Basil Butler, GR No. L-3677 (1951).
Laurel v Garcia, GR No. 92013 (1990).
21