G.R. No. L-16749 January 31, 1963
00), Philippine Currency per
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E.
CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the
deceased, Executor and Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
LABRADOR, J.:
This is an appeal from a decision of the Court of First Instance of Davao,
Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said
court, dated September 14, 1949, approving among things the final
accounts of the executor, directing the executor to reimburse Maria Lucy
Christensen the amount of P3,600 paid by her to Helen Christensen Garcia
as her legacy, and declaring Maria Lucy Christensen entitled to the residue
of the property to be enjoyed during her lifetime, and in case of death
without issue, one-half of said residue to be payable to Mrs. Carrie Louise C.
Borton, etc., in accordance with the provisions of the will of the testator
Edward E. Christensen. The will was executed in Manila on March 5, 1951
and contains the following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the
Philippines about twenty-eight years ago, and who is now residing
at No. 665 Rodger Young Village, Los Angeles, California, U.S.A.
4. I further declare that I now have no living ascendants, and no
descendants except my above named daughter, MARIA LUCY
CHRISTENSEN DANEY.
xxx xxx xxx
7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN,
now married to Eduardo Garcia, about eighteen years of age and
who, notwithstanding the fact that she was baptized Christensen,
is not in any way related to me, nor has she been at any time
adopted by me, and who, from all information I have now resides
in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND
SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same to
be deposited in trust for the said Maria Helen Christensen with the
Davao Branch of the Philippine National Bank, and paid to her at
the rate of One Hundred Pesos (P100.
month until the principal thereof as well as any interest which may
have accrued thereon, is exhausted..
xxx xxx xxx
12. I hereby give, devise and bequeath, unto my well-beloved
daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs.
Bernard Daney), now residing as aforesaid at No. 665 Rodger
Young Village, Los Angeles, California, U.S.A., all the income from
the rest, remainder, and residue of my property and estate, real,
personal and/or mixed, of whatsoever kind or character, and
wheresoever situated, of which I may be possessed at my death
and which may have come to me from any source whatsoever,
during her lifetime: ....
It is in accordance with the above-quoted provisions that the executor in his
final account and project of partition ratified the payment of only P3,600 to
Helen Christensen Garcia and proposed that the residue of the estate be
transferred to his daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed by Helen
Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an
acknowledged natural child, she having been declared by Us in G.R. Nos. L-
11483-84 an acknowledged natural child of the deceased Edward E.
Christensen. The legal grounds of opposition are (a) that the distribution
should be governed by the laws of the Philippines, and (b) that said order of
distribution is contrary thereto insofar as it denies to Helen Christensen,
one of two acknowledged natural children, one-half of the estate in full
ownership. In amplification of the above grounds it was alleged that the law
that should govern the estate of the deceased Christensen should not be
the internal law of California alone, but the entire law thereof because
several foreign elements are involved, that the forum is the Philippines and
even if the case were decided in California, Section 946 of the California
Civil Code, which requires that the domicile of the decedent should apply,
should be applicable. It was also alleged that Maria Helen Christensen
having been declared an acknowledged natural child of the decedent, she
is deemed for all purposes legitimate from the time of her birth.
The court below ruled that as Edward E. Christensen was a citizen of the
United States and of the State of California at the time of his death, the
successional rights and intrinsic validity of the provisions in his will are to
be governed by the law of California, in accordance with which a testator
has the right to dispose of his property in the way he desires, because the
right of absolute dominion over his property is sacred and inviolable (In re
McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman,
117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor
1
Maria Helen Christensen, through counsel, filed various motions for
reconsideration, but these were denied. Hence, this appeal.
The most important assignments of error are as follows:
I U.S.A. He stayed in the Philippines until 1904.
THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE
HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED
NATURAL CHILD OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN
DEPRIVING HER OF HER JUST SHARE IN THE INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO
RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND
CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER
INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE
INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E.
CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF
DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE
PHILIPPINE LAWS.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE
PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF
(1/2) OF THE ESTATE IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of the United
States and of the State of California at the time of his death. But there is
also no question that at the time of his death he was domiciled in the
Philippines, as witness the following facts admitted by the executor himself
in appellee's brief:
In the proceedings for admission of the will to probate, the facts of
record show that the deceased Edward E. Christensen was born on
November 29, 1875 in New York City, N.Y., U.S.A.; his first arrival
in the Philippines, as an appointed school teacher, was on July 1,
1901, on board the U.S. Army Transport "Sheridan" with Port of
Embarkation as the City of San Francisco, in the State of California,
In December, 1904, Mr. Christensen returned to the United States
and stayed there for the following nine years until 1913, during
which time he resided in, and was teaching school in Sacramento,
California.
Mr. Christensen's next arrival in the Philippines was in July of the
year 1913. However, in 1928, he again departed the Philippines
for the United States and came back here the following year,
1929. Some nine years later, in 1938, he again returned to his own
country, and came back to the Philippines the following year,
1939.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence to
prove their case not covered by this stipulation of
facts. 1äwphï1.ñët
Being an American citizen, Mr. Christensen was interned by the
Japanese Military Forces in the Philippines during World War II.
Upon liberation, in April 1945, he left for the United States but
returned to the Philippines in December, 1945. Appellees
Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA",
"BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p.
473, t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to
California shortly after the making of his last will and testament
(now in question herein) which he executed at his lawyers' offices
in Manila on March 5, 1951. He died at the St. Luke's Hospital in
the City of Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased is the
Philippines, we are persuaded by the fact that he was born in New York,
migrated to California and resided there for nine years, and since he came
to the Philippines in 1913 he returned to California very rarely and only for
short visits (perhaps to relatives), and considering that he appears never to
have owned or acquired a home or properties in that state, which would
2
indicate that he would ultimately abandon the Philippines and make home
in the State of California.
Sec. 16. Residence is a term used with many shades of meaning
from mere temporary presence to the most permanent abode.
Generally, however, it is used to denote something more than
mere physical presence. (Goodrich on Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he acquired
in California when he resided in Sacramento, California from 1904 to 1913,
was never lost by his stay in the Philippines, for the latter was a territory of
the United States (not a state) until 1946 and the deceased appears to
have considered himself as a citizen of California by the fact that when he
executed his will in 1951 he declared that he was a citizen of that State; so
that he appears never to have intended to abandon his California
citizenship by acquiring another. This conclusion is in accordance with the
following principle expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to
mean the same thing, a place of permanent abode. But domicile,
as has been shown, has acquired a technical meaning. Thus one
may be domiciled in a place where he has never been. And he
may reside in a place where he has no domicile. The man with two
homes, between which he divides his time, certainly resides in
each one, while living in it. But if he went on business which would
require his presence for several weeks or months, he might
properly be said to have sufficient connection with the place to be
called a resident. It is clear, however, that, if he treated his
settlement as continuing only for the particular business in hand,
not giving up his former "home," he could not be a domiciled New
Yorker. Acquisition of a domicile of choice requires the exercise of
intention as well as physical presence. "Residence simply requires
bodily presence of an inhabitant in a given place, while domicile
requires bodily presence in that place and also an intention to
make it one's domicile." Residence, however, is a term used with
many shades of meaning, from the merest temporary presence to
the most permanent abode, and it is not safe to insist that any one
use et the only proper one. (Goodrich, p. 29)
The law that governs the validity of his testamentary dispositions is defined
in Article 16 of the Civil Code of the Philippines, which is as follows:
ART. 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 where said
property may be found.
The application of this article in the case at bar requires the determination
of the meaning of the term "national law" is used therein.
There is no single American law governing the validity of testamentary
provisions in the United States, each state of the Union having its own
private law applicable to its citizens only and in force only within the state.
