PROPERTY

In property-related matters, a conflict of law situation arises only when:

1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and
transfer immovables, the formalities of conveyance, the essential validity & effect of the transfer or the
interpretation and effect of a conveyance are to be determined; and

2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the
same matters.

Otherwise, the problem only has a domestic character

Lex Rei Sitae Rule

 a Latin phrase which means “the law where the property is situated”. The law governing the
transfer of title to property is dependent upon and varies with, the lex rei sitae.

 governs almost everything that concerns real property: formalities for their alienation, the
capacity to encumber or otherwise dispose of them, and so forth.
 In the Philippines, this rule applies to both real and personal property.

ARTICLE 16.

Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the
amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated
by the national law of the person whose succession is under consideration, whatever may be the nature
of the property and regardless of the country wherein said property may be found

ARTICLE 415. Immovable Property

The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to the soil;

(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an
immovable;

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by
the owner of the immovable in such a manner that it reveals the intention to attach them permanently to
the tenements;

(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an
industry or works which may be carried on in a building or on a piece of land, and which tend directly to
meet the needs of the said industry or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their
owner has placed them or preserves them with the intention to have them permanently attached to the
land, and forming a permanent part of it; the animals in these places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either
running or stagnant;

(9) Docks and structures which, though floating, are intended by their nature and object to remain at a
fixed place on a river, lake, or coast;

(10) Contracts for public works, and servitudes and other real rights over immovable property. (334a)

ARTICLE 416. Movable Property

The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not included in the preceding article;

(2) Real property which by any special provision of law is considered as personalty;

(3) Forces of nature which are brought under control by science; and

(4) In general, all things which can be transported from place to place without impairment of the real
property to which they are fixed. (335a)

ARTICLE 417.

The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable sums; and

(2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate.
(336a)

Exceptions to Lex Situs in the case of Real Property (Paras)

4 exceptions:

1) In the case of successional rights to a real property, what should control is the national law of the
deceased (Art 16, Paragraph 2, Civil Code).

2) Capacity to succeed is also governed by national law of deceased.

3) Contracts involving real property but which do not deal with the title to such real property shall not
necessarily be governed by lex rei sitae. The proper law of the contract, which is lex loci voluntantis or
intention should be regarded as controlling.

4) In contracts where real property is given by way of security, the principal contract (like a contract of
loan) is governed by the proper law of the contract; the accessory contract (like a contris governed by
the law of the country where the real property mortgaged is situated.
 a) If the principal contract is valid, the validity of the accessory contract is to be determined
by the lex rei sitae. If the mortgage is void by lex rei sitae, the principal contract can still remain
valid.

b) If upon the other hand, tested by lex loci volutantis, the principal contract of loan is void,
the mortgage contract would also be void ( for the accessory loses standing if principal is
valid) even if considered independently by itself the mortgaged would have been
considered valid by the lex rei sitae.

(Salonga)

4 notable exceptions.

1) Lex situs rule does not apply when it is the rights and liabilities of the parties to a
contract where the subject matter of the contract is an immovable that is at issue, and not
the effect of the transaction upon the title to the land . Instead, it is the law that regulates the
contract itself that will govern, though the land itself is in another state.

In Lijedahl v. Glasgow

The plaintiff held a mortgage on a piece of land located in Colorado as a security for an obligation
payable in Iowa. The mortgagor made a deed out to the land, leaving the space for the grantee’s
name blank. The deed contained a clause stating that it was made subject to the mortgage, which the
grantee agreed to pay. This deed was delivered for consideration to A, who in turn transferred it, for
consideration, to B, who then filled his name as grantee in the blank space.

Since the debt was not paid, the holder of the mortgage sought to hold A for the claim. According to
Colorado law, the blank deed to the grantee passed no interest to the purchaser until his name was
written therein, which A never did. On the other hand, Iowa law held that interest was passed to A.

The question was whether the contract’s validity was governed by Colorado or Iowa law. The court
ruled that the assumption of the encumbrance and the obligation to pay it were personal covenants,
and as they were made and performable in Iowa, the contract must be governed by Iowa law.

*Roberts v. Locke, 2013 See page 252 of Benito

2) Although the lex situs rule determines what law governs the validity and effect of a
mortgage upon immovable property, the validity and effect obligation which that mortgage
secures are governed by principles applicable to contracts generally . Problems arise when there
is a deficiency after the foreclosure on the mortgage has been made, as the cases regarding this matter
have not been uniform. If the bond and the mortgage are governed by the same law, and suit has been
brought in another state for the deficiency, the existence and extent of the right to recover are governed
by the law of the situs and contract, and recovery would not be limited by provisions of the law of the
forum prohibiting deficiency judgments, or restricting recovery to the difference between the debt and
the true value of the land, rather than the amount realized on sale.

However, when the bond is executed in one state and the land mortgaged lies in another, and the
provisions of these states regarding deficiency judgments differ, it is not clear which law governs. The
case of Stumpf v. Hallahan sidesteps the problem by stating that the contract was governed by the law
intended by the parties, and they must have intended it to be governed by the law of the situs of the
land. If the law governing the contract limits the recovery to the amount realized out of the land, there
would seem to be no basis for the recovery of a deficiency anywhere, irrespective of the law of the situs,
unless, as is quite likely, the law of the place of contracting is interpreted as intended to protect only
holders of land situated within that state.

A more difficult problem arises where the law of the contract permits recovery of the deficiency, while the
law of the situs restricts or denies it. One view is that since in some states a mortgagee may recover the
entire amount of the bond, disregarding the requirement of the law of the situs that the security first
must be exhausted,513 it might seem that he should likewise be able to disregard a law of the situs
which completely confines his recovery to the security. But the better view would seem to be that if he
chooses to avail himself of the procedure of the situs to obtain a foreclosure decree, he should be held to
have submitted himself and the disposition of his entire claim to the jurisdiction of the courts of the situs,
in whose decree his entire right would thereby be merged.

3) The validity of a contract to transfer is determined by the proper law of the contract, in
contrast with the validity of a transfer of land which is determined by lex rei sitae.

In Polson v. Steward – There was an action to enforce a covenant made by the defendant to his wife
in North Carolina to surrender all his marital rights in a certain land situated in Massachusetts. The parties
were domiciled in North Carolina, and practically every significant act connected with the covenant was
done in North Carolina. The wife took steps which under North Carolina law gave her the right to contract
as a femme sole with her husband as well as with others, and afterwards release her dower in the
defendant’s hands. In consideration of this release, and to induce his wife to forbear suing for divorce, for
which she had just cause and for other adequate considerations, the defendant executed the covenant.
Defendant demurred and contended that North Carolina law could not authorize a contract between them
as to lands in Massachusetts.

