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Commercial Law Reviewer Ateneo

Political Law (Constitutional Law) Article I

Civil Law Conflict of Laws


DEC 20
Posted by Magz

CONFLICTS OF LAWS; Definition:


1.
That part of the law of each state or nation which determines whether, in dealing with a legal
situation, the law or some other state or nation will be recognized, given effect, or applied (16
Am Jur, 2d, Conflict of Laws, 1).
2.
That part of municipal law of a state which directs its courts and administrative agencies,
when confronted with a legal problem involving a foreign element, whether or not they should
apply a foreign law/s (Paras).
DISTINGUISHED FROM PUBLIC INTERNATIONAL LAW
BASIS

Nature

CONFLICT OF LAW

LAW OF NATIONS

Municipal in character

International in character
Sovereign states and other
entities possessing international
personality, e.g., UN; governs
states in their relationships
amongst themselves

Persons
involved

Dealt with by private


individuals; governs individuals
in their private transactions
which involve a foreign element

Transactions
involved

Private transactions between


private individuals

Generally affected by public


interest; those in general are of
interest only to sovereign states

Resort to municipal tribunals

May be peaceful or forcible

Remedies
and
Sanctions

Peaceful: includes diplomatic


negotiation, tender & exercise of
good offices, mediation, inquiry &
conciliation, arbitration, judicial
settlement by ICJ, reference to
regional agencies
Forcible: includes severance of
diplomatic relations, retorsions,
reprisals, embargo, boycott, nonintercourse, pacific blockades,
collective measures under the UN

Charter, and war.


SOURCES:
Direct:
1. Constitutions
2. Codifications
1.
2.
3.
4.

Special Laws
Treaties and Conventions
Judicial Decisions
International Customs

Indirect:
1. Natural moral law
1.

Work of writers

TERMS:
Lex Domicilii law of the domicile; in conflicts, the law of ones domicile applied in the choice of
law questions
Lex Fori law of the forum; that is, the positive law of the state, country or jurisdiction of whose
judicial system of the court where the suit is brought or remedy is sought is an integral part.
Substantive rights are determined by the law where the action arose (lex loci) while the
procedural rights are governed by the law of the place of the forum (lex fori)
Lex Loci law of the place
Lex Loci Contractus the law of the place where the contract was made or law of the place
where the contract is to be governed (place of performance) which may or may not be the same
as that of the place where it was made
Lex Loci Rei Sitae law of the place where the thing or subject matter is situated; the title to
realty or question of real estate law can be affected only by the law of the place where it is
situated
Lex Situs law of the place where property is situated; the general rule is that lands and other
immovables are governed by the law of the state where they are situated
Lex Loci Actus law of the place where the act was done
Lex Loci Celebrationis law of the place where the contract is made
Lex Loci Solutionis law of the place of solution; the law of the place where payment or
performance of a contract is to be made
Lex Loci Delicti Commissi law of the place where the crime took place
Lex Mereatoria law merchant; commercial law; that system of laws which is adopted by all
commercial nations and constitute as part of the law of the land; part of common law

Lex Non Scripta the unwritten common law, which includes general and particular customs and
particular local laws
Lex Patriae national law
Renvoi Doctrine doctrine whereby a jural matter is presented which the conflict of laws rules of
the forum refer to a foreign law which in turn, refers the matter back to the law of the forum or a
third state. When reference is made back to the law of the forum, this is said to be remission
while reference to a third state is called transmission.
Nationality Theory by virtue of which the status and capacity of an individual are generally
governed by the law of his nationality. This is principally adopted in the RP
Domiciliary Theory in general, the status, condition, rights, obligations, & capacity of a person
should be governed by the law of his domicile.
Long Arm Statutes Statutes allowing the courts to exercise jurisdiction when there are minimum
contacts between the non-resident defendant and the forum.
WAYS OF DEALING WITH A CONFLICTS PROBLEM:
1.
Dismiss the case for lack of jurisdiction, or on the ground of forum non-conveniens
DOCTRINE OF FORUM NON CONVENIENS the forum is inconvenient; the ends of justice would be
best served by trial in another forum; the controversy may be more suitably tried elsewhere
1.
Assume jurisdiction and apply either the law of the forum or of another state
1.
i.
A specific law of the forum decrees that internal law should apply
1.
APPLY INTERNAL LAW forum law should be applied whenever there is good reason to do so;
there is a good reason when any one of the following factors is present:
Examples:

