Conflict of Laws

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CHAPTER 3
SOURCES OF PRIVATE INTERNATIONAL LAW

SOURCES:
1. Codifications
- Old civil code
- First 4 articles of Chapter 1 of the Civil Code
- Code of Commerce and Insurance Code likewise have similar provisions

2. Special Legislation
o Many countries are able to fill in the gaps left by inadequate codifications
- Foreign Investments Act of 1991
- Corporation Code
- General Banking Act
- Trade Marks and Trade Names Law
- Patent Law
- Carriage of Goods by Sea Act
- Investment Incentives
- Export incentives

3. Multilateral Treaties and International Conventions
Two Methods of Avoiding or Minimizing Conflicts
1. To secure by international conventions or treaties the unification of the internal rules or laws of the various
countries or territorial units upon as many legal subjects as possible
Though progress has been achieved through this first method in the few departments of law
where it is imperative, such as air transportation and international sale of goods this form of
unification does not hold out bright prospects given the fundamental differences between
various legal systems such as those that follow the Anglo-Saxon system and those that adhere to
the Continental civil law system
Ex. Warsaw Convention of 1929, UNCITRAL
2. To unify the rules of Private International law so that a case involving a foreign element may be decided in the
same way, irrespective of the forum or place of litigation
International conventions and multilateral treaties that seek to achieve uniform treatment of
problems in the Conflict of Laws
Ex. Geneva Conventions of 1930 and 1931, Hague Conference

4. Bipartite Treaties
- A lot of bipartite treaties were entered into between states since 1920, seeking to promote international intercourse by
solving perplexing problems produced by divergent legal systems
- Example of Subjects: Status of aliens, judicial assistance, enforcement of foreign judgments

5. Case Law
- Because of inadequate provisions of many codes, case law is used, developed with the multiplication of supplementary
rules produced by judicial decisions

Three Categories of Judicial Decisions involving Conflict of laws
1. Those which are based on the assumption though not expressed in clear language, that only Philippine
internal rules govern any problem: this is noticeable in cases involving
contracts and personal status
2. Those which adopt Anglo-American rules and doctrines and
precedents without regard to the provisions contained in the Civil
Code: this is true in cases of validity of foreign divorces
3. Those cases which attempted to introduce Anglo-American rules and
doctrines, which a view not only to filling up the gaps by the Civil
Code, but also to merge and harmonize them with established Civil law
principles


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6. International Customs: Law of Nations
- Immovable property is governed by the of the situs (Lex Rei Sitae)
- Formalities of a legal act are governed by the law of the place where it is executed (Lex Loci Celebrationis)
- Tort is governed by the law of the place where the tortuous act was committed

7. The Philippine Constitution
- It contains certain provisions on citizenship and naturalization which are of paramount importance

8. Indirect Sources
1. Natural Law
o this presupposes a body of ideal precepts of universal validity for all people at all times and in all places derived
from the idea of what an ideal man would do and would not do, would claim and would concede

2. Treaties of jurists and writers
o They have actually influences courts and legislatures to adopt their views in the resolution of conflict problems
o Ex. Savigny and Story
NB: The Restatement is not a code that is binding to any state. It has only persuasive value that varies form state to state.

CHAPTER 4
JURISDICTION AND CHOICE OF LAW

Jurisdiction in international law
- The right of a State to exercise authority over persons and things within its boundaries, subject to certain exceptions.
- Sourced in the concepts of sovereignty, exclusive within and throughout the domain of the State, conditioned by the rights of
other States over certain persons and things which may be found within the boundaries of the former.
- Thus, a State does not assume jurisdiction over travelling sovereigns, ambassadors, and diplomatic representatives of other
States.

CLASSIFICATION OF JURISDICTION:

A. Legislative jurisdiction
- Occasionally used to denote power of a State to regulate or control, through rules of law, interests of persons in a thing, event,
situation.

B. Judicial Jurisdiction
- The legal authority of a State to exercise authority, through its courts or agencies, to hear and adjudicate cases.
- The power of a court or agency to hear and determine an issue upon which its decision is sought.
- Factors for Authority to hear cases:
1. Presence, submission, appearance of parties or one of them,
2. The doing of certain acts within the State,
3. The fact that the property involved in the litigation is in the forum,
4. The fact that parties are either citizens or residents of the State.
- In the absence of minimum contacts, judgement rendered by courts of one State may be refused recognition by others.