The "national law" indicated in Article 16 of the Civil Code above quoted
can not, therefore, possibly mean or apply to any general American law. So
it can refer to no other than the private law of the State of California.
The next question is: What is the law in California governing the disposition
of personal property? The decision of the court below, sustains the
contention of the executor-appellee that under the California Probate Code,
a testator may dispose of his property by will in the form and manner he
desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P.
2d 952. But appellant invokes the provisions of Article 946 of the Civil Code
of California, which is as follows:
If there is no law to the contrary, in the place where personal
property is situated, it is deemed to follow the person of its owner,
and is governed by the law of his domicile.
The existence of this provision is alleged in appellant's opposition and is not
denied. We have checked it in the California Civil Code and it is there.
Appellee, on the other hand, relies on the case cited in the decision and
testified to by a witness. (Only the case of Kaufman is correctly cited.) It is
argued on executor's behalf that as the deceased Christensen was a citizen
of the State of California, the internal law thereof, which is that given in the
abovecited case, should govern the determination of the validity of the
testamentary provisions of Christensen's will, such law being in force in the
State of California of which Christensen was a citizen. Appellant, on the
other hand, insists that Article 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the question of the
validity of the testamentary provision in question should be referred back
to the law of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various authors, thus:
The problem has been stated in this way: "When the Conflict of
Laws rule of the forum refers a jural matter to a foreign law for
3
decision, is the reference to the purely internal rules of law of the
foreign system; i.e., to the totality of the foreign law minus its
Conflict of Laws rules?"
On logic, the solution is not an easy one. The Michigan court chose
to accept the renvoi, that is, applied the Conflict of Laws rule of
Illinois which referred the matter back to Michigan law. But once
having determined the the Conflict of Laws principle is the rule
looked to, it is difficult to see why the reference back should not
have been to Michigan Conflict of Laws. This would have resulted
in the "endless chain of references" which has so often been
criticized be legal writers. The opponents of the renvoi would have
looked merely to the internal law of Illinois, thus rejecting the
renvoi or the reference back. Yet there seems no compelling
logical reason why the original reference should be the internal
law rather than to the Conflict of Laws rule. It is true that such a
solution avoids going on a merry-go-round, but those who have
accepted the renvoi theory avoid this inextricabilis circulas by
getting off at the second reference and at that point applying
internal law. Perhaps the opponents of the renvoi are a bit more
consistent for they look always to internal law as the rule of
reference.
Strangely enough, both the advocates for and the objectors to
the renvoi plead that greater uniformity will result from adoption
of their respective views. And still more strange is the fact that the
only way to achieve uniformity in this choice-of-law problem is if in
the dispute the two states whose laws form the legal basis of the
litigation disagree as to whether the renvoi should be accepted. If
both reject, or both accept the doctrine, the result of the litigation
will vary with the choice of the forum. In the case stated above,
had the Michigan court rejected therenvoi, judgment would have
been against the woman; if the suit had been brought in the
Illinois courts, and they too rejected the renvoi, judgment would be
for the woman. The same result would happen, though the courts
would switch with respect to which would hold liability, if both
courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances:
where the title to land is in question, and where the validity of a
decree of divorce is challenged. In these cases the Conflict of Laws
rule of the situs of the land, or the domicile of the parties in the
divorce case, is applied by the forum, but any further reference
goes only to the internal law. Thus, a person's title to land,
recognized by the situs, will be recognized by every court; and
every divorce, valid by the domicile of the parties, will be valid
everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in France,
leaving movable property in Massachusetts, England, and France.
The question arises as to how this property is to be distributed
among X's next of kin.
Assume (1) that this question arises in a Massachusetts court.
There the rule of the conflict of laws as to intestate succession to
movables calls for an application of the law of the deceased's last
domicile. Since by hypothesis X's last domicile was France, the
natural thing for the Massachusetts court to do would be to turn to
French statute of distributions, or whatever corresponds thereto in
French law, and decree a distribution accordingly. An examination
of French law, however, would show that if a French court were
called upon to determine how this property should be distributed,
it would refer the distribution to the national law of the deceased,
thus applying the Massachusetts statute of distributions. So on the
surface of things the Massachusetts court has open to it
alternative course of action: (a) either to apply the French law is to
intestate succession, or (b) to resolve itself into a French court and
apply the Massachusetts statute of distributions, on the
assumption that this is what a French court would do. If it accepts
the so-called renvoi doctrine, it will follow the latter course, thus
applying its own law.
This is one type of renvoi. A jural matter is presented which the
conflict-of-laws rule of the forum refers to a foreign law, the
conflict-of-laws rule of which, in turn, refers the matter back again
to the law of the forum. This is renvoi in the narrower sense. The
German term for this judicial process is 'Ruckverweisung.'"
(Harvard Law Review, Vol. 31, pp. 523-571.)
After a decision has been arrived at that a foreign law is to be
resorted to as governing a particular case, the further question
may arise: Are the rules as to the conflict of laws contained in such
foreign law also to be resorted to? This is a question which, while it
has been considered by the courts in but a few instances, has
been the subject of frequent discussion by textwriters and
essayists; and the doctrine involved has been descriptively
designated by them as the "Renvoyer" to send back, or the
"Ruchversweisung", or the "Weiterverweisung", since an
affirmative answer to the question postulated and the operation of
the adoption of the foreign law in toto would in many cases result
in returning the main controversy to be decided according to the
law of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been
advanced. The theory of the doctrine of renvoi is that the court of
the forum, in determining the question before it, must take into
4
 account the whole law of the other jurisdiction, but also its rules as
to conflict of laws, and then apply the law to the actual question
which the rules of the other jurisdiction prescribe. This may be the
law of the forum. The doctrine of the renvoi has generally been
repudiated by the American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined and the reasons for
its application in a country explained by Prof. Lorenzen in an article in the
Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of
the article are quoted herein below:
The recognition of the renvoi theory implies that the rules of the
conflict of laws are to be understood as incorporating not only the
ordinary or internal law of the foreign state or country, but its rules
of the conflict of laws as well. According to this theory 'the law of a
country' means the whole of its law.
xxx xxx xxx
Von Bar presented his views at the meeting of the Institute of
International Law, at Neuchatel, in 1900, in the form of the
following theses:
(1) Every court shall observe the law of its country as regards the
application of foreign laws.
(2) Provided that no express provision to the contrary exists, the
court shall respect:
(a) The provisions of a foreign law which disclaims the
right to bind its nationals abroad as regards their
personal statute, and desires that said personal statute
shall be determined by the law of the domicile, or even
by the law of the place where the act in question
occurred.
(b) The decision of two or more foreign systems of law,
provided it be certain that one of them is necessarily
competent, which agree in attributing the determination
of a question to the same system of law.
xxx xxx xxx
If, for example, the English law directs its judge to distribute the
personal estate of an Englishman who has died domiciled in
Belgium in accordance with the law of his domicile, he must first
inquire whether the law of Belgium would distribute personal
property upon death in accordance with the law of domicile, and if
he finds that the Belgian law would make the distribution in
accordance with the law of nationality — that is the English law —
he must accept this reference back to his own law.
We note that Article 946 of the California Civil Code is its conflict of laws
rule, while the rule applied in In re Kaufman,Supra, its internal law. If the
law on succession and the conflict of laws rules of California are to be
enforced jointly, each in its own intended and appropriate sphere, the
principle cited In re Kaufman should apply to citizens living in the State, but
Article 946 should apply to such of its citizens as are not domiciled in
California but in other jurisdictions. The rule laid down of resorting to the
law of the domicile in the determination of matters with foreign element
involved is in accord with the general principle of American law that the
domiciliary law should govern in most matters or rights which follow the
person of the owner.