Article. 16 of the Civil Code real and personal property subject to the law of the country
where they are situated and testamentary succession governed by lex nationalii

Article 829 of the Civil Code makes revocation done outside Philippines valid according to law
of the place where will was made or lex domicilii

Article 819 of the Civil Code prohibits Filipinos from making joint wills even if valid in foreign
country
1.
ii. The proper foreign law was not properly pleaded and proved
NOTICE AND PROOF OF FOREIGN LAW

As a general rule, courts do not take judicial notice of foreign laws; Foreign laws must be
pleaded and proved

Effect of failure to plead and prove foreign law (3 alternatives) of the forum court:
(a) Dismiss the case for inability to establish cause of action
(b) Assume that the foreign law of the same as the law of the forum
(c) Apply the law of the forum
1.

The case falls under any of the exceptions to the application of foreign law

Exceptions to application of foreign law:

(a) The foreign law is contrary to the public policy of the forum
(b) The foreign law is procedural in nature
(c) The case involves issues related to property, real or personal (lex situs)
(d) The issue involved in the enforcement of foreign claim is fiscal or administrative
(e) The foreign law or judgment is contrary to good morals (contra bonos mores)
(f) The foreign law is penal in character
(g) When application of the foreign law may work undeniable injustice to the citizens of the
forum
(h) When application of the foreign law might endanger the vital interest of the state
2.

APPLY FOREIGN LAW when properly pleaded and proved

THEORIES WHY FOREIGN LAW SHOULD BE GIVEN EFFECT


1.
Theory of Comity foreign law is applied because of its convenience & because we want to
giveprotection to our citizens, residents, & transients in our land
2.
Theory of Vested Rights we seek to enforce not foreign law itself but the rights that have
been vested under such foreign law; an act done in another state may give rise to the existence
of a right if the laws of that state crated such right.
3.
Theory of Local Law adherents of this school of thought believe that we apply foreign law not
because it is foreign, but because our laws, by applying similar rules, require us to do so; hence,
it is as if the foreign law has become part & parcel of our local law
4.
Theory of Harmony of Laws theorists here insist that in many cases we have to apply the
foreign laws so that wherever a case is decided, that is, irrespective of the forum, the solution
should be approximately the same; thus, identical or similar solutions anywhere & everywhere.
When the goal is realized, there will be harmony of laws
5.
Theory of Justice the purpose of all laws, including Conflict of Laws, is the dispensing of
justice; if this can be attained in may cases applying the proper foreign law, we must do so
Rules on Status in General
Factual Situation

Point of Contact

Beginning of personality of natural


person

National law of the child (Article 15, CC)

Ways & effects of emancipation

Same

Age of majority

Same

Use of names and surnames

Same

Use of titles of nobility

Same

Absence

Same

Presumptive death & survivorship

Lex fori (Article 43, 390, 391, CC; Rule


131 5 [jj], Rules of Court)

Rules on Marriage as a Contract


FACTUAL SITUATION

Celebrate
d Abroad

Between Filipinos

Lex loci celebrationis is without


prejudice to the exceptions under
Articles 25, 35 (1, 4, 5 & 6), 36, 37 &
38 of the Family Code (bigamous &
incestuous marriages) & consular
marriages

Between Foreigners

Lex loci celebrationis EXCEPT if the


marriage is:
1. Highly immoral (like
bigamous/ polygamous
marriages)
2. Universally considered
incestuous (between brothersister, and ascendantsdescendants)

Mixed

Apply 1 (b) to uphold validity of


marriage

Between Foreigners
Celebrate

POINT OF CONTACT

National law (Article 21, FC)


PROVIDED the marriage is not
highly immoral or universally

considered incestuous)
d in RP

Mixed

National law of Filipino (otherwise


public policy may be militated
against)

Marriage by proxy (NOTE: a


marriage by proxy is considered
celebrated where the proxy appears

Lex loci celebrationis (with prejudice


to the foregoing rules)