Justice Holmes said in the decision that “It is true that the laws of other States cannot render valid
conveyances of property within our borders which our laws say are void, for the plain reason that we
have exclusive power over the res. But for the same reason inverted establishes that the lex rei sitae
cannot control personal covenants, not purporting to be conveyances, between persons outside the
jurisdiction, concerning a thing within it. Whatever the covenant is the laws of North Carolina could
subject the defendant’s property to seizure on execution, and his person to imprisonment, for a failure to
perform it.

Therefore, on principle, the law of North Carolina determines the validity of the contract. If valid by the
law of North Carolina there is no reason why to contract should not be enforced in Massachusetts.

4) Finally, the last exception, which has its origin in civil law codes that adopted Mancini’s principle even
with respect to problems of succession, is based upon two codal provisions. Article 16, paragraph 2 of the
Civil Code of the Philippines, states that whether succession is testate or intestate, whether the
property is moveable or immovable, and wherever the property may be located, it is the national law of
the person whose succession is in question, not the lex situs, that determines the order of
succession, the amount of rights, and the intrinsic validity of testamentary provisions. Under Article 1039
of the Civil Code, the capacity to succeed is also governed by the national law of the deceased.

Art. 1753 of the Civil Code

ARTICLE 1753. The law of the country to which the goods are to be transported shall govern the liability
of the common carrier for their loss, destruction or deterioration.

Land in the Philippines

Specific Rules as to Ownership of Real Property

Section 7, Art. XII, 1987 Constitution

Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

This section prohibits the transfer of private lands to individuals, corporations, or associations, who or
which are not qualified to hold lands of the public domain.

However, it allows transfer to qualified individuals through hereditary succession which must refer only to
intestate succession. Otherwise if testator would be allowed to transfer property to a person by will, the
same would allow a direct contravention of the Constitution disallowing aliens to own a property in the
Philippines. Thus, the provision aims to prevent Filipinos from transferring their landholdings to
foreigners.

Ramirez v. Ramirez, (1982)

Jose Ramirez died leaving a will where among other dispositions, he granted a usufruct over real
property in favor of an alien, Wanda. This was opposed on the ground that it violated the Constitution.

The issue is W/N the usufruct over the real property in favor of Wanda violates the Constitutional
prohibition against ownership of lands by alien.

The court ruled that no. It upheld its validity on the ground that the Constitution covers not only
succession by operation of law but also testamentary succession. Any alien would be able to
circumvent the prohibition by paying money to a Philippine landowner in exchange for devise of a
piece of land. In the present case, the usufruct in favor of Wanda although a real right, does not vest
title to the land in the usufructuary. It is the vesting of title in favor of aliens which is proscribed by the
Constitution.

Possible applicable scenarios

Coverage of Lex Rei Sitae:

- governs the following things connected with real property: extrinsic validity of alienations,
transfers, mortgages, capacity of parties, interpretation of documents, effects of ownership, co-
ownership, accession, usufruct, lease, easement, police power, eminent domain, taxation,
quieting of title, registration, and prescription.

Capacity to Transfer or Acquire Property

Section 8, Article XII, A987 Constitution

Notwithstanding the provisions of Sec 7 of this article, a natural born citizen of the Philippines who
has lost his citizenship may be a transferee of private lands subject to limitations provided by law.

This section allows former natural born citizens of the Philippines to be transferees of private
lands. Hence, these people may purchase or acquire private lands subject only to area
exceptions.

Section 5 of RA No. 8197 or the Foreign Investments Act, the area that a former natural born
citizen may acquire has been increased to a maximum area of five thousand square meters in
the case of urban land, or three hectares in the case of rural land to be use by him for business
or other purposes.

Land Ownership by Filipinos Overseas

Article XII Section 8 of the Philippine Constitution provides that a natural-born citizen of the
Philippines who has lost his/her Philippine citizenship may be a transferee of private lands subject
to limitations provided by law. The laws on land ownership by Filipinos overseas are contained in
Batas Pambansa Blg. 185 and Republic Act 8179, which amended the Foreign Investment Act of
1991. BP 185 stipulates guidelines on land ownership by former Filipinos for purposes of
establishing residence, while Section 10 of RA 8179 specifies entitlements and conditions for land
acquisition for investment purposes.

Transferee

The acquisition or transfer of private land refers to either voluntary or involuntary sale, devise or
donation. Involuntary sale includes sales on tax delinquency, foreclosures, and executions of
judgment.

Qualifications of Former Filipinos

Both laws define former Filipinos as citizens of the Philippines from birth without having to perform
any act to acquire or perfect their Philippine citizenship, who lost said Philippine citizenship, and
who have the legal capacity to enter into a contract under Philippine laws

In general, only Filipino citizens and corporations or partnerships with least 60% of the shares
are owned by Filipinos are entitled to own or acquire land in the Philippines. Foreigners or non-
Philippine nationals may, however, purchase condominiums, buildings, and enter into a long-
term land lease.

Ownership of land in the Philippines is highly-regulated and reserved for persons or entities
legally defined as Philippine nationals or Filipino citizens. For this purpose, a corporation with
60% Filipino ownership is treated as a Philippine national.

Foreigners or expats interested in acquiring land or real property through aggressive

ownership structures must consider the provisions of the Philippines’ Anti-Dummy Law to
determine how to proceed. A major restriction in the law is the restriction on the number of
foreign members on the Board of Directors of a landholding company (which is limited to 40%
foreign participation). Another concern is the possible forfeiture of the property if the
provisions of the law are breached.

Are there any exceptions to the restriction on foreign land acquisition? 

Yes, there are. The list of exceptions to the restriction are as follows: 

 Acquisition before the 1935 Constitution

 Acquisition through hereditary succession if the foreigner is a legal or natural heir
 Purchase of not more than 40% interest in a condominium project
 Purchase by a former natural-born Filipino citizen subject to the limitations prescribed
by law (natural-born Filipinos who acquired foreign citizenship is entitled to own up to
5,000 sq.m. of residential land, and 1 hectare of agricultural or farm land).
 Filipinos who are married to aliens and able to retain their Filipino citizenship (unless
by their act or omission they have renounced their Filipino citizenship)
Can a Corporation Own Land in the Philippines?
Foreign nationals, expats or corporations may completely own a condominium or townhouse in
the Philippines. To take ownership of a private land, residential house and lot, and commercial
building and lot, they may set up a domestic corporation in the Philippines. This means that
the corporation owning the land has less than or up to 40% foreign equity and is formed by 5-
15 natural persons of legal age as incorporators, the majority of which must be Philippine
residents.
Can a Foreigner Lease Real Estate Property in the Philippines?
Leasing land in the Philippines on a long-term basis is an option for foreigners, expats or
foreign corporations with more than 40% foreign equity. Under the Investors’ Lease Act of the
Philippines, they may enter into a lease agreement with Filipino landowners for an initial period
of up to 50 years renewable once for an additional 25 years.

Can a Foreigner Own Residential Houses or Buildings in the Philippines?