Types of Judicial Jurisdiction

1. Jurisdiction over the Subject Matter
- The power to hear and determine cases of general class to which the proceedings in question
belong and is conferred by the sovereign authority which organizes the court and
defines its powers. (given by law)
- Cannot be conferred by consent of parties or voluntary submission
- This is dormant, and exists only in the abstract, unless a person invokes it in a petition
or complaint.
2. Personal Jurisdiction
- Competence of a court to render a decision that will bind the parties to the suit
- Basis:
o Presence
o Domicile
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o Residence
o Nationality/citizenship
o Consent
o Appearance in an action
o Doing business in the State
o An act done in the State
o Causing an effect in the State by an act done elsewhere
o Ownership, use, or possession of a thing in the State
o Other relationships to the State making exercise of judicial jurisdiction reasonable
- Jurisdiction over the plaintiff is acquired when he invokes the aid of the court and voluntarily submits himself by institution of
the suit through proper pleadings.
- A State must have personal jurisdiction over the defendant in order to impose upon him, through the courts, a personal liability
or obligation in favour of the plaintiff. It may be through:
o Voluntary appearance unless he makes it clear that the purpose of his appearance is to question the jurisdiction of
the court over his person
o Personal or substituted service of summons

3. Jurisdiction over the res
- Action in rem, quasi-in rem and in personam
- Jurisdiction over the subject matter in controversy, regardless of the person who may be interested therein
- Purpose is not to impose a personal liability on anyone but to affect the interests of all persons in a thing, the State may render
through its courts a valid judgment as long as it has jurisdiction over the thing
- Examples: land registration proceedings, admiralty cases where purpose is to bind the whole world
- Quasi in rem to affect the interests of a particular person on a thing, like partition of land, to quiet title, foreclosure of
mortgage, to exclude from interest in shares of stocks in a Philippine corporation.

Jurisdiction In Re: Due Process Clause

(Pennoyer v. Neff)
- A more rigid doctrine where jurisdiction depends on the form of the proceeding and its presence or absence depends on the
kind of notice served on defendant.
- But this case was rejected later on RE: in rem and quasi-in rem cases. Commentators rejected the assumption here that a
proceeding against property is not a proceeding against the owner, and urged that the traditional notions of fair play and
substantial justice which govern a States power to adjudicate in personam should also govern its power to adjudicate personal
rights to property located in the State.
- Thus US SC since 1950s held that property cannot be subjected to a courts judgment unless reasonable and appropriate efforts
have been made to give the property owners actual notice of the action.

(International Shoe Co v. State of Washington)
- Jurisdiction assumed by courts must be consistent with the requirements of due process
- It must have reasonable basis, like in an action in personam, due process requires that if he not be present in the territory, he
has certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice

(McGee v. International Life insurance Co.)
- Texas insurance company. It absorbed an Arizona firm but it offered to carry the insurance policies of the latter company. The
offer was accepted by a resident of California who sent premiums to Texas. Service of summons was made under California
Statute, California court rendered judgment but Texas court refused to enforce.
- SC: the situation satisfied the minimum contacts for exercise of jurisdiction since the
policy was delivered in California, the premiums were mailed from there and the
insured was its resident when he died. In short, the California court has a reasonable
basis thus, it may be enforced in Texas.

(Shaffer v. Heitner)
- Where Mr H an owner of 1 share in a Delaware Corporaion with principal place of
business is in Phoenix, filed a stockholder derivative suit in Delaware against 28 officers.
H was not a resident of Delaware. He filed an order for the sequestration of the Delaware
property of defendants.
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- Defendants contend under international shoe case, they did not have minimum contacts to have jurisdiction in Delaware,
Delaware court assumed jurisdiction noting that it was a quasi in rem suit traditionally based on attachment not on contacts
between defendant and state.
- SC: all assumptions of state court jurisdiction, regardless of whether the proceedings are in rem, quasi in rem or in personam
must meet the standards of fair play and substantial justice
- Claims to property and property itself are 2 different basis, and completely unrelated to the plaintiffs cause of action.
- The only role of the property was to provide basis for bringing the defendant into court, the express purpose of Delaware
sequestration procedure was to compel the defendant to enter a personal appearance, this indirect assertion of jurisdiction
would be equally impermissible.
- One basic principle underlies all rules of jurisdiction: A state does not have jurisdiction in the absence of some reasonable basis
for exercising it, whether the proceedings are in rem, quasi in rem or in personam. To be reasonable, the jurisdiction must be
based on some minimum contacts that will not offend traditional notions of fair play and substantial justice.

Ways of Disposing Conflicts Cases (case involving a foreign element):
1. Dismiss the case due to lack of jurisdiction or refusal to assume jurisdiction over the case
2. Assume jurisdiction and apply internal law of the forum lex fori
3. Assume jurisdiction over the case and take into account or apply the law of some other State

1. DISMISS THE CASE - Forum non conveniens
- There is no element of discretion involved here.
- Even when jurisdiction is authorized, some courts by invoking forum non conveniens refuse to entertain conflicts cases because:
o Matter can be tried elsewhere
o Main aspect of case transpired in foreign jurisdiction where material witnesses reside there
o Belief of forum shopping
o Overcrowded dockets thus non-residents not extended local judicial facilities
- US even though it has jurisdiction, it will not entertain suit if it believes itself to be a SERIOUSLY INCONVENIENT FORUM,
provided that a more convenient forum is available to plaintiff.
- Consideration of justice and convenience to all concerned may lead the court in its discretion to refuse to exercise its
jurisdiction and to force the plaintiff to sue the defendant in a more appropriate available forum.
- This is to avoid hardship on defendant and court that can result in undue forum shopping.
- 3 FACTORS TO CONSIDER MOST CONVENIENT:
1. W/N forum is one to which parties may conveniently resort
2. W/N it is in a position to make an intelligent decision as to the law and the facts
3. W/N it has or is likely to have power to enforce its decision = (principle of effectiveness) judge has no right to pronounce
judgment if he cannot enforce it within its own territory

(Canada Malting Co v. J Patterson Steamship)
- Courts of equity and of law occasionally decline, in the interest of justice, to exercise jurisdiction, where the suit is between
aliens or non residents, or where for kindred reasons the litigation can more appropriately be conducted in a foreign tribunal

(gulf oil corporation v. Gilbert)
- The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is
authorized by the letter of the statute.