Rules on Marriage as a Status


FACTUAL SITUATION

POINT OF CONTACT

Personal rights & obligations between


husband & wife

National of husband(Note: Effect of


subsequent change of nationality:
1. If both will have a new nationality
the new one
2. If only one will change the last
common nationality
3. If no common nationality
nationality of husband at the time
of wedding)

Property relations bet husband & wife

National law of husband without


prejudice to what the CC provides
concerning REAL property located in the
RP (Article 80) (NOTE: Change of
nationality has NO EFFECT. This is
the DOCTRINE OF IMMUTABILITY
IN THE MATRIMONIAL
PROPERTY REGIME)

Rules on Property
FACTUAL SITUATION

POINT OF CONTACT

Real property

Lex rei sitae (Article 16, CC)

Exception

Successional rights

National law of decedent (Article 16


par. 2, CC)

Capacity to succeed

National law of decedent (Article.


1039)

Contracts involving real property


which do not deal with the title

The law intended will be the proper


law of the contract (lex loci

thereto

voluntantis orlex loci intentionis)

Contracts where the real property is


given as security

The principal contract (usually loan)


is governed by the proper law oft the
contract (lex loci voluntatis or lex
loci intentionis)NOTE: the mortgage
itself is governed by lex rei sitae.
There is a possibility that the
principal contract is valid but the
mortgage is void; or it may be the
other way around. If the principal
contract is void, the mortgage will
also be void (for lack of proper cause
or consideration), although by itself,
the mortgage could have been valid.

Tangible personal property (choses in possession)


1

In General

Lex rei sitae (Article. 16, CC)

Exceptions: same as those for real


property

EXCEPTION: same as those for real


property EXCEPT that in the
example concerning mortgage, the
same must be changed to pledge of
personal property)

Means of Transportation

Vessels

Law of the flag (or in some cases,


place of registry)

Other means

Law of the depot (storage place for


supplies or resting place)

Things in transitu (these things have


a changing status because they move)
Loss, destruction, deterioration

Law of the destination (Article. 1753,


CC)

Validity & effect of the seizure of the


goods

Locus regit actum (where seized)


because said place is their
temporarysitus

Disposition or alienage of the goods

Lex loci volutantis or lex loci

intentionis because here there is a


contract

FACTUAL SITUATION

POINT OF CONTACT

INTangIBLE PERSONAL PROPERTY


(CHOSES IN ACTION)
1

Recovery of debts or involuntary


assignment of debts (garnishment)

Where debtor may be effectively served


with summons (usually the domicile)

Voluntary assignment of debts

Lex loci voluntatis or lex loci


intentionis(proper law of the contract)

Other Theories:
1. National law of the debtor or creditor
2. Domicile of the debtor or creditor
3. Lex loci celebrationis
4. Lex loci solutionis
3

Taxation of debts

Domicile of creditor

Administration of debts

Lex situs of assets of the debtor (for these


assets can be held liable for the debts)

Negotiability or non-negotiability of an
instrument

The right embodied in the instrument


(for example, in the case of a Swedish
bill of exchange, Swedish law
determines its negotiability)

Validity of transfer, delivery or


negotiation of the instrument

In general, situs of the instrument at the


time of transfer, delivery or negotiation

Effect on a corporation of the sale of


corporate shares

Law of the place incorporation

Effect between the parties of the sale of


corporate shares

Lex loci voluntatis or lex loci intentionis


(proper law of the contract) for this is
really a contract; usually this is the place
where the certificate is delivered)

Taxation on the dividends of corporate


shares

Law of the place of incorporation

10

Taxation on the income from the sale of


corporate shares

Law of the place where the sale was


consummated

Franchises

Law of the place that granted them

Goodwill of the business & taxation


thereto

Law of the place where the business is


carried on

Patents, copyrights, trademarks, trade


names

In the absence of a treaty, they are


protected only by the state that granted
themNOTE: foreigners may sue for
infringement of trademarks and trade
names in the RP ONLY IF Filipinos are
granted reciprocal concessions in the
state of the foreigners

11

12

13

Wills, Succession & Administration of Conflict Rules


FACTUAL SITUATION

POINT OF CONTACT

Extrinsic Validity of Wills


1

Made by an alien abroad

Lex nationalii OR lex domicilii OR RP


law (Article 816, CC), OR lex loci
celebrationis(Article 17(1))