Foreign ownership of a residential house or building in the Philippines is legal as long as the
foreigner or expat does not own the land on which the house was built.Can a Foreigner Own
Condominiums or Townhouses in the Philippines?
The Condominium Act of the Philippines (RA 4726) expressly allows foreigners to acquire
condominium units and shares in condominium corporations up to 40% of the total and
outstanding capital stock of a Filipino-owned or controlled condominium corporation.
However, there are a very few single-detached homes or townhouses in the Philippines with
condominium titles. Most condominiums are high-rise buildings.
Can a Foreigner Married to a Filipino Citizen Hold a Land Title in the Philippines?
If holding a title as an individual, a typical situation would be that a foreigner married to a
Filipino citizen would hold title in the Filipino spouse’s name. The foreign spouse’s name
cannot be on the Title but can be on the contract to buy the property. In the event of the
death of the Filipino spouse, the foreign spouse is allowed a reasonable amount of time to
dispose of the property and collect the proceeds or the property will pass to any Filipino heirs
and/or relatives.

Llantino v. Co Liong Chong, 1990 See page 261 of Benito

De Castro v. Tan, 1984

Cheesman v. IAC, 1991 See page 260 of Benito

Interpretation and Effect of Conveyance: Lex situs

Intrinsic and Extrinsic Validity of Conveyances

General Rule: Lex Situs

General Rule: Lex Situs

Exceptions:

1) Art. 16, par. 2 of the Civil Code;

2) Subject matter of contract.is land, but issue pertains to contractual rights and liabilities of the parties;

3) Security is immovable property but issue is the validity and effect of the obligation which the property
secures;

4) Under a policy-centered approach, when. the’ situs of the movable at the time of the transfer was
insignificant or accidental;

5) When the issue involves consideration other than the validity and effect of the transfer — the court
may look into the law of another state which has a real interest in applying its law;

6) The validity of the contract to transfer an immovable;

7) Negotiable Instruments

a. Negotiability — law governing the rights in the instrument

b. Validity of the transfer, delivery, or negotiation — law of the situs of the instrument at the
time of transfer, delivery, or negotiation;

8) Corporate shares;

a. As against the corporation and third persons -— law of the place of incorporation.

b. As between the assignor and assignees -— law most closely connected to the transaction

c. Taxation on dividends received by corporate shares is governed by the law of the place
of incorporation

d. Sale of corporate shares between parties — proper law of the contract, /e., the lex foci
voluntatis or lex foci intentionis, which in many cases, is the place where the certificate is
delivered to the buyer

9) Franchises — subject to the law of the state that granted them; and

10) Intellectual Properties -

General Rule: — Patents, copyrights, trademarks, trade names, and service marks are
protected only by the state that granted/recognized them.

Exception: When a treaty otherwise.

Extrinsic Validity and Formalities of contract

Ramirez v. Vda de Ramirez, 1982

Mathews v. Taylor, 2009 See page 258 of Benito

Phil. Banking Corp. v. Lui She, 1967

Rules on Property

FACTUAL SITUATION POINT OF CONTACT

Real property Lex rei sitae (Article 16, CC)

National law of decedent (Article 16 par.

Successional rights 2, CC)

Capacity to succeed National law of decedent (Article. 1039)

The law intended will be the proper law

Contracts involving real property which of the contract (lex loci
do not deal with the title thereto voluntantis  or lex loci intentionis)

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

Exception Contracts where the real property is
s given as security
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)

EXCEPTION: same as those for real

property EXCEPT that in the example
Exceptions: same as those for real concerning mortgage, the same must be
property changed to pledge of personal property)

Means of Transportation

Law of the flag (or in some cases, place

Vessels of registry)

2 Law of the depot (storage place for

Other means supplies or resting place)
 Things in  ransit (these things have a
changing status because they move)

Law of the destination (Article. 1753,

Loss, destruction, deterioration CC)

Locus regit actum (where seized) –

Validity & effect of the seizure of the because said place is their
goods temporary situs

3 Lex loci volutantis or lex loci intentionis –

Disposition or alienage of the goods because here there is a contract

FACTUAL SITUATION POINT OF CONTACT

INTangIBLE PERSONAL PROPERTY (CHOSES IN

ACTION)

1 Recovery of debts or involuntary Where debtor may be effectively served

assignment of debts (garnishment) with summons (usually the domicile)

2 Lex loci voluntatis or lex loci

Voluntary assignment of debts 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

4 Lex situs of assets of the debtor (for these

Administration of debts assets can be held liable for the debts)

The right embodied in the instrument (for

example, in the case of a Swedish bill of
5 Negotiability or non-negotiability of an exchange, Swedish law determines its
instrument negotiability)

6 Validity of transfer, delivery or negotiation In general, situs of the instrument at the

of the instrument time of transfer, delivery or negotiation
 7 Effect on a corporation of the sale of
corporate shares Law of the place incorporation

Lex loci voluntatis or lex loci intentionis

(proper law of the contract) – for this is
8 Effect between the parties of the sale of really a contract; usually this is the place
corporate shares where the certificate is delivered)

9 Taxation on the dividends of corporate

shares Law of the place of incorporation

1
0 Taxation on the income from the sale of Law of the place where the sale was
corporate shares consummated

1
1
Franchises Law of the place that granted them

1
2 Goodwill of the business & taxation Law of the place where the business is
thereto carried on

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
1 names in the RP ONLY IF Filipinos are
3 Patents, copyrights, trademarks, trade granted reciprocal concessions in the state
names of the foreigners

***********

Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
(Sec 7, Art XII, 1987 Constitution)

Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the
Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to
limitations provided by law. (Sec 8, Article XII, 1987 Constitution)
Sec. 5. The Foreign Investments Act is further amended by inserting a new section designated as
Section 10 to read as follows:

"Sec. 10. Other Rights of Natural Born Citizen Pursuant to the Provisions of Article XII, Sec. 8 of the
Constitution. – Any natural born citizen who has the legal capacity to enter into a contract under
Philippine laws may be a transferee of a private land up to a maximum area of five thousand (5,000)
square meters in the case of urban land or three (3) hectares in the case of rural land to be used by him
for business or other purposes. In the case of married couples, one of them may avail of the privilege
herein granted: provided, that if both shall avail of the same, the total area acquired shall not exceed the
maximum herein fixed.

"In case the transferee already owns urban or rural land for business or other purposes, he shall still be
entitled to be a transferee of additional urban or rural land for business or other purposes which when
added to those already owned by him shall not exceed the maximum areas herein authorized.

"A transferee under this Act may acquire not more than two (2) lots which should be situated in different
municipalities or cities anywhere in the Philippines: provided, that the total land area thereof shall not
exceed five thousand (5,000) hectares in the case of rural land for use by him for business or other
purposes. A transferee who has already acquired urban land shall be disqualified from acquiring rural
land area and vice versa." (Sec 5, RA 8179 or Foreign Investments Act)

RA 9225.