W/N a suit should be entertained or dismissed on the basis of the principle of forum non conveniens depends largely upon the facts
of each case and is addressed to the sound discretion of the court.
Hence, a Philippine court confronted by a conflicts case may refuse to assume jurisdiction on the ground of forum non conveniens in
spite of its having acquired jurisdiction over the subject matter and over the person of the
defendant.

(RP v. Marcos)
- Appeal from judgment of US district court granting preliminary injunction to the RP
prohibiting sale of 5 NY properties. Defense include act of state doctrine, sovereign
immunity and forum non conveniens
- District court refused to dismiss. Noting that plaintiff seeks to impress a constructive
trust only in regard to the properties located in NY.
- CA affirmed stating that forum non conveniens determinations are committed to the
sound discretion of the trial court. Here, the case involves ownership of specific properties in
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the state. And seeks to impress a constructive trust only on assets in NY. There is also no showing of an alternative forum
available and adequate to provide appropriate remedies in respect to the properties located therein.
- SC: noting that the complaint only seeks US recognition of a Philippine decree against marcos. The court stated that His
evidence of wrong doing would be reviewed only to the extent necessary to inquire whether the ultimate Philippine decree is
consistent with the law and policy of the US. This action is merely ancilliary to an eventual Philippine decree or judgment and
brought in the district only because the real estate is therein located. Affirmed.

2. Application of Internal/Domestic Law

- GR: No rule of Public Inernational law would be violated if the courts should decide to dispose of all cases, whether domestic or
conflicts cases, according to the internal law of the forum.
o EXPT: where a foreign sovereign, diplomatic official, or public vessel or property of another State is involved, or where
a state has by treaty accepted limitations upon its jurisdiction over certain persons or things
- The adoption of this policy of indifference, though common enough in other ages, is impracticable in the modern civilized world,
and nations have long found that they cannot by sheltering behind the principle of territorial sovereignty, afford to disregard
foreign rules of law merely because they happen to be at a variance with their own territorial system of law.

3 CASES WHERE LEX FORI HAS TO APPLY
1. Where applicable internal law is decreed
- Example: land involved in suit is located in the forum, lex situs is normally applied
- Absence of contrary stipulation in marriage settlements, property relations of Filipinos shall be governed by our laws.

2. Failure to plead and prove foreign law
- Our courts do not take judicial notice of foreign law. Only domestic law falls within the scope of judicial notice
- It must be involved in pleadings and proved during trial.
- It may be evidenced by official publication thereof or by a cop attested to by the officer having legal custody of the record, and
must be accompanied with a certificate of such officer having custody (secretary of embassy, consul general, consul, etc.
- If foreign law is unwritten, proved by oral testimony of expert witnesses, books, etc.

3. Case involves any of the exceptions to the application of foreign law, these are:
a. Enforcement of foreign law run counter to an important public policy of the forum,
b. Where the application of foreign law would infringe good morality as understood in the forum
c. When the foreign law is penal in nature
d. Where the foreign law is procedural in nature
e. When the question involves immovable in the forum
f. When foreign law is fiscal or administrative in natre
g. Where the application of foreign law would involve injustice or injury to the citizens or residents of the forum
h. Where the application of foreign law would endanger the vital interests of the State.

When any of these exceptions occur, the court may find itself obligated to apply internal law.

CHAPTER 5
APPLICATION OF FOREIGN LAW AND VARIOUS CHOICE-OF-LAW THEORIES

Why you should a Philippine court having jurisdiction apply foreign law under circumstances?
PROMOTE THE ENDS OF JUSTICE
Administration of justice demands that a State shall take into consideration the rules of other States. Otherwise, it will often
lead to unjust results.
AVOID FORUM SHOPPING
instead of being subjected to the law of the State that has the dominant interest in a
particular act or event, parties will be induced to shop for a forum whose internal law
favors their own interest, thereby encouraging evasion and frustrating the goals of
predictability and uniformity of result.
What are the advantages of applying the foreign law having the closest and mot dominant
connection with and act or event?
1. Permits parties to plan their transactions accordingly.
2. Discourage shopping around by a plaintiff for a favorable forum.
3. Protects their justified and rational expectations.
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4. Facilitates the determination of applicable law.
5. Answers the need of the modern international system, and
6. Achieves the long range goal of uniformity of result wherever the forum may be located.
Different choice-of-law theories:
1. Theory of Comity
2. Protection of Vested Rights Theory
3. Local Law Theory
4. Revolution in U.S. Conflicts Law