When a man dies leaving personal property in one or more states,
and leaves a will directing the manner of distribution of the
property, the law of the state where he was domiciled at the time
of his death will be looked to in deciding legal questions about the
will, almost as completely as the law of situs is consulted in
questions about the devise of land. It is logical that, since the
domiciliary rules control devolution of the personal estate in case
of intestate succession, the same rules should determine the
validity of an attempted testamentary dispostion of the property.
Here, also, it is not that the domiciliary has effect beyond the
borders of the domiciliary state. The rules of the domicile are
recognized as controlling by the Conflict of Laws rules at the situs
property, and the reason for the recognition as in the case of
intestate succession, is the general convenience of the doctrine.
The New York court has said on the point: 'The general principle
that a dispostiton of a personal property, valid at the domicile of
the owner, is valid anywhere, is one of the universal application. It
had its origin in that international comity which was one of the first
fruits of civilization, and it this age, when business intercourse and
the process of accumulating property take but little notice of
boundary lines, the practical wisdom and justice of the rule is
more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164,
pp. 442-443.)
Appellees argue that what Article 16 of the Civil Code of the Philippines
pointed out as the national law is the internal law of California. But as
above explained the laws of California have prescribed two sets of laws for
its citizens, one for residents therein and another for those domiciled in
other jurisdictions. Reason demands that We should enforce the California
5
internal law prescribed for its citizens residing therein, and enforce the WHEREFORE, the decision appealed from is hereby reversed and the case
conflict of laws rules for the citizens domiciled abroad. If we must enforce returned to the lower court with instructions that the partition be made as
the law of California as in comity we are bound to go, as so declared in the Philippine law on succession provides. Judgment reversed, with costs
Article 16 of our Civil Code, then we must enforce the law of California in against appellees.
accordance with the express mandate thereof and as above explained, i.e.,
apply the internal law for residents therein, and its conflict-of-laws rule for
Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon,
those domiciled abroad.
Regala and Makalintal, JJ., concur.
Bengzon, C.J., took no part.
It is argued on appellees' behalf that the clause "if there is no law to the
contrary in the place where the property is situated" in Sec. 946 of the
G.R. No. L-22595 November 1, 1927
California Civil Code refers to Article 16 of the Civil Code of the Philippines
and that the law to the contrary in the Philippines is the provision in said
Article 16 that the national law of the deceased should govern. This Testate Estate of Joseph G. Brimo, JUAN MICIANO,
contention can not be sustained. As explained in the various authorities administrator, petitioner-appellee,
cited above the national law mentioned in Article 16 of our Civil Code is the vs.
law on conflict of laws in the California Civil Code, i.e., Article 946, which ANDRE BRIMO, opponent-appellant.
authorizes the reference or return of the question to the law of the
testator's domicile. The conflict of laws rule in California, Article 946, Civil
Ross, Lawrence and Selph for appellant.
Code, precisely refers back the case, when a decedent is not domiciled in
Camus and Delgado for appellee.
California, to the law of his domicile, the Philippines in the case at bar. The
court of the domicile can not and should not refer the case back to
California; such action would leave the issue incapable of determination
because the case will then be like a football, tossed back and forth between
the two states, between the country of which the decedent was a citizen
ROMUALDEZ, J.:
and the country of his domicile. The Philippine court must apply its own law
as directed in the conflict of laws rule of the state of the decedent, if the
question has to be decided, especially as the application of the internal law The partition of the estate left by the deceased Joseph G. Brimo is in
of California provides no legitime for children while the Philippine law, Arts. question in this case.
887(4) and 894, Civil Code of the Philippines, makes natural children legally
acknowledged forced heirs of the parent recognizing them.
The judicial administrator of this estate filed a scheme of partition.
Andre Brimo, one of the brothers of the deceased, opposed it. The court,
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. however, approved it.
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
The errors which the oppositor-appellant assigns are:
cited by appellees to support the decision can not possibly apply in the
case at bar, for two important reasons, i.e., the subject in each case does
not appear to be a citizen of a state in the United States but with domicile (1) The approval of said scheme of partition; (2) denial of his
in the Philippines, and it does not appear in each case that there exists in participation in the inheritance; (3) the denial of the motion for
the state of which the subject is a citizen, a law similar to or identical with reconsideration of the order approving the partition; (4) the approval of the
Art. 946 of the California Civil Code. purchase made by the Pietro Lana of the deceased's business and the deed
of transfer of said business; and (5) the declaration that the Turkish laws
are impertinent to this cause, and the failure not to postpone the approval
We therefore find that as the domicile of the deceased Christensen, a
of the scheme of partition and the delivery of the deceased's business to
citizen of California, is the Philippines, the validity of the provisions of his
Pietro Lanza until the receipt of the depositions requested in reference to
will depriving his acknowledged natural child, the appellant, should be
the Turkish laws.
governed by the Philippine Law, the domicile, pursuant to Art. 946 of the
Civil Code of California, not by the internal law of California..
The appellant's opposition is based on the fact that the partition in
question puts into effect the provisions of Joseph G. Brimo's will which are

6
not in accordance with the laws of his Turkish nationality, for which reason
they are void as being in violation or article 10 of the Civil Code which,
among other things, provides the following:
Nevertheless, legal and testamentary successions, in
respect to the order of succession as well as to the amount of the
successional rights and the intrinsic validity of their provisions,
shall be regulated by the national law of the person whose
succession is in question, whatever may be the nature of the
property or the country in which it may be situated.
conquest and not by free choice, nor by nationality and, on the
other hand, having resided for a considerable length of time in the
Philippine Islands where I succeeded in acquiring all of the
property that I now possess, it is my wish that the distribution of
my property and everything in connection with this, my will, be
made and disposed of in accordance with the laws in force in the
Philippine islands, requesting all of my relatives to respect this
wish, otherwise, I annul and cancel beforehand whatever
disposition found in this will favorable to the person or persons
who fail to comply with this request.

The institution of legatees in this will is conditional, and the condition

But the fact is that the oppositor did not prove that said testimentary
is that the instituted legatees must respect the testator's will to distribute
dispositions are not in accordance with the Turkish laws, inasmuch as he
his property, not in accordance with the laws of his nationality, but in
did not present any evidence showing what the Turkish laws are on the
accordance with the laws of the Philippines.
matter, and in the absence of evidence on such laws, they are presumed to
be the same as those of the Philippines. (Lim and Limvs. Collector of
Customs, 36 Phil., 472.) If this condition as it is expressed were legal and valid, any legatee
who fails to comply with it, as the herein oppositor who, by his attitude in
these proceedings has not respected the will of the testator, as expressed,
It has not been proved in these proceedings what the Turkish laws
is prevented from receiving his legacy.
are. He, himself, acknowledges it when he desires to be given an
opportunity to present evidence on this point; so much so that he assigns
as an error of the court in not having deferred the approval of the scheme The fact is, however, that the said condition is void, being contrary to
of partition until the receipt of certain testimony requested regarding the law, for article 792 of the civil Code provides the following:
Turkish laws on the matter.