Made by a Filipino abroad

Lex nationalii OR lex loci


celebrationis(Article 815)

Made by an alien in the RP

Lex nationalii OR lex loci


celebrationis(Article 817)

FACTUAL SITUATION

POINT OF CONTACT

Extrinsic Validity of Joint Wills (made in the


same instrument)
1

Made by Filipinos abroad

Lex nationalii (void, even if valid where


made) (Article 819)

Made by aliens abroad

Valid if valid according to lex


domicilii orlex loci celebrationis (Article
819)

Made by aliens in the RP

Lex loci celebrationis therefore void even


if apparently allowed by Article 817
because the prohibition on joint wills is a
clear expression of public policy

Intrinsic Validity of Wills

Lex nationalii of the deceased


regardless of the LOCATION &
NATURE of the property (Article 16 (2))

Capacity to Succeed

Lex nationalii of the deceased not of


the heir (Article 1039)

Revocation of Wills
1

If done in the RP

Lex loci actus (of the revocation)


(Article. 829)

If done OUTSIDE the RP

1.

By a NON-DOMICILIARY

Lex loci celebrationis (of the making of


the will, NOT revocation), OR lex
domicilii(Article 829)

1.

By a DOMICILIARY of the RP

Lex domicilii (RP law) OR lex loci


actus (of the revocation) (Article 17)

Probate of Wills Made Abroad

If not yet probated abroad

Lex fori of the RP applies as to the


procedural aspects, i.e., the will must be
fully probated here & due execution must
be shown

If already probated abroad

Lex fori of the RP again applies as to the


procedural aspects; must also be probated
here, but instead of proving due
execution, generally it is enough to ask
for the enforcement here of the foreign
judgment on the probate abroad

Executors and Administrators


1

Where appointed

Place where domiciled at death or incase


of non-domiciliary, where assets are
found

Powers

Co-extensive with the qualifying of the


appointing court powers may only be
exercised within the territorial
jurisdiction of the court concernedNOTE:
these rules also apply to principal,
domiciliary, or ancillary administrators &
receivers even in non-successive cases

Rules on Obligation and Contracts


FACTUAL SITUATION

Formal or Extrinsic Validity

POINT OF CONTACT

Lex loci celebrationis (Article 17 {1})

Exceptions
1.
1.

Alienation & encumbrance of


property

Lex situs (Article 16 [1])

Consular contracts

Law of the RP (if made in RP consulates)

Capacity of Contracting Parties

National law (Article 15) without


prejudice to the case of Insular
Government v Frank 13 P 236, where the
SC adhered to the theory of lex loci
celebrationis

Exception
Alienation & encumbrance of property
Intrinsic validity (including interpretation of
the instruments, and amt. of damages for

Lex situs (Article 16 {1})


Proper law of the contract lex
contractus(in the broad sense), meaning

breach)

the lex voluntatis or lex loci intentionis

Other Theories are:


1. Lex loci celebrationis (defect: this makes possible the evasion of the national law)
2. Lex nationalii (defect: this may impede commercial transactions)
3. Lex loci solutionis (law of the place of performance) (defect: there may be several
places of performance
4. Prof Minors solution:
5. Perfection lex loci celebrationis
6. Cause or consideration lex loci considerations
7. Performance lex loci solutionis (defect: this theory combines the defect of the
others)
Rules on Torts
FACTUAL SITUATION

Liability & damages for torts in


generalNOTE: The locus delicti (place of
commission of torts) is faced by the
problem of characterization. In civil law
countries, the locus delicti is generally
where the act began; in common law
countries, it is where the act first became
effective

POINT OF CONTACT

Lex loci delicti (law of the place where the


delict was committed)NOTE: liability for
foreign torts may be enforced in the RP if:
1. The tort is not penal in character
2. If the enforcement of the tortious
liability wont contravene our public
policy
3. If our judicial machinery is adequate
for such enforcement

Rules on Crimes
FACTUAL SITUATION

Essential elements of a crime and penalties

POINT OF CONTACT

Generally where committed (locus regit


actum)

Theories as to what court has jurisdiction:


1. Territoriality theory where the crime was committed
2. Nationality theory country which the criminal is citizen or a subject
3. Real theory any state whose penal code has been violated has jurisdiction, where
the crime was committed inside or outside its territory
4. Protective theory any state whose national interests may be jeopardized has
jurisdiction so that it may protect itself
5. Cosmopolitan or universality theory state where the criminal is found or which has
his custody has jurisdiction
6. Passive personality theory the state of which the victim is a citizen or subject has
jurisdiction
NOTE: In the RP, we follow the territoriality theory in general; exception: Article 2, RPC, stresses the

protective theory

The locus delicti of certain crimes


Frustrated an consummated, homicide,
murder, infanticide & parricide

Where the victim was injured (not where


the aggressor wielded his weapon)

Attempted homicide, etc.