1. THEORY OF COMITY
Origin: Netherlands by Huber and the Voets.
States that the application of foreign legal systems in cases involving foreign element is proper because their non-
application would constitute a disregard of foreign sovereignties, a lack of comity towards foreign States.
Otherwise stated: the law of one State or nation cannot operate in another State or nation except by comity.
In the case of Hilton v. Guyot, SC held: no law has any effect, of its own force, beyond the limit of the sovereignty from which its
authority is derived. The extent to which the law of on nation, as put in force within its territory, whether by executive order, by
legislative act, or by judicial decree shall be allowed to operate within the dominion of our nation, depends upon what our
greatest jurists have been content to call the COMITY OF NATIONS.

What is comity?
In the legal sense, it is neither a matter of absolute obligation nor a mere courtesy or goodwill upon the other. But it is the
recognition which one nation allows within its territory, to the legislative, executive, or judicial acts of another nation, having
due regard both to international duty and convenience, and to the rights of its own citizens, or other persons who are under the
protection of its laws.

Comity signifies courtesy of one State towards another. Involves the idea of one State stepping back and as a matter of
courtesy, allowing the law of another State to operate within its territory. It supposes friendship and assumes the prevalence of
equality and justice.

Fallacies suffered by Theory of Comity
1. It is based on the erroneous idea that a State has a great interest in the application of its law by other States.
2. The application of foreign law does not spring from the desire of the sovereign of one State to show courtesy to the other
State whose law is being applied. Rather, it flows from the impossibility of otherwise determining whole classes of cases
without gross inconvenience and injustice to the litigants, whether natives or foreigners.
3. If foreign law were to be applied as a matter of option, it would be impossible to build up a definite body of rules of Private
International law. The determination of when foreign law should be recognized and applied would not be settled by rules
but by unregulated discretion.

2. PROTECTION OF VESTED RIGHTS THEORY
Origin: Anglo-Saxon courts by Dicey in England and Prof. Joseph Beale in US.
The applicability of foreign law depends on the principle of protection of vested rights.
This theory is based on the concept of territoriality, under which the court can apply only its own territorial law. It cannot
recognize foreign laws or enforce foreign judgments. But it I one of the tenets of justice that rights acquired in one country
must be recognized and legally protected in others.
That the function of Conflict of Laws is to give effect to rights acquired under the proper foreign law, and not to enforce
foreign law.
Fallacies suffered by the protection of Vested Rights Theory:
1. There is self-delusion in reasoning. Recognition of foreign-created right perforce carries with it
application of the foreign legal system in which the foreign right originates. The
obligation to recognize the right implies obligation to apply the foreign law. Hence, this
statement is merely a play of words.
2. Not all rights acquired under foreign laws are protected elsewhere, nor is their protection
always desirable.
Ex: A German domiciled in Scotland and died intestate, leaving a widow and a brother,
and movable property worth $10,000. Under German law, widow succeeds to half the
estate; under Scots law, she can only claim $500. An American court will apply the Scots
law which is the law of the domicile; while Philippine courts would apply the nationality of
the deceased, German law.
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3. The protection of rights and other interests is not the only consideration to be taken into account. The issue very often is whether a
disability existing under one law should be applied by a foreign court.
4. The law protects not only vested rights constituted abroad but often also the foreign legal relationship, capacities or powers out of
which rights, or the extinction of duties and charges, or the invalidity of acts may arise.
5. It is difficult and impractical to apply the theory where the material aspects of a transaction or event touch two or more States
equally or almost equally.
3. LOCAL LAW THEORY
Origin: by Anzilotti, an Italian jurist.
The court if the forum recognizes and enforces a local right, i.e., one created by its own law. This court applies its own rules to
the exclusion of all foreign rules. But inasmuch as it is confronted with a case containing a foreign element, it does not
necessarily apply the rule that would govern an analogous case purely domestic in character, but for social reason and practi cal
convenience takes into account the laws of the foreign country in question. It creates its own local right, but fashions it as nearly
as possible upon the law of the country in which the decisive facts have occurred.
Fallacies of Local law Theory:
1. There is no reason to assume duplication of rights where a foreign right is recognized by the courts in its original form. Such
duplication of a single object suggests a defect in vision.
However, this theory has a practical merit. By treating foreign law not as law but as fact and considering it along with other facts and
giving it whatever significance it deserves in a particular case, the court adopting the theory is able to take into account social and
economic considerations and the demands of expediency in the case before it.
4. REVOLUTION IN U.S. CONFLICTS OF LAW
The usual methods of disposing of cases in the Conflict of Laws are as follows:
1. The court or tribunal is first to characterize or identify the legal category into which the case before it falls- such as contracts,
property, domestic relations, tort, succession, and so forth.
2. Then apply the proper connecting factor for that category of case in order to choose the State or territorial jurisdiction whose
legal system will determine the parties respective rights, duties and other legal relations,.
With the collapse of Beales vested rights theory and of th First Restatement, the search for new approaches has resulted in what has
been called a revolution in U.S. conflicts of law and in the emergence of two themes concerning choice of law.
2 themes concerning choice of law:
1. Jurisdiction Selection- this raises the question whether any rule, formulated a priori, can usefully and justly be applied to
determine which substantive norm shall b the basis of decision in a conflicts case.
Requires the court to apply the law of the country or jurisdiction chosen by the conflicts rule, irrespective of the content of the
particular rule of law selected.
2. Rule-Selection- a method of solving or approaching a solution to the choice of which competing norms shall control a disputed
issue in a conflicts case.
Emphasizes a choice between different substantive rules of law, in light of the policies at issue.
More favored now by Americans.
The following are the different methods applicable in light of policies at issue:
A. The Second Restatement and the Law of the Most Significant Relationship Theory
The ff. are policies set fort by Prof. Elliot Cheatham and Willis Reese which should guide the courts in deciding choice-of-law questions
and in formulating rules for the choice of law.
1. Choice-of-law rules should be designed to make the international and interstate system work well.
2. The court should apply its own local law UNLESS there is good reason for not doing so. A court should not assume the burden of
ascertaining and applying the law of another State without good reason. It should apply its own internal law to matters that are
not likely to affect the ultimate outcome of the case, such as: rules of evidence, pleading and methods of service.
3. The court should consider the purpose of its relevant local law rule in determining whether to apply its own law or the law of
another State.
4. Choice-of-law rules should seek to achieve certainty, predictability and uniformity of result. They should be simple and easy to
apply.
5. The court should seek to protect the justified expectations of the parties.
This policy can only operate in situations where the parties may b said to have given
careful thought to the legal consequences of their transactions, as in contracts. Hence
the contracting parties are allowed, within broad limits, to choose the law that will
govern their contract.
6. The court should seek to apply the law of the State of the dominant interest. meaning,
the State whose interests are most deeply affected should have its law applied. Example,
in land cases, the law of the State where the land is located should govern.
7. The court should seek to further the fundamental policy underlying the particular field of
law.
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Ex: where the local law embodies a strong public policy, such as in Usury Law or the Anti-Dummy Law.
8. The court should seek to attain justice in the individual case.
Note: the relative importance of these policies varies from situation to situation, depending on the issue involve in a case before the
court. Like:
In contracts- two policies are particularly relevant:
- The protection of the parties justified expectations.
- The need for certainty, predictability and uniformity of result.
In torts- first 2 policies are always relevant.
- But the policy in favor of the law of the State of the dominant interest or of the most significant relationship deserves
special emphasis.
In land issues- protection of parties justified expectation,
- Certainty, predictability and uniformity of result,
- The law of the State of the dominant interest