Impossible conditions and those contrary to law or good
The refusal to give the oppositor another opportunity to prove such morals shall be considered as not imposed and shall not prejudice
laws does not constitute an error. It is discretionary with the trial court, the heir or legatee in any manner whatsoever, even should the
and, taking into consideration that the oppositor was granted ample testator otherwise provide.
opportunity to introduce competent evidence, we find no abuse of
discretion on the part of the court in this particular. There is, therefore, no
And said condition is contrary to law because it expressly ignores the
evidence in the record that the national law of the testator Joseph G. Brimo
testator's national law when, according to article 10 of the civil Code above
was violated in the testamentary dispositions in question which, not being
quoted, such national law of the testator is the one to govern his
contrary to our laws in force, must be complied with and
testamentary dispositions.
executed. lawphil.net

Said condition then, in the light of the legal provisions above cited, is
Therefore, the approval of the scheme of partition in this respect was
considered unwritten, and the institution of legatees in said will is
not erroneous.
unconditional and consequently valid and effective even as to the herein
oppositor.
In regard to the first assignment of error which deals with the
exclusion of the herein appellant as a legatee, inasmuch as he is one of the
It results from all this that the second clause of the will regarding the
persons designated as such in will, it must be taken into consideration that
law which shall govern it, and to the condition imposed upon the legatees,
such exclusion is based on the last part of the second clause of the will,
is null and void, being contrary to law.
which says:

All of the remaining clauses of said will with all their dispositions and
Second. I like desire to state that although by law, I am a
requests are perfectly valid and effective it not appearing that said clauses
Turkish citizen, this citizenship having been conferred upon me by
are contrary to the testator's national law.
7
 Therefore, the orders appealed from are modified and it is directed
that the distribution of this estate be made in such a manner as to include
the herein appellant Andre Brimo as one of the legatees, and the scheme of
partition submitted by the judicial administrator is approved in all other
respects, without any pronouncement as to costs.
So ordered.
Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.
Bellis vs Bellis
5112010
20 scra 358
Nationality Principle
Amos Bellis was a citizen of the State of Texas, and of the United States. By
his first wife whom he divorced he had five legitimate children, by his
second wife, who survived him, he had three legitimate children, and three
illegitimate children. Before he died, he made two wills, one disposing of his
Texas properties and the other disposing his Philippine properties. In both
wills, his illegitimate children were not given anything. The illegitimate
children opposed the will on the ground that they have been deprived of
their legitimes to which they should be entitled, if Philippine law were to be
applied.
ISSUE: Whether or not the national law of the deceased should determine
the successional rights of the illegitimate children.
HELD: The Supreme Court held that the said children are not entitled to
their legitimes under the Texas Law, being the national law of the
deceased, there are no legitimes.
G.R. No. L-23678 June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-
appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order of
the Court of First Instance of Manila dated April 30, 1964, approving the
project of partition filed by the executor in Civil Case No. 37089
therein.1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of
the United States." By his first wife, Mary E. Mallen, whom he divorced, he
had five legitimate children: Edward A. Bellis, George Bellis (who pre-
deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman; by his second wife, Violet Kennedy, who survived him, he had
three legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy
Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in
which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and
(c) after the foregoing two items have been satisfied, the remainder shall
go to his seven surviving children by his first and second wives, namely:
Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman,
Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal
shares.1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San
Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First
Instance of Manila on September 15, 1958.
8
The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares
of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a
total of P120,000.00, which it released from time to time according as the
lower court approved and allowed the various motions or petitions filed by
the latter three requesting partial advances on account of their respective
legacies.
On January 8, 1964, preparatory to closing its administration, the executor
submitted and filed its "Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia, the satisfaction of
the legacy of Mary E. Mallen by the delivery to her of shares of stock
amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or
a total of P120,000.00. In the project of partition, the executor — pursuant
to the "Twelfth" clause of the testator's Last Will and Testament — divided
the residuary estate into seven equal portions for the benefit of the
testator's seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed
their respective oppositions to the project of partition on the ground that
they were deprived of their legitimes as illegitimate children and, therefore,
compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
service of which is evidenced by the registry receipt submitted on April 27,
1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling the
oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is
Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the
lower court on June 11, 1964, oppositors-appellants appealed to this Court
to raise the issue of which law must apply — Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the
doctrine of renvoi, applied by this Court inAznar v. Christensen Garcia, L-
16749, January 31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile of another. In the
present case, it is not disputed that the decedent was both a national of
Texas and a domicile thereof at the time of his death.2 So that even
assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a
reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei
sitae) calling for the application of the law of the place where the properties
are situated, renvoi would arise, since the properties here involved are
found in the Philippines. In the absence, however, of proof as to the conflict
of law rule of Texas, it should not be presumed different from
ours.3 Appellants' position is therefore not rested on the doctrine of renvoi.
As stated, they never invoked nor even mentioned it in their arguments.
Rather, they argue that their case falls under the circumstances mentioned
in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will; and
(d) the capacity to succeed. They provide that —
ART. 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 he the
nature of the property and regardless of the country wherein said
property may be found.
ART. 1039. Capacity to succeed is governed by the law of the
nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil
Code, stating that —
Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congressdeleted the phrase, "notwithstanding
the provisions of this and the next preceding article" when they
incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code,
9
while reproducing without substantial change the second paragraph of Art.
10 of the old Civil Code as Art. 16 in the new. It must have been their
purpose to make the second paragraph of Art. 16 a specific provision in
itself which must be applied in testate and intestate succession. As further
indication of this legislative intent, Congress added a new provision, under
Art. 1039, which decrees that capacity to succeed is to be governed by the
national law of the decedent.
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.
Appellants would also point out that the decedent executed two wills — one
to govern his Texas estate and the other his Philippine estate — arguing
from this that he intended Philippine law to govern his Philippine estate.
Assuming that such was the decedent's intention in executing a separate
Philippine will, it would not alter the law, for as this Court ruled in Miciano
v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the effect that
his properties shall be distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national law cannot be
ignored in regard to those matters that Article 10 — now Article 16 — of the
Civil Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no
forced heirs or legitimes. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be
applied to the testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez
and Castro, JJ., concur.
G.R. No. L-35694 December 23, 1933
ALLISON G. GIBBS, petitioner-appelle,
vs.
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, oppositor-appellant.
THE REGISTER OF DEEDS OF THE CITY OF MANILA, respondent-
appellant.
Office of the Solicitor-General Hilado for appellants.
Allison D. Gibbs in his own behalf.
BUTTE, J.:
This is an appeal from a final order of the Court of First Instance of Manila,
requiring the register of deeds of the City of Manila to cancel certificates of
title Nos. 20880, 28336 and 28331, covering lands located in the City of
Manila, Philippine Islands, and issue in lieu thereof new certificates of
transfer of title in favor of Allison D. Gibbs without requiring him to present
any document showing that the succession tax due under Article XI of
Chapter 40 of the Administrative Code has been paid.
The said order of the court of March 10, 1931, recites that the parcels of
land covered by said certificates of title formerly belonged to the conjugal
partnership of Allison D. Gibbs and Eva Johnson Gibbs; that the latter died
intestate in Palo Alto, California, on November 28, 1929; that at the time of
her death she and her husband were citizens of the State of California and
domiciled therein.
It appears further from said order that Allison D. Gibbs was appointed
administrator of the state of his said deceased wife in case No. 36795 in
the same court, entitled "In the Matter of the Intestate Estate of Eva
Johnson Gibbs, Deceased"; that in said intestate proceedings, the said
Allison D. Gibbs, on September 22,1930, filed an ex partepetition in which
he alleged "that the parcels of land hereunder described belong to the
conjugal partnership of your petitioner and his wife, Eva Johnson Gibbs",
describing in detail the three facts here involved; and further alleging that
his said wife, a citizen and resident of California, died on November
28,1929; that in accordance with the law of California, the community
property of spouses who are citizens of California, upon the death of the
wife previous to that of the husband, belongs absolutely to the surviving
husband without administration; that the conjugal partnership of Allison D.