Sarsosa v. Cuenco, 1982

Vasquez vs Giap

FACTS: The plaintiff, Socorro Vasquez, sold to the defendant Li Seng Giap, Chinese citizen, for the sum of
P14,500, a parcel of land together with a house of strong materials existing thereon. Defendant Li Seng
Giap sold and transferred unto defendant Li Seng Giap & Sons, Inc., a corporation duly organized and
existing under and by virtue of the laws of the Philippines, with principal office in the City of Manila,
Philippines, whose shareholdings then were owned by Chinese citizens, for the same sum of P14,500.

Later, defendant Li Seng Giap was duly naturalized as a Filipino citizen together with the other Chinese
shareholders of the said corporation. Li Seng Giap & Sons, Inc., is now a Filipino corporation, 96.67 per
cent of its stock being owned by Filipinos, and duly authorized by its articles of incorporation to own,
acquire or dispose of real properties.
Plaintiff filed an action for the rescission of the said sale on the ground that at the time of the sale the
vendee was an alien and under the Constitution incapable to own and hold title to lands.

ISSUE: Whether or not the sale to the alien is valid.

RULING: Yes. Only the State that is entitled by proceedings in the nature of office found to have a
forfeiture or escheat declared against the vendee who is incapable of holding title to the real estate sold
and conveyed to him. However, if the State does not commence such proceedings and in the meantime
the alien becomes naturalized citizen the State is deemed to have waived its right to escheat the real
property and the title of the alien thereto becomes lawful and valid as of the date of its conveyance or
transfer to him.
The Rule in the United States that in a sale of real estate to an alien disqualified to hold title thereto, the
vendor divests himself of the title to such real estate and is not permitted to sue for the annulment of his
contract, is also the rule under the Civil Code.

The ban on aliens from acquiring not only agricultural but also urban lands, as construed by this Court, is
to preserve the nation's lands for future generations of Filipinos, that aim or purpose would not be
thwarted but achieved by making lawful the acquisition of real estate by aliens who became Filipino
citizens by naturalization. The title to the parcel of land of the vendee, a naturalized Filipino citizen, being
valid that of the domestic corporation to which the parcel of land has been transferred, must also be
valid, 96.67 per cent of its capital stock being owned by Filipinos.

Holy See v. Rosario, Jr., 1994

FACTS: This petition arose from a controversy over a parcel of land consisting of 6,000 square meters
located in the Municipality of Paranaque. Said lot was contiguous with two other lots. These lots were
sold to Ramon Licup. In view of the refusal of the squatters to vacate the lots sold, a dispute arose as to
who of the parties has the responsibility of evicting and clearing the land of squatters. Complicating the
relations of the parties was the sale by petitioner of the lot of concern to Tropicana.

ISSUE: Whether the Holy See is immune from suit insofar as its business relations regarding selling a lot
to a private entity.

RULING: The Holy See is immune from suit for the act of selling the lot of concern is non-proprietary in
nature. The lot was acquired by petitioner as a donation from the Archdiocese of Manila. The donation
was made not for commercial purpose, but for the use of petitioner to construct thereon the official place
of residence of the Papal Nuncio. The decision to transfer the property and the subsequent disposal
thereof are likewise clothed with a governmental character. Petitioner did not sell the lot for profit or
gain. It merely wanted to dispose of the same because the squatters living thereon made it almost
impossible for petitioner to use it for the purpose of the donation.

6. Property situated in another country

Question: May Phil courts still be called to distinguish between real and personal property?

If the property is situated in another country, PH court should determine if it is real or personal.

Laurel v. Garcia, 1990

Facts: Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located
in Japan. It is one of the properties given by the Japanese Government as reparations for damage done
by the latter to the former during the war.

Petitioner argues that under Philippine Law, the subject property is property of public dominion. As such,
it is outside the commerce of men. Therefore, it cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the
property is located in Japan. They posit that the principle of lex situs applies.

Issues: WON Philippine Law applies to the case at bar.

Ruling: Yes.
We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A
conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an
immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the
essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be
determined; and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a
domestic law on the same matters. Hence, the need to determine which law should apply.

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title. There is no question that the property
belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of
property belonging to the State. And the validity of the procedures adopted to effect its sale. This is
governed by Philippine Law. The rule of lex situs does not apply.

5. Situs of Certain Properties

2 Classes of Movables

i. Choses in possession - tangible physical objects

ii. Choses in action - also called as intangible property (e.g. debts, patents, copyright, goodwill, trade
marks and trade names, and shares of stock.)

Trademark – is the name or symbols of goods made or manufactured ex. Guess

Trade name – the name or symbol of the store or business place ex. Rustan’s

Service mark – the name or symbol of services rendered ex. Federal Express

Copyright – the right of literary property as recognized and sanctioned by positive law.

Kinds of choses in action

i. Debts or simple rights of action arising from loans or ordinary commercial contracts
ii. Negotiable instruments
iii. Corporate stocks or shares

Intangible Personal Property

(Choses in Action)
Debts Voluntary transfer of i. Personal law of the
assignment of choses in parties
action ii. Law of the place of
execution of assignment
iii. Law of the place where
debt is recoverable
Involuntary transfer of Law of the state where
choses in action (e.g. debtor may be served
garnishment) summons
Debt for taxation purposes Domicile of the creditor
where the collectible credit
may be taxed

Negotiable instruments
Corporate stocks or shares
Tangible Personal Property
(Choses in Possession)
General rule: lex rei sitae
Exceptions: same as the rules on real property
Means of transportation
Things in transit
Administration of debts Where the assets of the
debtor are usually situated
Negotiability or non- Law governing the rights
negotiability of an instrument embodied in the instrument
Validity of transfer, delivery In general, situs of the
or negotiation of the instrument at the time of
instrument transfer, delivery o
Effect on a corporation of the Law of the place
sale of corporate shares incorporation
Effect between the parties of Lex loci voluntatis or lex loci
the sale of corporate shares 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 Law of the place of
corporate shares incorporation
Taxation on the income from Law of the place where the
the sale of corporate shares sale was consummated
Franchises Law of the place that granted
them
Goodwill of the business & Law of the place where the
taxation thereto business is carried on
Patents, copyrights, In the absence of a treaty,
trademarks, trade names they are protected only by
the State that granted them
NOTE: 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
Vessels Law of the flag
Other means Law of the depot
Loss, destruction, Law of the destination (Civil
deterioration Code, Art 1753)
Validity & effect of the Locus regit actum (where
seizure of the goods seized) – because said place
is their temporary situs
Disposition of goods The owner is permitted to
choose among several legal
systems:
iv. Law of the temporary
resting place
 v. Lex loci actus
vi. Law of the place of
destination
vii. Law of the last real situs
of goods

6. 2 kinds of movables, 2 kinds of choses in action

a. Movable property

ASIATIC PETROLEUM V. CO QUICO 69 Phil 433 (1940)

FACTS : Co Quico entered into a contract of agency with Asiatic by virtue of which the former became the
sales agent on commission of the latter. Respondent was in default in the sum of P2,213 and without
rendering account to Asiatic left for China. Asiatic filed a complaint and after summons by publication Co
Quico was decalred in default and thereafter Co’s deposit in the Bank was levied. Co’s counsel moved to
declare the proceedings as null and void on the ground that the court never acquired jurisdiction over the
person of the respondent because the action is one in personam against a non-resident who was
summoned by publication and did not appear.