B. State-Interest Theory
Formulated by Prof. Brainerd Currie. Focused on the policies underlying the internal laws of 2 or more States in apparent conflict.
A choice-of-law case confront a court wit the problem of analyzing the policies that are in competition in the local rules vying for
application.
He rejected the rules of choice-of-law of the traditional type and suggested the ff. rules as guide:
1. When a court is asked to apply the law of a foreign state different from the law of the forum, it should inquire into the policies
expressed in the respective laws and into the circumstances. The court should employ the ordinary processes of construction
and interpretation.
2. If one State has the interest in applying its own policy and the other has none, it should apply the law of the only interested
State.
- Ex: lex situs rule
3. If theres conflict in the interests of States the court should reconsider. A more moderate and restrained interpretation of the
policy of one State or the other may avoid conflict.
4. If the conflict between the legitimate interests of two States is unavoidable, it should apply the law of the forum.
5. If the forum is disinterested, but an unavoidable conflict exists between the interest of two other States, and the court cannot
with justice decline to adjudicate the case, it should apply the law of the forum, at least if that law corresponds with the law of
one of the other States. The court may decide the case by a candid exercise of legislative discretion, resolving the conflict as it
believes it would be resolved by a supreme legislative body having power to determine which interest should be required to
yield.

C. Cavers principle of Preference
- Formulated by Prof. David Cavers in 1965.
- Acc. to him, the choice of law should not be the result of the automatic operation of a rule or principle of selection but of
search for a just decision.
- The selection of governing law ought to b a process of choice between rules of law than a choice between jurisdictions, and
a court choosing between the (internal) laws of two States must look at the content of the laws with reference to the facts
in the particular case and with reference to the social policies inherent in them a they relate to the facts.
- solutions which are not only because they provide a fair accommodation of conflicting state policies but because they
afford fair treatment to individuals who are caught in conflict between state policies.