Where the intended victim was (not where


the aggressor was situated) so long as
the weapon or the bullet either touched
him or fell inside the territory where he
was

Bigamy

Where the illegal marriage was performed

Theft & robbery

Where the property was unlawfully taken


from the victim (not the place to which
the criminal went after the commission of
the crime)

Estafa or swindling thru false


representation

Where the object of the crime was


received (not where the false
representations were made)

Conspiracy to commit treason, rebellion,


or seditionNOTE: Other conspiracies are
NOT penalized by our laws

Where the conspiracy was formed (not


where the overt act of treason, rebellion or
sedition was committed)

Libel

Where published or circulated

Continuing crime

Any place where the offense begins,


exists or continues

Complex crime

Any place where any of the essential


elements of the crime took place

Rules on Juridical Persons


FACTUAL SITUATION

Corporations

POINT OF CONTACT

Powers and liabilities

General rule: the law of the place of


incorporationEXCEPTIONS:
1. For constitutional purposes
even of the corporation was
incorporated in the RP, it is nor
deemed a Filipino corporation &
therefore cant acquire land,
exploit our natural resources, 7
operate public utilities unless 60%
of capital if Filipino owned
2. For wartime purposes we pierce
the corporation veil & go to the
nationality of the controlling
stockholders to determine if the
corporation is an enemy
(CONTROL TEST)

Formation of the corporation (requisites);


kind of stocks, transfer of stocks to bind
the corporation, issuance, amount &
legality & dividends, powers & duties of
members, stockholders and officers

Law of the place of incorporation

Validity of corporate acts & contracts


(including ultra vires acts)

Law of the place of incorporation & law


of the place of performance (the act or
contract must be authorized by BOTH
laws)

Right to sue & amenability to court


processes & suits against it

Lex fori

Manner & effect of dissolution

Law of the place of incorporation


provided that the public policy of the
forum is not militated against

Domicile

If not fixed by the law creating or


recognizing the corporation or by any
other provision the domicile is where it
is legal representation is established or
where it exercises its principal functions
(Article. 15)

Receivers (appointment & powers)

Principal receiver is appointed by the


courts of the state of incorporation;
ancillary receivers, by the courts of any

state where the corporation has assets


(authority is CO-EXTENSIVE) w/ the
authority of the appointing court
NOTE: Theories on the personal and/or governing law of corporations:
1. Law of the place of incorporation (this is generally the RP rule)
2. Law of the place or center of management (center for administration or siege social)
(center office principle)
3. Law of the place of exploitation (exploitation centre or siege d exploitation)
Partnerships
The existence or non-existence of legal
personality of the firm; the capacity to
contract; liability of the firm & the
partners to 3 persons

The personal law of the partnership, i.e.,


the law of the place where it was created
(Article 15 of the Code of Commerce)
(Subject to the exceptions given above as
in the case of corps.)

Creation of branches in the RP; validity


& effect of the branches commercial
transaction; & the jurisdiction of the
court

RP law (law of the place where branches


were created) (Article 15, Code of
Commerce)

Dissolution, winding up, & termination


of branches in the RP

RP law (Article 15, Code of Commerce)

Domicile

If not fixed by the law creating or


recognizing the partnership or by any
other provision the domicile is where it
is legal representation is established or
where it exercises its principal functions
(Article. 15)

Receivers

RP law insofar as the assets in the RP are


concerned can be exercised as such only
in the RP

rd

Foundations (combination of capital


independent of individuals, usually not for
profit)

Reference:
Civil Law (Conflict of Laws) Memory Aid
Ateneo Central Bar Operations 2001

Personal law of the foundation (place of


principal center of administration)