ISSUE : Whether or not the court acquired jurisdiction over the person of the defendant.

HELD : Yes. Although respondent was outside the Philippines at the time the action was instituted, he
possessed property found and located here in the Philippines and such property was within the reach of
our courts. It is well emphasized in this connection that all property within the state is subject to the
jurisdiction of its courts and they have the right to adjudicate title thereto, to enforce liens therupon and
to subject it to the payment of the debts of its owners, whether resident or not.

b. Situs of money -

Leon v. Manulife, 1951:

c. Situs of Debts –

Harris vs Balk

Ratio: It ought to be and it is the object of courts to prevent the payment of any debt twice over.

FACTS: A citizen of North Carolina owed money to another citizen of that State. While temporarily in
Maryland, however, the debtor got garnished by a creditor of his creditor (garnishee). Judgment was duly
entered according to Maryland practice and paid. Thereafter the debtor was sued in North Carolina by the
creditor and as a defense, showed the judgment and payment made in Maryland. Nevertheless, North
Carolina courts held that as the situs of the debt was in North Carolina the Maryland judgment was not a
bar and awarded judgment against him. The United States Court of Appeals reversed. The Supreme
Court of North Carolina, on the other hand, reversed the decision, which refused to give full faith and
credit to a Maryland judgment. The case was elevated to the Supreme Court of the United States.

ISSUE: Should the Maryland judgment be recognized in North Carolina courts?

RULING: Yes. The Court held that the garnishee's debt owed to the creditor in Maryland followed the
garnishee everywhere. Since Maryland had a law that would allow the Maryland creditor to pursue the
debt owed by the garnishee to it, debtor could attach the debt owed by the garnishee to the creditor,
even though the garnishee was not a Maryland resident. The garnishee's failure to notify defendant of
attachment was not prejudicial because defendant had the opportunity to show that he did not owe a
debt to plaintiff. Moreover, the court also reminded that it is the object of courts to prevent the payment
of any debt twice over.

d. Intangible properties

Lim v. CA, 1995

Facts: Manuel Lim and Rosita Lim are the officers of the Rigi Bilt Industries, Inc. (RIGI). RIGI had been
transacting business with Linton Commercial Company, Inc. The Lims ordered 100 pieces of mild steel
plates from Linton and were delivered to the Lim’s place of business which was in Caloocan. To pay
Linton, the Lims issued a postdated check for P51,800.00. On a different date, the Lims also ordered
another 65 pcs of mild steel plates and were delivered in the place of business. They again issued
another postdated check. On that same day, they also ordered purlins worth P241,800 which were
delivered to them on various dates. The Lims issued 7 checks for this.

When the 7 checks were presented to the drawee bank (Solidbank), it was dishonored because payment
for the checks had been stopped and/or insufficiency of funds. So the Lims were charged with 7 counts
of violation of Bouncing Checks Law.

The Malabon trial court held that the Lims were guilty of estafa and violation of BP 22. They went to CA
on appeal.

The CA acquitted the Lims of estafa, on the ground that the checks were not made in payment of an
obligation contracted at the time of their issuance. However, the CA affirmed the finding that they were
guilty of violation for BP 22. Motion for Reconsideration to SC.

Issue: Whether or not the issue was within the jurisdiction of the Malabon Trial Court

Held: Yes. The venue of jurisdiction lies either in the RTC Caloocan or Malabon Trial Court.

BP 22 is a continuing crime. A person charged with a transitory crime may be validly tried in any
municipality or territory where the offense was partly committed. In determining the proper venue, the ff.
must be considered. 1) 7 checks were issued to Linton in its place of business in Navotas. 2) The checks
were delivered Linton in the same place. 3) The checks were dishonored in Caloocan 4) The Lims had
knowledge of their insufficiency of funds.

Under sec 191 of the Negotiable Instruments Law:

ISSUE = 1ST delivery of the instrument complete in form to a person who takes it as a holder

HOLDER = payee or indorsee of a bill/note who is in possession of it or the bearer

The place where the bills were written, signed or dated does not necessarily fix or determine the place
where they were executed. It is the delivery that is important. It is the final act essential to its
consummation of an obligation. An undelivered bill is unoperative. The issuance and delivery of the check
must be to a person who takes it as a holder.

Although Linton sent a collector who received the checks fr. The Lims at their place of business, the
checks were actually issued and delivered to Linton in Navotas. The collector is not a holder or an agent,
he was just an employee.
e. Situs of Shares of Stock

CIR V. ANGLO CALIFORNIA NATIONAL BANK 106 Phil 903

FACTS : Respondent Calamba Sugar Estate Inc. (CSEI), represented by its trustee, the Anglo Cal. Nat’l
Bank is a foreign corporation organized under the laws of California, duly licensed to do business in the
Phils. Petitoner notified CSEI of an assessment for an alleged deficiency income taxes. Based on the
allegation that the sale of its shares of stocks was perfected and payment took place in USA and that the
sale was made in accordance with the laws of USA, the CTA absolved CSEI from liability on the ground
that the capital gains which constituted income were derived from abroad and not subject to income tax.
Petitioner appealed contending that the situs of shares of stock of corporation is considered to be at the
domicile of the latter.

ISSUE : WON the situs of the corporate shares of stock is within the Philippines

HELD : No. Shares of stock of corporation are considered as intangible personal properties. Sec. 24 of
NIRC levies income taxes on foreign corporations only on income derived from sources within the
Philippines and with respect to capital gains on the sale of personal properties. Sec 37 (e) of NIRC deems
the place of the sale as also that place or source of capital gain. Moreover, income derived from sale
abroad is not taxable here in the Phils. Only income within the Philippines are taxable.

TAYAG v. BENGUET CONSOLIDATED INC. 26 SCRA 242

FACTS : Perkins died leaving two stock certificates in the Benguet Consolidated Inc., a Phil. Corporation.
The certificates were in possession of Country Trust Co. of New York, which was the domiciliary
adminstrator of the estate of the deceased. Meanwhile, anciliary administration proceedings in the CFI of
Manial were instituted and the court appointed Lazaro Marquez as anciliary administrator, wo was
substituted by Renato Tayag. A dispute arose between the domiciliary and anciliary administratoes as to
which of them was entitled to the possession of the stock certificates. The CFI ordered the domiciliary
administrator to produce and deposit the certificates with Tayag or with the Cerk of Court, but the former
did not comply with the said order. Tayag petitioned the Court to issued an order declaring the stocks
certificates as lost, which the court granted. Hence, this appeal by the oppositor Benguet Consolidated
Inc.