Gibbs and Eva Johnson Gibbs, deceased, has no obligations or debts and no
one will be prejudiced by adjucating said parcels of land (and seventeen
others not here involved) to be the absolute property of the said Allison D.
Gibbs as sole owner. The court granted said petition and on September 22,
1930, entered a decree adjucating the said Allison D. Gibbs to be the sole
and absolute owner of said lands, applying section 1401 of the Civil Code of
California. Gibbs presented this decree to the register of deeds of Manila
and demanded that the latter issue to him a "transfer certificate of title".
10
Section 1547 of Article XI of Chapter 40 of the Administrative Code provides
in part that:
Registers of deeds shall not register in the registry of property any
document transferring real property or real rights therein or any
chattel mortgage, by way of gifts mortis causa, legacy or
inheritance, unless the payment of the tax fixed in this article and
actually due thereon shall be shown. And they shall immediately
notify the Collector of Internal Revenue or the corresponding
provincial treasurer of the non payment of the tax discovered by
them. . . .
Acting upon the authority of said section, the register of deeds of the City
of Manila, declined to accept as binding said decree of court of September
22,1930, and refused to register the transfer of title of the said conjugal
property to Allison D. Gibbs, on the ground that the corresponding
inheritance tax had not been paid. Thereupon, under date of December 26,
1930, Allison D. Gibbs filed in the said court a petition for an order requiring
the said register of deeds "to issue the corresponding titles" to the
petitioner without requiring previous payment of any inheritance tax. After
due hearing of the parties, the court reaffirmed said order of September 22,
1930, and entered the order of March 10, 1931, which is under review on
this appeal.
On January 3, 1933, this court remanded the case to the court of origin for
new trial upon additional evidence in regard to the pertinent law of
California in force at the time of the death of Mrs. Gibbs, also authorizing
the introduction of evidence with reference to the dates of the acquisition
of the property involved in this suit and with reference to the California law
in force at the time of such acquisition. The case is now before us with the
supplementary evidence.
For the purposes of this case, we shall consider the following facts as
established by the evidence or the admissions of the parties: Allison D.
Gibbs has been continuously, since the year 1902, a citizen of the State of
California and domiciled therein; that he and Eva Johnson Gibbs were
married at Columbus, Ohio, in July 1906; that there was no antenuptial
marriage contract between the parties; that during the existence of said
marriage the spouses acquired the following lands, among others, in the
Philippine Islands, as conjugal property:lawphil.net
1. A parcel of land in the City of Manila represented by transfer certificate
of title No. 20880, dated March 16, 1920, and registered in the name of
"Allison D. Gibbs casado con Eva Johnson Gibbs".
2. A parcel of land in the City of Manila, represented by transfer certificate
of title No. 28336, dated May 14, 1927, in which it is certified "that spouses
Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee simple" of the
land therein described.
3. A parcel of land in the City of Manila, represented by transfer certificate
of title No. 28331, dated April 6, 1927, which it states "that Allison D. Gibbs
married to Eva Johnson Gibbs" is the owner of the land described therein;
that said Eva Johnson Gibbs died intestate on November 28, 1929, living
surviving her her husband, the appellee, and two sons, Allison J. Gibbs ,
now age 25 and Finley J. Gibbs, now aged 22, as her sole heirs of law.
Article XI of Chapter 40 of the Administrative Code entitled "Tax on
inheritances, legacies and other acquisitions mortis causa" provides in
section 1536 that "Every transmission by virtue of inheritance ... of real
property ... shall be subject to the following tax." It results that the question
for determination in this case is as follows: Was Eva Johnson Gibbs at the
time of her death the owner of a descendible interest in the Philippine lands
above-mentioned?
The appellee contends that the law of California should determine the
nature and extent of the title, if any, that vested in Eva Johnson Gibbs
under the three certificates of title Nos. 20880, 28336 and 28331 above
referred to, citing article 9 of the Civil Code. But that, even if the nature
and extent of her title under said certificates be governed by the law of the
Philippine Islands, the laws of California govern the succession to such title,
citing the second paragraph of article 10 of the Civil Code.
Article 9 of the Civil Code is as follows:
The laws relating to family rights and duties, or to the status,
condition, and legal capacity of persons, are binding upon
Spaniards even though they reside in a foreign country." It is
argued that the conjugal right of the California wife in community
real estate in the Philippine Islands is a personal right and must,
therefore, be settled by the law governing her personal status,
that is, the law of California. But our attention has not been called
to any law of California that incapacitates a married woman from
acquiring or holding land in a foreign jurisdiction in accordance
with the lex rei sitae. There is not the slightest doubt that a
California married woman can acquire title to land in a common
law jurisdiction like the State of Illinois or the District of Columbia,
subject to the common-law estate by the courtesy which would
vest in her husband. Nor is there any doubt that if a California
husband acquired land in such a jurisdiction his wife would be
vested with the common law right of dower, the prerequisite
conditions obtaining. Article 9 of the Civil Code treats of purely
personal relations and status and capacity for juristic acts, the
rules relating to property, both personal and real, being governed
11
 by article 10 of the Civil Code. Furthermore, article 9, by its very
terms, is applicable only to "Spaniards" (now, by construction, to
citizens of the Philippine Islands).
The Organic Act of the Philippine Islands (Act of Congress, August
29, 1916, known as the "Jones Law") as regards the determination
of private rights, grants practical autonomy to the Government of
the Philippine Islands. This Government, therefore, may apply the
principles and rules of private international law (conflicts of laws)
on the same footing as an organized territory or state of the
United States. We should, therefore, resort to the law of California,
the nationality and domicile of Mrs. Gibbs, to ascertain the norm
which would be applied here as law were there any question as to
her status.
But the appellant's chief argument and the sole basis of the lower court's
decision rests upon the second paragraph of article 10 of the Civil Code
which is as follows:
Nevertheless, legal and testamentary successions, in respect to
the order of succession as well as to the amount of the
successional rights and the intrinsic validity of their provisions,
shall be regulated by the national law of the person whose
succession is in question, whatever may be the nature of the
property or the country in which it may be situated.
In construing the above language we are met at the outset with some
difficulty by the expression "the national law of the person whose
succession is in question", by reason of the rather anomalous political
status of the Philippine Islands. (Cf. Manresa, vol. 1, Codigo Civil, pp. 103,
104.) We encountered no difficulty in applying article 10 in the case of a
citizen of Turkey. (Miciano vs. Brimo, 50 Phil., 867.) Having regard to the
practical autonomy of the Philippine Islands, as above stated, we have
concluded that if article 10 is applicable and the estate in question is that
of a deceased American citizen, the succession shall be regulated in
accordance with the norms of the State of his domicile in the United States.
(Cf. Babcock Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate
of Johnson, 39 Phil., 156, 166.)
The trial court found that under the law of California, upon the death of the
wife, the entire community property without administration belongs to the
surviving husband; that he is the absolute owner of all the community
property from the moment of the death of his wife, not by virtue of
succession or by virtue of her death, but by virtue of the fact that when the
death of the wife precedes that of the husband he acquires the community
property, not as an heir or as the beneficiary of his deceased wife, but
because she never had more than an inchoate interest or expentancy
which is extinguished upon her death. Quoting the case of Estate of
Klumpke (167 Cal., 415, 419), the court said: "The decisions under this
section (1401 Civil Code of California) are uniform to the effect that the
husband does not take the community property upon the death of the wife
by succession, but that he holds it all from the moment of her death as
though required by himself. ... It never belonged to the estate of the
deceased wife."