D. The Functional Approach
- The approach aims at solutions that are the rational elaboration and application of the policies and purposes underlying
specific legal rules and legal system as a whole.
- 1
st
, they locate the concerned jurisdiction in conflicts case.
Concerned jurisdiction- means one that has expressed the interest of regulating
an aspect of the multistate transaction in question.
- 2
nd
, they construct for each jurisdiction a regulating rule that takes account both
of relevant policies expressed through the jurisdictions domestic rules and of
policies peculiar to multistate transactions as distinguished from wholly domestic
transactions.
- Believe that many of the true conflicts that remain after these steps can be
resolved by applying the rules of the jurisdiction predominantly concerned when
jurisdiction has ultimate, effective control and in cases in which all concerned
jurisdiction agree that one has a predominant concern.
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E. Choice-influencing considerations
- By Prof. Robert Leflar.
- Acc. to him there are 5 basic considerations in resolving choice-of-law problems, these are:
1. Predictability of results
2. Maintenance of interstate and international order
3. Simplification of the judicial task
4. Advancement of the forums governmental interests
5. Application of better rule of law
- One determining consideration in this better rule concept is whether one of the competing legal rules, compared with the
other domestic rule, serves the modern requirement of the international order, or whether it is anachronistic in that it is
behind the times.

F. Comparative approach
- By Dr. Ernest Rabel
- Made a comparison of the various legal systems with reference to specific problems in each field- persons and domestic
relations, obligations, property, succession, contracts, torts and business associations.
Philippine Courts
- have a natural inclination to apply Philippine internal law to conflicts problems.
- Our courts, as a general rule, are precluded from taking judicial notice of foreign law.

CHAPTER 6
ASCERTAINMENT AND PROOF OF FOREIGN LAW

Rules of Substance distinguished from Rules of Procedure

This choice-of-law process assumes a distinction between procedural and substantive law.
Procedural rules- concern method of presenting to a court the operative facts upon which legal relations depend.
- It is the available judicial machinery and its mode of operation.
- It regulates such matters as venue, form of action, the sufficiency of pleadings, the rules for service of process, the
admissibility and effect of evidence, the method of appeal, the mode execution of judgments, and like matters.
Substantive rules- concern the legal effect of those facts after they have been established.

1. The forum applies its own procedural law
- Traditional rule is that the forum will apply its own internal procedural law on all these non-substantive matters.
- Reason: Practical necessity and simplification of judicial task. It is unrealistic to expect them to know and master a new
judicial procedure each time a conflicts problem is brought to them.

2. Foreign law limited to substantive aspects
- Under the Philippine law, every person is presumed to know the domestic law.
- No such presumption exists with respect to foreign law.
- Art. 3 of the Civil Code states that Ignorance of the law excuses no one from compliance therewith, refers to domestic
law, not to foreign law.
- Ignorance of a foreign law is ignorance of a fact and not ignorance of law.
- The Philippine court is presumed to know the domestic law and is bound to take judicial notice of all the local laws. But thi s
principle does not apply with reference to foreign law.

How Foreign Law is Ascertained?
- In Philippine, American and English law, foreign law is like any fact that must be
pleaded and proved by a party invoking it.
- Common law courts are presumed not to know the laws of foreign States. The
law of any State than the forum is not law at all, but fact.
- Since foreign law was a matter of fact, it should be pleaded by the party invoking it
and proved by evidence supplied by experts on the said law to the court.
- The court could not take judicial notice of the laws of other States.

Development of Philippine Law
- GR: the foreign law must be proved and pleaded as a fact.
Conflict of Laws
Book Summary
Abad, Bagang & Mananquil
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- XPN: except in exceptional instances where our courts are evidently familiar with foreign laws such as the Spanish Civil
Code and allied legislation, common law doctrines and rules from which many of our laws were derived, judicial notice may
be taken of them.

Comment to exception: what is within the actual knowledge of the court is much too vague, even in light of the instances cited by the
court, considering the prevailing practice with respect to judicial notice in Philippine courts.
Proof of Foreign Law
General rule: the party who claims that the foreign law I applicable to the fact in issue has the burden of proving the content of foreign
law.

Under Philippine law, foreign law I proved in two ways and there must be distinction between written and unwritten law.

Written law- may be evidenced by:
1. An official publication thereof, or
2. A copy attested by the officer having the legal custody of the record or by his deputy,
3. Accompanied with a certificate that such office had custody.

The certificate may be made by:
a. Secretary of embassy or legation
b. Consul general
c. Consul
d. Vice-consul
e. Consular-agent, or
f. Any officer in the foreign service of the Philippine stationed in the foreign country in which the record is kept and authenticated
by the seal of his office.

Unwritten law- the oral testimony of expert witnesses is admissible, as are printed and published books of reports of decisions of the
courts of the country concerned if proved to be commonly admitted is such courts.

Note: The consul-general is not necessarily an expert on Chinese Law on procedure.

Effect of Failure to Plead or Prove Foreign Law
Where a foreign law is not properly pleaded or proved, several approaches are open to a court:

1. To dismiss the case, with judgment for the defendant, on the theory that the plaintiff relying on the foreign law had failed to
prove an essential part of his case.
This method prevails in Germany and countries influenced by German rules of Private International Law.
2. Not to dismiss the case, but to hold that where foreign law is not properly pleaded or proved, the presumption of identity or
similarity arises, namely, that foreign law is the same as the domestic law.
Followed by the Philippine SC.
3. Not to dismiss the case, but to assume that by failing to plead or prove foreign law, the parties acquiesced in having their
controversy determined by law of the forum.
Achieves the same result as the second approach.