ISSUE : Whether or not ancillary administrator is entitled to the possession of the stock certificates

HELD : Yes. The ancillary administration is proper, whenever a person dies, leaving in a country other
than that of is last domicile, property to be administered in the nature of assets of the deceased liable for
his individual debts or to be distributed among his heirs. It would follow then that the authority of the
probate court to require that anciliary administrato’s right to the stock certificates…standing in her name
in the books of appellant-Benguet Consolidated Inc., be respected is equally beyond question. For
appellant is a Phil. Corporation owing full allegiance and subject to the unrestricted jurisdiction of the
local courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful court
orders.
SUCCESSION

Article 774. Succession is 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. 

Article 778. Succession may be:

(1) Testamentary;

(2) Legal or intestate; or

(3) Mixed

Article 779. Testamentary succession is that which results from the designation of an heir, made in a
will executed in the form prescribed by law.

Article 804. Every will must be in writing and executed in a language or dialect known to the testator.
(n)

Article 805. Every will, other than a holographic will, must be subscribed at the end thereof by the
testator himself or by the testator's name written by some other person in his presence, and by his
express direction, and attested and subscribed by three or more credible witnesses in the presence of the
testator and of one another.

The testator or the person requested by him to write his name and the instrumental witnesses of the will,
shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the
pages shall be numbered correlatively in letters placed on the upper part of each page.

The attestation shall state the number of pages used upon which the will is written, and the fact that the
testator signed the will and every page thereof, or caused some other person to write his name, under
his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and
signed the will and all the pages thereof in the presence of the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. (n)

Article 806. Every will must be acknowledged before a notary public by the testator and the witnesses.
The notary public shall not be required to retain a copy of the will, or file another with the office of the
Clerk of Court.(n)

Article 807. If the testator be deaf, or a deaf-mute, he must personally read the will, if able to do so;
otherwise, he shall designate two persons to read it and communicate to him, in some practicable
manner, the contents thereof. 

Article 810. A person may execute a holographic will which must be entirely written, dated, and signed
by the hand of the testator himself. It is subject to no other form, and may be made in or out of the
Philippines, and need not be witnessed.
 EXTRINSIC AND INTRINSIC VALIDITY OF WILLS IN GENERAL

Extrinsic validity of a will deals with the forms and solemnities (including the age and capacity of testator
the to make the will; the number of witnesses; the form of the will — oral, private instrument, public
instrument; and so forth). Upon the other hand intrinsic validity concerns itself with the order of
succession, the amount of successional rights, and the intrinsic validity of the provisions of the will.

Both kinds of validity are important: once a will is void extrinsically, itis clear that no effect can be given
to it; a will that has complied with all formalities can also be rendered useless if all the provisions it
contains are contrary to the law.

The following are our conflicts rules on the extrinsic validity of wills:

(1) If the will is made by an alien abroad, he must comply with the formalities of the:
a. lex nationalii
b. lex domicilii
c. Philippine law (Art. 816, Civil’ Code)
d. lex loci celebrationis i (Art. 17, par. I, Civil Code)

Example: If a Japanese domiciled in Argentina makes a will in Mexico’ while: vacationing

there, the will may be considered extrinsically valid by our courts if it has complied . with the
formalities prescribed in Japan, Argentina, Mexico or the Philippines.

If a Filipino makes a will abroad, he may comply with the formalities of the lex nationalii
(Philippine law or the lex loci celebrationis (the law-of the place where he maybe — and
where obviously he makes ‘the will). (Art. 816, Civil Code).

If an alien makes a will in the Philippines he is allowed to comply with the formalities of his
own country (lex nationalii) or the law of the Philippines (Art. 817, Civil Code).

EXTRINSIC VALIDITY OF JOINT WILLS

  Joint wills are those executed in the game instrument-by two or more testators. They are
considered by our Civil Code as null and avoid.
 Mutual or reciprocal wills, upon the other hand, are those Which contain reciprocal disposition in
favor of the testator. Mutual wills are valid.

Article 818. Two or more persons cannot make a will jointly, or in the same instrument, either for their
reciprocal benefit or for the benefit of a third person.

1. If the joint wills were made by Filipinos abroad, the me shall be considered void in the
Philippines, even if they are valid in the Place where they were executed.

Article 819. Wills, prohibited by the preceding article, executed by Filipinos in a foreign country
shall not be valid in the Philippines, even though authorized by the laws of the country where
they may have been executed.

2. Joint wills made by aliens abroad shall be considered as valid in the Philippines if valid according
to the lex nationalii or lex domicilii or lex celebrationis. (Arts. 816 and 17, Civil Code). Be it noted
that the prohibition referred to in Art. 819 applies only to Filipinos.

3. Joint wills made by aliens in' the Philippines, even if lid in accordance with their national law, will
not be countenanced the Philippines “because otherwise our public policy may be militated
against:

CASE: Dacanay vs. Florendo

EXECUTION OF JOINT WlLL OR EXPRESSION BY TWO OR MORE TESTATORS OF THEIR

WILLS IN A DOCUMENT BY ONE ACT.—The prohibition of article 669 of the Civil Code is directed
against the execution of a joint will, or the expression by two or more testators of their wills in a single
document and by one act, rather than against mutual or reciprocal wills, which may be separately
executed.

PROVISION OF ARTICLE 669, CIVIL CODE, Is STILL IN FORCE.—Considering the wisdom of the
provision of this article 669 and the fact that it has not been repealed, at least not expressly, as well as
the consideration that its provisions are not incompatible with those of the Code of Civil Procedure on the
subject of wills, it is believed that said article of the Civil Code is still in force.

INTRINSIC VALIDITY
The intrinsic validity of wills including the order of succession, amount of successional rights, and the
intrinsic validity of the provisions of the will shall be governed by the lex nationalii of the deceased
regardless of the LOCATION and NATURE of the property, whether real or personal.

Article 16. Real property as well as personal property is subject to the law of the country where it
is stipulated.

However, intestate and testamentary successions, both with respect to the order of succession
and to the amount of successional rights and to the intrinsic validity of testamentary provisions,
shall be regulated by the national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country wherein said property
may be found.

CASES

Bellis v. Bellis, 1967 – benito p.40

Bohanan v. Bohanan – benito p.316

Miciano v. Brimo – benito p.315

Cayetano v. Leonidas, 1984

FACTS: The testatrix was an American citizen at the time of her death and was a permanent resident of
Pennsylvania, U.S.A.; that the testatrix died in Manila while temporarily residing with her sister; that
during her lifetime, the testatrix made her last will and testament according to the laws of Pennsylvania,
U.S.A.; that after the testatrix death, her last will and testament was presented, probated, allowed, and
registered with the Registry of Wills at the County of Philadelphia, U.S.A. An opposition to the reprobate
of the will was filed by herein petitioner alleging among other things that the intrinsic provisions of the
will are null and void. The petitioner maintains that since the respondent judge allowed the reprobate of
Adoracion’s will, Hermogenes C. Campos was divested of his legitime which was reserved by the law for
him.