The argument of the appellee apparently leads to this dilemma: If he takes
nothing by succession from his deceased wife, how can the second
paragraph of article 10 be invoked? Can the appellee be heard to say that
there is a legal succession under the law of the Philippine Islands and no
legal succession under the law of California? It seems clear that the second
paragraph of article 10 applies only when a legal or testamentary
succession has taken place in the Philippines and in accordance with the
law of the Philippine Islands; and the foreign law is consulted only in regard
to the order of succession or the extent of the successional rights; in other
words, the second paragraph of article 10 can be invoked only when the
deceased was vested with a descendible interest in property within the
jurisdiction of the Philippine Islands.
In the case of Clarke vs. Clarke (178 U. S., 186, 191; 44 Law ed., 1028,
1031), the court said:
It is principle firmly established that to the law of the state in
which the land is situated we must look for the rules which govern
its descent, alienation, and transfer, and for the effect and
construction of wills and other conveyances. (United States vs.
Crosby, 7 Cranch, 115; 3 L. ed., 287; Clark vs. Graham, 6 Wheat.,
577; 5 L. ed., 334; McGoon vs. Scales, 9 Wall., 23; 19 L. ed., 545;
Brine vs. Hartford F. Ins. Co., 96 U. S., 627; 24 L. ed., 858.)" (See
also Estate of Lloyd, 175 Cal., 704, 705.) This fundamental
principle is stated in the first paragraph of article 10 of our Civil
Code as follows: "Personal property is subject to the laws of the
nation of the owner thereof; real property to the laws of the
country in which it is situated.
It is stated in 5 Cal. Jur., 478:
In accord with the rule that real property is subject to the lex rei
sitae, the respective rights of husband and wife in such property,
in the absence of an antenuptial contract, are determined by the
law of the place where the property is situated, irrespective of the
domicile of the parties or to the place where the marriage was
celebrated. (See also Saul vs. His Creditors, 5 Martin [N. S.], 569;
16 Am. Dec., 212 [La.]; Heidenheimer vs. Loring, 26 S. W., 99
[Texas].)
12
Under this broad principle, the nature and extent of the title which vested
in Mrs. Gibbs at the time of the acquisition of the community lands here in
question must be determined in accordance with the lex rei sitae.
It is admitted that the Philippine lands here in question were acquired as
community property of the conjugal partnership of the appellee and his
wife. Under the law of the Philippine Islands, she was vested of a title equal
to that of her husband. Article 1407 of the Civil Code provides:
All the property of the spouses shall be deemed partnership
property in the absence of proof that it belongs exclusively to the
husband or to the wife. Article 1395 provides:
"The conjugal partnership shall be governed by the rules of law applicable
to the contract of partnership in all matters in which such rules do not
conflict with the express provisions of this chapter." Article 1414 provides
that "the husband may dispose by will of his half only of the property of the
conjugal partnership." Article 1426 provides that upon dissolution of the
conjugal partnership and after inventory and liquidation, "the net
remainder of the partnership property shall be divided share and share
alike between the husband and wife, or their respective heirs." Under the
provisions of the Civil Code and the jurisprudence prevailing here, the wife,
upon the acquisition of any conjugal property, becomes immediately vested
with an interest and title therein equal to that of her husband, subject to
the power of management and disposition which the law vests in the
husband. Immediately upon her death, if there are no obligations of the
decedent, as is true in the present case, her share in the conjugal property
is transmitted to her heirs by succession. (Articles 657, 659, 661, Civil
Code; cf. also Coronel vs. Ona, 33 Phil., 456, 469.)
which would be regulated by section 1386 of the Civil Code of California
which was in effect at the time of the death of Mrs. Gibbs.
The record does not show what the proper amount of the inheritance tax in
this case would be nor that the appellee (petitioner below) in any way
challenged the power of the Government to levy an inheritance tax or the
validity of the statute under which the register of deeds refused to issue a
certificate of transfer reciting that the appellee is the exclusive owner of
the Philippine lands included in the three certificates of title here involved.
The judgment of the court below of March 10, 1931, is reversed with
directions to dismiss the petition, without special pronouncement as to the
costs.
Avanceña, C. J., Malcolm, Villa-Real, Abad Santos, Hull, and Vickers, JJ.,
concur.
Street, J., dissents.
G.R. No. 61594 September 28, 1990
PAKISTAN INTERNATIONAL AIRLINES CORPORATION, petitioner,
vs
HON. BLAS F. OPLE, in his capacity as Minister of Labor; HON.
VICENTE LEOGARDO, JR., in his capacity as Deputy Minister;
ETHELYNNE B. FARRALES and MARIA MOONYEEN
MAMASIG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.

It results that the wife of the appellee was, by the law of the Philippine
Ledesma, Saludo & Associates for private respondents.
Islands, vested of a descendible interest, equal to that of her husband, in
the Philippine lands covered by certificates of title Nos. 20880, 28336 and
28331, from the date of their acquisition to the date of her death. That
appellee himself believed that his wife was vested of such a title and
interest in manifest from the second of said certificates, No. 28336, dated
FELICIANO, J.:
May 14, 1927, introduced by him in evidence, in which it is certified that
"the spouses Allison D. Gibbs and Eva Johnson Gibbs are the owners in fee
simple of the conjugal lands therein described." On 2 December 1978, petitioner Pakistan International Airlines Corporation
("PIA"), a foreign corporation licensed to do business in the Philippines,
executed in Manila two (2) separate contracts of employment, one with
The descendible interest of Eva Johnson Gibbs in the lands aforesaid was
private respondent Ethelynne B. Farrales and the other with private
transmitted to her heirs by virtue of inheritance and this transmission
respondent Ma. M.C. Mamasig. 1 The contracts, which became effective on
plainly falls within the language of section 1536 of Article XI of Chapter 40
9 January 1979, provided in pertinent portion as follows:
of the Administrative Code which levies a tax on inheritances.
(Cf. Re Estate of Majot, 199 N. Y., 29; 92 N. E., 402; 29 L. R. A. [N. S.], 780.)
It is unnecessary in this proceeding to determine the "order of succession" 5. DURATION OF EMPLOYMENT AND PENALTY
or the "extent of the successional rights" (article 10, Civil Code, supra)

13
 This agreement is for a period of three (3) years, but can
be extended by the mutual consent of the parties.
xxx xxx xxx
6. TERMINATION
xxx xxx xxx
Notwithstanding anything to contrary as herein provided,
PIA reserves the right to terminate this agreement at any
time by giving the EMPLOYEE notice in writing in advance
one month before the intended termination or in lieu
thereof, by paying the EMPLOYEE wages equivalent to
one month's salary.
xxx xxx xxx
10. APPLICABLE LAW:
This agreement shall be construed and governed under
and by the laws of Pakistan, and only the Courts of
Karachi, Pakistan shall have the jurisdiction to consider
any matter arising out of or under this agreement.
Respondents then commenced training in Pakistan. After their training
period, they began discharging their job functions as flight attendants, with
base station in Manila and flying assignments to different parts of the
Middle East and Europe.
On 2 August 1980, roughly one (1) year and four (4) months prior to the
expiration of the contracts of employment, PIA through Mr. Oscar Benares,
counsel for and official of the local branch of PIA, sent separate letters both
dated 1 August 1980 to private respondents Farrales and Mamasig advising
both that their services as flight stewardesses would be terminated
"effective 1 September 1980, conformably to clause 6 (b) of the
employment agreement [they had) executed with [PIA]." 2
On 9 September 1980, private respondents Farrales and Mamasig jointly
instituted a complaint, docketed as NCR-STF-95151-80, for illegal dismissal
and non-payment of company benefits and bonuses, against PIA with the
then Ministry of Labor and Employment ("MOLE"). After several unfruitful
attempts at conciliation, the MOLE hearing officer Atty. Jose M. Pascual
ordered the parties to submit their position papers and evidence supporting
their respective positions. The PIA submitted its position paper, 3 but no
evidence, and there claimed that both private respondents were habitual
absentees; that both were in the habit of bringing in from abroad sizeable
quantities of "personal effects"; and that PIA personnel at the Manila
International Airport had been discreetly warned by customs officials to
advise private respondents to discontinue that practice. PIA further claimed
that the services of both private respondents were terminated pursuant to
the provisions of the employment contract.