Chapter 7
EXCEPTIONS TO APPLICATION OF FOREIGN LAW

Nature and Basis of Exceptions
- Under the Traditional View, foreign law is not applied in the forum in the following
cases:
1. Where the enforcement of foreign law is contrary to an important public policy
of the forum
2. Where application of foreign law would be against good morality in the wider sense
of the term as understood in the forum
3. Foreign Penal Law
4. Foreign Procedural Law
5. Questions relating to immovable property in the forum
6. Foreign Fiscal or Administrative law
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Book Summary
Abad, Bagang & Mananquil
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7. Where the application of law would involve injustice or injury to the residents of the forum
8. Where application of foreign law would endanger the foreign relations or vital interests of the state


Exceptions Recognized in the Philippines
- Two Kinds of Rules on an Imperative Character (Savigny)
1. Rules that are enacted merely for the sake of persons who are the possessors of rights
o These become inapplicable where according to rules of Private International Law, a foreign legal system governs
the case
2. Rules that are not made solely for the benefit of individuals but rest on moral grounds or on public interest
o Intended to be applied in all circumstances and cannot be rendered ineffective by foreign laws and judgments
- The forums public policy or interest whenever it is clearly at stake in a given conflicts problem, should take precedence over the
application of the laws of other states

THE EXCEPTIONS
1. Where the enforcement of foreign law is contrary to an important public policy of the forum
- Foreign law will not be applied where its enforcement would run counter to some important policy of the tate of the forum
- Public policy has been identified with the civil law idea of public order however today, it means more than just the
maintenance of public order and peace
- Mere dissimilarity between foreign law and local law will not render the enforcement of the foreign law in violation of the
forums public policy
- Foreign law should be denied enforcement in the forum only when it violates some fundamental principle of justice, some
prevalent conception of good morals and some deep-rooted tradition of the common weal.
- Two Kinds of Public Policy
1. Operates no matter where the evey or transaction takes place
2. Operates only where the event or transaction takes place in the forum and is not offended in the transaction is
completed abroad
- Public Policy may be used by the court in different ways
1. Refuse to entertain the case because enforcement of the action is against public policy
2. Entertain the case but apply its own domestic law to decide the controversy in favor of the plaintiff
3. Entertain the case but invoke its own public policy in order to apply the forum domestic law
- Dangers of Using Public Policy as an excuse not apply foreign law
o My be no more than an intolerable affectation of superior virtue
o May provide an easy excuse for the forum to apply internal law and defeat the purpose of this subject

2. Where application of foreign law would be against good morality in the wider sense of the term as understood in the forum
- Good morality or bonos mores - includes contracts which though valid under their proper law would be illegal or immoral if
they were governed by the lex fori
- Doctrine of Disparitas Cultas - consider local concepts of morality as universally established and applicable in all situations
- Ex. Marriages between first cousins, polygamy, and divorce of foreign spouse

3. Foreign Penal Law
- no society takes concern in any crime but what is hurtful to itself
- It does not only mean that our courts cannot base a conviction for criminal offense on the breach of a foreign penal law, but
it also implies that they will refuse to enforce foreign judgments given in penal proceedings
- A state may recognize foreign penal laws for various purposes, though it will not directly enforce such laws in its jurisdiction
- The point of difficulty in applying this exception is in determining when a foreign law is penal

4. Foreign Procedural Law
- Foreign procedural law is generally not enforces or recognized in the forum, it is
the forums procedural law that is applied to conflicts cases
- It is the forums procedural law that is enforced for practicalitys sake
- If foreign procedural law were to be applied, it would involve a making over of the
machinery for the administration of justice in the forum
- The forum is charged with the task of making a distinction between the rules that
are procedural and those that are substantive

5. Questions relating to immovable property in the forum
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Abad, Bagang & Mananquil
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- All legal systems are in accord on the principle that ownership of an immovable and other rights in immovable are subject
to the lex situs (lex rei sitae)
- The rationale is found in the nature of real property immobility

6. Foreign Fiscal or Administrative law
- The exception refers to foreign revenue law, tax laws, local rates and the like
- Reason: a sovereign has no legal duty to assist foreign governments in the financing of their activities
- No country takes no notice of the revenue laws of another, however, it does not mean that a foreign revenue law is to be
totally ignored, the court may give particular importance to the policy of the forum in maintaining harmonious relations
with another state and may not countenance any transaction
- Circumstances may require that the existence of a foreign fiscal law be recognized

7. Where the application of law would involve injustice or injury to the residents of the forum
- The traditional rule is to the effect that foreign law will not be applied where it would involve injustice/ injury to the people
of the forum
- Where the application of a foreign law would expose the residents of the forum to a just liability even tradition bound
writers admit that the exception would not hold;

8. Where application of foreign law would endanger the foreign relations or vital interests of the state
- Many courts consider this particular exception as included in the first exception since it is clear that it would also be against
public policy

CONCLUSION:
- If a firm body of rules of choice of law is to be developed, judicious use of this device (exceptions) under the control of the
forum should be adopted.