ISSUES

1. Whether or not the Philippine law will apply to determine the intrinsic validity of a will executed
by an undisputed foreigner.

2. Whether or not Philippine law will apply to determine the capacity to succeed of Adoracion’s
heirs.

RULING

[1] NO. It is a settled rule that as regards the intrinsic validity of the provisions of the will, as provided for
by Article 16(2) and 1039 of the Civil Code, the national law of the decedent must apply. This was
squarely applied in the case of Bellis v. Bellis (20 SCRA 358).“It is therefore evident that whatever public
policy or good customs may be involved in our system of legitimes, Congress has not intended to extend
the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the
amount of successional rights, to the decedent’s national law. Specific provisions must prevail over
general ones.”

[2] NO. Capacity to succeed is governed by the law of the nation of the decedent. (Article 1039, Civil
Code) The law which governs Adoracion Campo’s will is the law of Pennsylvania, U.S.A., which is the
national law of the decedent. Although the parties admit that the Pennsylvania law does not provide for
legitimes and that all the estate may be given away by the testatrix to a complete stranger, the petitioner
argues that such law should not apply because it would be contrary to the sound and established public
policy and would run counter to the specific provisions of Philippine Law.

Two Theories in determining the Proper Law for the Transmission of Successional Rights:

1. Unitary or Single System

one law determines transmission of real and personal properties, e.g., in countries following lex
nationalii like the Philippines, deceased’s national law governs (CIVIL CODE, Art. 16); in common
law countries or those that follow lex domicilii, the law of deceased's domicile governs
2. Split or Scission System Succession to real property — lex situs
Succession to personal property — law of the domicile of deceased at the time of death.
(Adopted by Great Britain and United States)

Capacity to Succeed

Article 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Revocation

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

PROBATE

Probate is the act of proving before a competent court the due execution of a will possessed of
testamentary capacity, as well as approval thereof by the said court.

Necessity for Probate:

A probate is essential because under the law “Art. 838 No will shall pass either real or personal property
unless it is proved and allowed in accordance with the Rules of Court.”

Period of Prescription:

There is no period of prescription for the probate of a will. The Statute of Limitations fixes time limits for
the filing of “civil actions” but not for “special proceedings” of which probate is admittedly one.

Rules estoppel do not apply to probate proceedings for they are vested with public interest, and if
estoppel would be applied, the ascertainment of the truth may be blocked.

Probate of Wills Executed Abroad

a. If a will executed abroad has NOT yet been probated in a foreign country, the ordinary
Philippine probate procedure is required; that is, the lex fori of the Philippines applies as to the
procedural aspects. It must be shown to the court that the foreign will has been validly executed
in accordance with the formalities already discussed (concerning extrinsic validity)

NOTE: It has been held in this connection that an alleged foreign probate cannot be deemed one unless
it is shown that the foreign court was a duly authorized probate tribunal, and that the entire probate
procedure there had been complied with.

a. If a foreign will has already been probated in a foreign country, it still has to be probated here
in the Philippines because a foreign judgment, no matter how intrinsically meritorious, generally
cannot have automatic extraterritorial effect. The will has still to be probated here, BUT the due
execution need not be proved again it is ordinarily sufficient to ask for the ENFORCEMENT. Lex
fori applies to the procedural aspects.

Rule 76, Sec. 9

Section 9. Grounds for disallowing will. — The will shall be disallowed in any of the following cases:

(a) If not executed and attested as required by law;

(b) If the testator was insane, or otherwise mentally incapable to make a will, at the time
of its execution;

(c) If it was executed under duress, or the influence of fear, or threats;

 (d) If it was procured by undue and improper pressure and influence, on the part of the
beneficiary, or of some other person for his benefit;

(e) If the signature of the testator was procured by fraud or trick, and he did not intend
that the instrument should be his will at the time of fixing his signature thereto.

Rule 77, Sec. 1

Section 1. Will proved outside Philippines may be allowed here . — Wills proved and allowed in a foreign
country, according to the laws of such country, may be allowed, filed, and recorded by the proper Court
of First Instance in the Philippines.

Cases

Dalton v. Giberson – benito p.313

Tayag v. Benguet Consolidated, Inc. – benito p.348

Suntay vs. Suntay

FACTS: In 1934, Jose B. Suntay, a Filipino citizen and a resident of the Philippines, died in Amoy, China.
He left real and personal properties in the Philippines and a house in Amoy. During his lifetime, he
married twice, the first wife was Manuela Cruz, with whom he had several children. The second marriage
was with Maria Natividad Lim Brillian, with whom he had a son, petitioner Silvino Suntay.

Intestate proceedings were instituted by the heirs from the first marriage. While the second wife, the
surviving widow who remained in Amoy China, filed a petition for the probate of the last will and
testament of the deceased which was claimed to have been executed and signed in the Philippines on
November, 1929. The petition was denied due to the loss of the will before the hearing thereof. After the
pacific war, Silvino, claimed to have found among the records of his father, a last will and testament in
Chinese characters executed and signed by the deceased on January, 1931 and probated in the
Amoy District Court. He filed a petition in the intestate proceedings for the probate of the will executed in
the Philippines on November 1929 or the will executed in Amoy China on November, 1931.

ISSUE: Whether or not the will executed in Amoy, China can still be validly probated in the
Philippines

RULING: The fact that the municipal district court of Amoy, China is a probate court must be proved.
The law of China on procedure in the probate or allowance of wills must also be proved. The
legal requirements for the execution of the will in China in 1931 should also be established by competent
evidence. There is no proof on these points.

Moreover, it appears that all the proceedings had in the municipal district court of Amoy were for the
purpose of taking the testimony of two attesting witnesses to the will and that the order of
the municipal district court of Amoy does not purport to probate the will.

The order of the municipal district court of Amoy, China does not purport to probate or allow the will
which was the subject of the proceedings. In view thereof, the will and the alleged probate thereof
cannot be said to have been done in accordance with the accepted basic and fundamental concepts and
principles followed in the probate and allowance of wills. Consequently, the authenticated transcript of
proceedings held in the municipal district court of Amoy, China, cannot be deemed and accepted as
proceedings leading to the probate of allowance of a will and therefore, the will referred to therein
cannot be allowed, filed and recorded by a competent court of this country.

Vda. De Perez v. Tolete, 1994, Evidence needed for reprobate

FACTS: Dr. Jose F. Cunanan and his wife, Dr. Evelyn Perez-Cunanan, who became American citizens,
established a successful medical practice in New York, USA.