In his Order dated 22 January 1981, Regional Director Francisco L. Estrella
ordered the reinstatement of private respondents with full backwages or, in
the alternative, the payment to them of the amounts equivalent to their
salaries for the remainder of the fixed three-year period of their
employment contracts; the payment to private respondent Mamasig of an
amount equivalent to the value of a round trip ticket Manila-USA Manila;
and payment of a bonus to each of the private respondents equivalent to
their one-month salary. 4 The Order stated that private respondents had
attained the status of regular employees after they had rendered more
than a year of continued service; that the stipulation limiting the period of
the employment contract to three (3) years was null and void as violative of
the provisions of the Labor Code and its implementing rules and regulations
on regular and casual employment; and that the dismissal, having been
carried out without the requisite clearance from the MOLE, was illegal and
entitled private respondents to reinstatement with full backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr.,
Deputy Minister, MOLE, adopted the findings of fact and conclusions of the
Regional Director and affirmed the latter's award save for the portion
thereof giving PIA the option, in lieu of reinstatement, "to pay each of the
complainants [private respondents] their salaries corresponding to the
unexpired portion of the contract[s] [of employment] . . .". 5
In the instant Petition for Certiorari, petitioner PIA assails the award of the
Regional Director and the Order of the Deputy Minister as having been
rendered without jurisdiction; for having been rendered without support in
the evidence of record since, allegedly, no hearing was conducted by the
hearing officer, Atty. Jose M. Pascual; and for having been issued in
disregard and in violation of petitioner's rights under the employment
contracts with private respondents.
1. Petitioner's first contention is that the Regional Director, MOLE, had no
jurisdiction over the subject matter of the complaint initiated by private
respondents for illegal dismissal, jurisdiction over the same being lodged in
the Arbitration Branch of the National Labor Relations Commission ("NLRC")
It appears to us beyond dispute, however, that both at the time the
complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco L.
Estrella) and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the
Regional Director had jurisdiction over termination cases.
14
Art. 278 of the Labor Code, as it then existed, forbade the termination of In more details, the major innovations introduced by PD
the services of employees with at least one (1) year of service without prior 850 and its implementing rules and regulations with
clearance from the Department of Labor and Employment: respect to termination and preventive suspension cases
are:
Art. 278. Miscellaneous Provisions — . . .
1. The Regional Director is now required to rule on every
application for clearance, whether there is opposition or
(b) With or without a collective agreement, no employer
not, within ten days from receipt thereof.
may shut down his establishment or dismiss or terminate
the employment of employees with at least one year of
service during the last two (2) years, whether such xxx xxx xxx
service is continuous or broken, without prior written
authority issued in accordance with such rules and
(Emphasis supplied)
regulations as the Secretary may promulgate . . .
(emphasis supplied)
2. The second contention of petitioner PIA is that, even if the Regional
Director had jurisdiction, still his order was null and void because it had
Rule XIV, Book No. 5 of the Rules and Regulations Implementing
been issued in violation of petitioner's right to procedural due
the Labor Code, made clear that in case of a termination without
process . 6 This claim, however, cannot be given serious consideration.
the necessary clearance, the Regional Director was authorized to
Petitioner was ordered by the Regional Director to submit not only its
order the reinstatement of the employee concerned and the
position paper but also such evidence in its favor as it might have.
payment of backwages; necessarily, therefore, the Regional
Petitioner opted to rely solely upon its position paper; we must assume it
Director must have been given jurisdiction over such termination
had no evidence to sustain its assertions. Thus, even if no formal or oral
cases:
hearing was conducted, petitioner had ample opportunity to explain its
side. Moreover, petitioner PIA was able to appeal his case to the Ministry of
Sec. 2. Shutdown or dismissal without clearance. — Any Labor and Employment. 7
shutdown or dismissal without prior clearance shall be
conclusively presumed to be termination of employment
There is another reason why petitioner's claim of denial of due process
without a just cause. The Regional Director shall, in such
must be rejected. At the time the complaint was filed by private
case order the immediate reinstatement of the employee
respondents on 21 September 1980 and at the time the Regional Director
and the payment of his wages from the time of the
issued his questioned order on 22 January 1981, applicable regulation, as
shutdown or dismissal until the time of reinstatement.
noted above, specified that a "dismissal without prior clearance shall be
(emphasis supplied)
conclusively presumed to be termination of employment without a cause",
and the Regional Director was required in such case to" order the
Policy Instruction No. 14 issued by the Secretary of Labor, dated immediate reinstatement of the employee and the payment of his wages
23 April 1976, was similarly very explicit about the jurisdiction of from the time of the shutdown or dismiss until . . . reinstatement." In other
the Regional Director over termination of employment cases: words, under the then applicable rule, the Regional Director did not even
have to require submission of position papers by the parties in view of the
conclusive (juris et de jure) character of the presumption created by such
Under PD 850, termination cases — with or without CBA
applicable law and regulation. In Cebu Institute of Technology v. Minister of
— are now placed under the original jurisdiction of the
Labor and Employment, 8 the Court pointed out that "under Rule 14,
Regional Director. Preventive suspension cases, now
Section 2, of the Implementing Rules and Regulations, the termination of
made cognizable for the first time, are also placed under
[an employee] which was without previous clearance from the Ministry of
the Regional Director. Before PD 850, termination cases
Labor is conclusively presumed to be without [just] cause . . . [a
where there was a CBA were under the jurisdiction of the
presumption which] cannot be overturned by any contrary proof however
grievance machinery and voluntary arbitration, while
strong."
termination cases where there was no CBA were under
the jurisdiction of the Conciliation Section.
3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its
contract of employment with private respondents Farrales and Mamasig,
15
arguing that its relationship with them was governed by the provisions of
its contract rather than by the general provisions of the Labor Code. 9
Paragraph 5 of that contract set a term of three (3) years for that
relationship, extendible by agreement between the parties; while
paragraph 6 provided that, notwithstanding any other provision in the
Contract, PIA had the right to terminate the employment agreement at any
time by giving one-month's notice to the employee or, in lieu of such
notice, one-months salary.
A contract freely entered into should, of course, be respected, as PIA
argues, since a contract is the law between the parties. 10 The principle of
party autonomy in contracts is not, however, an absolute principle. The rule
in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient,"provided they
are not contrary to law, morals, good customs, public order or public
policy." Thus, counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of applicable law,
especially provisions relating to matters affected with public policy, are
deemed written into the contract. 11 Put a little differently, the governing
principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply
contracting with each other. It is thus necessary to appraise the contractual
provisions invoked by petitioner PIA in terms of their consistency with
applicable Philippine law and regulations.
As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE, in
effect held that paragraph 5 of that employment contract was inconsistent
with Articles 280 and 281 of the Labor Code as they existed at the time the
contract of employment was entered into, and hence refused to give effect
to said paragraph 5. These Articles read as follows:
Art. 280. Security of Tenure. — In cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or when
authorized by this Title An employee who is unjustly
dismissed from work shall be entitled to reinstatement
without loss of seniority rights and to his backwages
computed from the time his compensation was withheld
from him up to the time his reinstatement.