CHAPTER 8
NATURE OF CONFLICTS RULES AND THE PROBLEM OF CHARACTERIZATION

Conflict of Laws (private international law)
- Part of the national law of every state - Together with local or domestic laws

Ordinary internal rules v. Conflict of Law

Ordinary internal rules
- authorize, command, or prohibit a certain mode of conduct (provisions in the Code of Commerce and RPC) where its legal
effects are immediately indicated.
- Whether an act is allowed or prohibited is immediately solved.

Conflict of Law rules
- Decide only which law or jurisdiction will give the final solution to the question.
- Art 16, par 1 of the NCC Real property as well as personal property is subject to the law of the country where it is situated.
- Art 17, par 1 NCC the forms and solemnities of contracts, will, and public instruments, shall be governed by the laws of the
country in which they are executed.

2 PARTS OF CONFLICTS RULE:
- In Art 16:
1. Property whether real or personal
2. Subject to the law of the country where it is situated.
o First part defines the OBJECT starting point of analysis is the factual situation,
event or operative fact.
o Second part- legal consequences of the operative facts stated in the first. This
prescribes the municipal law to which the question should be referred and
connected.
An essential element in conflicts rules is the indication of a test or connecting factor or point
of contact.
o Point of contact in the above example the country where property is situated.
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Abad, Bagang & Mananquil
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Conflicts rules invariably consists of a factual relationship and a connecting factor or point of contact
(situs/res/celebration/performance/wrongdoing)

TEST FACTORS or POINTS IN CONTACT
- Circumstances must be taken into consideration:
o Nationality
o Domiciliary
o Residency
o Place of sojourn / origin
o Locus actus (place of acting)
o Situs rei (place of the thing)
o Seat of legal or juridical person corporation
o Place where intend to come to effect or performance of contractual duties
o Lex loci intentionis (intent of the parties)
o Lex fori place where the judicial or administrative proceedings are instituted or done
o The flag of a ship

Conflicts rules in the Philippines can be found in:
o Art 15, 16, and 17 of the NCC
o They point to the geographical location as the source of the applicable law that will give the ultimate solution to the
problem at hand
o Example: liability for tort traditionally in the place of wrong doing.
But when territorially-oriented rule emerge like whose standard, what is place of wrong, the frame of reference
becomes absurd.

3 stages in analysis of conflicts problems
1. Characterization of the subject or question
2. Selection of proper law
3. Application of such law

Characterization
- Classification or qualification, is the process of assigning a disputed question to its correct legal category

3 stages in Characterization:
1. Problem of Characterization
o Characterize first the legal problem in order to get the proper solution if it deals with torts, RPC, corpo, etc
o If this problem is difficult enough in the municipal law, it doubles in conflicts laws where one has to contend 2
competing legal systems.
o Difficulty arises from the fact that the conflicts situation or legal relation may be classified by lex fori in a way that it be
different from lex cause law of state which transaction is closely connected.
o Solution: that which grounds on necessity and convenience; while it is for the lex fori to make the characterization, the
courts should not be bound entirely by the internal law of the forum, rather he should find guidance in the principles of
his countrys private international law.
- The comparative approach that the factual situation which is the true premise of any conflicts rule must be referable
indifferently to foreign as well as to domestic substantive law.
o Hence, if legal terms are used to describe this factual situation, they must be susceptible of interpretation with
reference to foreign institutions, even those unknown to the lex fori.
2. Characterization of the point of contact or connecting factor
o The majority view seem to be that the connecting factor should generally be
determined by the law of the forum.
o 2 Exceptions:
Question whether tangible property is movable or immovable should
not be governed by the lex fori but by the law of the situs, an
understandable submission to the interest and power of the law of
place where immovable is (lex rei sitae)
If forum is only a place of trial, and does not have significant connection
with the occurrence or the parties, a common characterization placed
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Abad, Bagang & Mananquil
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upon it by the law of all the foreign states or countries involved should be accepted.
3. Extent of application or the delimitation of the law that is chosen as applicable to the conflicts case
o Apply the selected proper law to the factual situation to decide what legal consequences result from that situation

Characterization of the rule of law (procedural or substantive)
- Foreign procedural law will not be applied in the forum, on procedural matters of a conflicts case, the lex fori will apply its own
procedural law, and only the substantive law of the appropriate foreign legal system will be applied in the forum.
- Prescriptive period is procedural in other countries like in france.
- Doctrine of Secondary Characterization
o The English forum makes an initial or primary characterization by classifying the matter as a contract problem and
choosing French law as applicable to the Promissory note, French law having been selected, it must be applied with its
attendant or secondary characterization = apply French prescriptive rule.
o The exception in favour of local procedural law does not apply since the French prescriptive rule is considered
substantive, by this process of secondary characterization
- But this does not work in all cases.

Foreign law once chosen should be applied entirely except where the forum would unduly hinder or inconvenience itself.