On August 23, 1979, Dr. Jose executed a last will and testament, bequeathing to his wife “all the
remainder” of his real and personal property at the time of his death “wheresoever situated.” In the
event he would survive his wife, he bequeathed all his property to his children and grandchildren with Dr.
Rafael G. Cunanan, Jr. as trustee. He appointed his wife as executrix of his last will and testament and
Dr. Rafael Jr. as substitute executor.

In his will, Dr. Jose provided that should he and his wife die under such circumstances that there is not
sufficient evidence to determine the order of their deaths, the presumption is that he died first.

Four days later, Dr. Evelyn executed her own last will and testament, containing the same provisions as
that of her husband. Likewise, she provided that should she and her husband died under such
circumstances that there is not sufficient evidence to determine the order of their deaths, it should be
presumed that he died first.

On January 9, 1982, Dr. Jose and his entire family perished when they were trapped by fire that gutted
their home. Thereafter, Dr. Rafael Jr. as trustee and substitute executor of the two wills, filed separate
proceedings for the probate thereof in the Surrogate Court of the County of Onondaga, New York. The
wills were admitted to probate and letters testamentary were issued in his favor.

On February 21, 1983, Salud Teodoro Perez, the mother of Dr. Evelyn, filed with the RTC of Malolos,
Bulacan a petition for the reprobate of the two wills ancillary to the probate proceedings in New York.
She also asked that she be appointed as special administratrix of the estate of the deceased couple
consisting primarily of a farm land in San Miguel, Bulacan. She was granted letters of special
administration and posted bond in the amount of PHP 10,000.00. As special administratrix, Salud
consolidated the assets of the Cunanan spouses, including the bank deposits of Dr. Jose.

The brothers and sisters of Dr. Jose opposed and asked to be notified of the proceedings as heirs of Dr.
Jose F. Cunanan. But their status as heirs were disputed by Salud, who said that they were only
collaterals and not heirs as “heirship is only by institution” under a will or by operation of the law of New
York. Since the will of Dr. Jose provided a presumption that he predeceased his wife, his estate passed
on to his wife, Dr. Evelyn. Salud, being the sole heir of Dr. Evelyn, thus inherited the estate of the
Cunanan spouses.

The Cunanan heirs soon asked that the RTC proceedings be nullified and that the appointment of Salud
as special administratrix be set aside. They also asked that Dr. Rafael Sr., brother of Dr. Jose, be
appointed the regular administrator of the estate of the deceased spouses. They alleged that the
Cunanan heirs and Salud had entered into an agreement in the United States “to settle and divide equally
the estates.”

RTC issued an order, disallowing the reprobate of the two wills, recalling the appointment of petitioner as
special administratrix, requiring the submission of petitioner of an inventory of the property received by
her as special administratrix and declaring all pending incidents moot and academic.  The RTC Judge
reasoned out that petitioner failed to prove the law of New York on procedure and allowance of wills and
the court had no way of telling whether the wills were executed in accordance with the law of New York.
In the absence of such evidence, the presumption is that the law of succession of the foreign country is
the same as the law of the Philippines.

Salud’s motion for reconsideration was granted. In another order, the RTC Judge held that the
documents presented did not establish the law of New York on the procedure and allowance of wills but
granted a motion to submit additional evidence to prove the law of New York. However, the RTC Judge
ruled that the probate of two wills in a single proceeding is not procedural.

Hence, this petition.

ISSUES:

1. Whether or not the reprobate of the two wills in a single proceeding is procedural

2. Whether or not the two wills probated outside the philippines may be reprobated in the
philippines

RULING:

Requirements for allowance of foreign wills for probate in the Philippines

The respective wills of the Cunanan spouses, who were American citizens, will only be effective in this
country upon compliance with the following provisions of the Civil Code of the Philippines:

“Art. 816. The will of an alien who is abroad produces effect in the Philippines if made with the formalities
prescribed by law of the place in which he resides, or according to the formalities observed in his country,
or in conformity with those which this Code prescribes.”

Thus, proof that both wills conform with the formalities prescribed by New York laws or by Philippine laws
is imperative.

The evidence necessary for the reprobate or allowance of wills which have been probated outside of the
Philippines are as follows: (1) the due execution of the will in accordance with the foreign laws; (2) the
testator has his domicile in the foreign country and not in the Philippines; (3) the will has been admitted
to probate in such country; (4) the fact that the foreign tribunal is a probate court, and (5) the laws of a
foreign country on procedure and allowance of wills. Except for the first and law requirements, the
petitioner submitted all the needed evidence.

The necessity of presenting evidence on the foreign laws upon which the probate in the foreign country is
based is impelled by the fact that our courts cannot take judicial notice of them.

While the probate of a will is a special proceeding wherein courts should relax the rules on evidence, the
goal is to receive the best evidence of which the matter is susceptible before a purported will is probated
or denied probate.

The separate wills of the Cunanan spouses should be probated jointly

There is merit in petitioner’s insistence that the separate wills of the Cunanan spouses should be
probated jointly. Respondent Judge’s view that the Rules on allowance of wills is couched in singular
terms and therefore should be interpreted to mean that there should be separate probate proceedings for
the wills of the Cunanan spouses is too literal and simplistic an approach. Such view overlooks the
provisions of Section 2, Rule 1 of the Revised Rules of Court, which advise that the rules shall be
“liberally construed in order to promote their object and to assist the parties in obtaining just, speedy,
and inexpensive determination of every action and proceeding.”

A literal application of the Rules should be avoided if they would only result in the delay in the
administration of justice.

What the law expressly prohibits is the making of joint wills either for the testator’s reciprocal benefit or
for the benefit of a third person. In the case at bench, the Cunanan spouses executed separate wills.
Since the two will contains essentially the same provisions and pertain to property which in all probability
are conjugal in nature, practical considerations dictate their joint probate. As this Court has held a
number of times, it will always strive to settle the entire controversy in a single proceeding leaving no
root or branch to bear the seeds of future litigation.

On the requirement of notice

Petitioner has always considered herself the sole heir of Dr. Evelyn Perez Cunanan and because she does
not consider herself an heir of Dr. Jose F. Cunanan, she noticeably failed to notify his heirs of the filing of
the proceedings.

The rule that the court having jurisdiction over the reprobate of a will shall “cause notice thereof to be
given as in case of an original will presented for allowance” means that with regards to notices, the will
probated abroad should be treated as if it were an “original will” or a will that is presented for probate for
the first time. Accordingly, compliance with Sections 3 and 4 of Rule 76, which require publication and
notice by mail or personally to the “known heirs, legatees, and devisees of the testator resident in the
Philippines” and to the executor, if he is not the petitioner, are required.

The brothers and sisters of Dr. Jose F. Cunanan, contrary to petitioner’s claim are entitled to notices of
the time and place for proving the wills. Under Section 4 of Rule 76 of the Revised Rules of Court, the
“court shall also cause copies of the notice of the time and place fixed for proving the will to be
addressed to the designated or other known heirs, legatees, and devisees of the testator.