Art. 281. Regular and Casual Employment. The provisions
of written agreement to the contrary notwithstanding and
regardless of the oral agreements of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which
are usually necessary or desirable in the usual business
or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the
completion or termination of which has been determined
at the time of the engagement of the employee or where
the work or services to be performed is seasonal in
nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: provided, that, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered as regular employee with respect to the
activity in which he is employed and his employment
shall continue while such actually exists. (Emphasis
supplied)
In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had
occasion to examine in detail the question of whether employment for a
fixed term has been outlawed under the above quoted provisions of the
Labor Code. After an extensive examination of the history and development
of Articles 280 and 281, the Court reached the conclusion that a contract
providing for employment with a fixed period was not necessarily unlawful:
There can of course be no quarrel with the proposition
that where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of
tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals,
etc. But where no such intent to circumvent the law is
shown, or stated otherwise, where the reason for the law
does not exist e.g. where it is indeed the employee
himself who insists upon a period or where the nature of
the engagement is such that, without being seasonal or
for a specific project, a definite date of termination is
a sine qua non would an agreement fixing a period be
essentially evil or illicit, therefore anathema Would such
an agreement come within the scope of Article 280 which
admittedly was enacted "to prevent the circumvention of
the right of the employee to be secured in . . . (his)
employment?"
As it is evident from even only the three examples
already given that Article 280 of the Labor Code, under a
narrow and literal interpretation, not only fails to exhaust
16
 the gamut of employment contracts to which the lack of
a fixed period would be an anomaly, but would also
appear to restrict, without reasonable distinctions, the
right of an employee to freely stipulate with his employer
the duration of his engagement, it logically follows that
such a literal interpretation should be eschewed or
avoided. The law must be given reasonable
interpretation, to preclude absurdity in its application.
Outlawing the whole concept of term employment and
subverting to boot the principle of freedom of contract to
remedy the evil of employers" using it as a means to
prevent their employees from obtaining security of tenure
is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.
xxx xxx xxx
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of
the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with
the concept of regular employment as defined therein
should be construed to refer to the substantive evil that
the Code itself has singled out: agreements entered into
precisely to circumvent security of tenure. It should have
no application to instances where a fixed period of
employment was agreed upon knowingly and voluntarily
by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal
terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus
limited in its purview, the law would be made to apply to
purposes other than those explicitly stated by its framers;
it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended
consequences. (emphasis supplied)
It is apparent from Brent School that the critical consideration is
the presence or absence of a substantial indication that the period
specified in an employment agreement was designed to
circumvent the security of tenure of regular employees which is
provided for in Articles 280 and 281 of the Labor Code. This
indication must ordinarily rest upon some aspect of the agreement
other than the mere specification of a fixed term of the
ernployment agreement, or upon evidence aliunde of the intent to
evade.
Examining the provisions of paragraphs 5 and 6 of the employment
agreement between petitioner PIA and private respondents, we consider
that those provisions must be read together and when so read, the fixed
period of three (3) years specified in paragraph 5 will be seen to have been
effectively neutralized by the provisions of paragraph 6 of that agreement.
Paragraph 6 in effect took back from the employee the fixed three (3)-year
period ostensibly granted by paragraph 5 by rendering such period in effect
a facultative one at the option of the employer PIA. For petitioner PIA claims
to be authorized to shorten that term, at any time and for any cause
satisfactory to itself, to a one-month period, or even less by simply paying
the employee a month's salary. Because the net effect of paragraphs 5 and
6 of the agreement here involved is to render the employment of private
respondents Farrales and Mamasig basically employment at the pleasure of
petitioner PIA, the Court considers that paragraphs 5 and 6 were intended
to prevent any security of tenure from accruing in favor of private
respondents even during the limited period of three (3) years,13 and thus to
escape completely the thrust of Articles 280 and 281 of the Labor Code.
Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the applicable law
of the agreement and, secondly, lays the venue for settlement of any
dispute arising out of or in connection with the agreement "only [in] courts
of Karachi Pakistan". The first clause of paragraph 10 cannot be invoked to
prevent the application of Philippine labor laws and regulations to the
subject matter of this case, i.e., the employer-employee relationship
between petitioner PIA and private respondents. We have already pointed
out that the relationship is much affected with public interest and that the
otherwise applicable Philippine laws and regulations cannot be rendered
illusory by the parties agreeing upon some other law to govern their
relationship. Neither may petitioner invoke the second clause of paragraph
10, specifying the Karachi courts as the sole venue for the settlement of
dispute; between the contracting parties. Even a cursory scrutiny of the
relevant circumstances of this case will show the multiple and substantive
contacts between Philippine law and Philippine courts, on the one hand,
and the relationship between the parties, upon the other: the contract was
not only executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and respondents, while
petitioner, although a foreign corporation, is licensed to do business (and
actually doing business) and hence resident in the Philippines; lastly,
private respondents were based in the Philippines in between their
assigned flights to the Middle East and Europe. All the above contacts point
to the Philippine courts and administrative agencies as a proper forum for
the resolution of contractual disputes between the parties. Under these
circumstances, paragraph 10 of the employment agreement cannot be
17
given effect so as to oust Philippine agencies and courts of the jurisdiction
vested upon them by Philippine law. Finally, and in any event, the
petitioner PIA did not undertake to plead and prove the contents of
Pakistan law on the matter; it must therefore be presumed that the
applicable provisions of the law of Pakistan are the same as the applicable
provisions of Philippine law. 14
We conclude that private respondents Farrales and Mamasig were illegally
dismissed and that public respondent Deputy Minister, MOLE, had not
committed any grave abuse of discretion nor any act without or in excess
of jurisdiction in ordering their reinstatement with backwages. Private
respondents are entitled to three (3) years backwages without qualification
or deduction. Should their reinstatement to their former or other
substantially equivalent positions not be feasible in view of the length of
time which has gone by since their services were unlawfully terminated,
petitioner should be required to pay separation pay to private respondents
amounting to one (1) month's salary for every year of service rendered by
them, including the three (3) years service putatively rendered.
ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for lack of
merit, and the Order dated 12 August 1982 of public respondent is hereby
AFFIRMED, except that (1) private respondents are entitled to three (3)
years backwages, without deduction or qualification; and (2) should
reinstatement of private respondents to their former positions or to
substantially equivalent positions not be feasible, then petitioner shall, in
lieu thereof, pay to private respondents separation pay amounting to one
(1)-month's salary for every year of service actually rendered by them and
for the three (3) years putative service by private respondents. The
Temporary Restraining Order issued on 13 September 1982 is hereby
LIFTED. Costs against petitioner.
SO ORDERED.
Fernan (C.J., Chairman), Gutierrez, Jr., Bidin and Cortés, JJ., concur.
G.R. No. L-40597 June 29, 1979
AGUSTINO B. ONG YIU, petitioner,
vs.
HONORABLE COURT OF APPEALS and PHILIPPINE AIR LINES,
INC., respondents.
MELENCIO-HERRERA, J.:
In this Petition for Review by Certiorari, petitioner, a practicing lawyer and
businessman, seeks a reversal of the Decision of the Court of Appeals in
CA-G.R. No. 45005-R, which reduced his claim for damages for breach of
contract of transportation.
The facts are as follows:
On August 26, 1967, petitioner was a fare paying passenger of respondent
Philippine Air Lines, Inc. (PAL), on board Flight No. 463-R, from Mactan
Cebu, bound for Butuan City. He was scheduled to attend the trial of Civil
Case No. 1005 and Spec. Procs. No. 1125 in the Court of First Instance,
Branch II, thereat, set for hearing on August 28-31, 1967. As a passenger,
he checked in one piece of luggage, a blue "maleta" for which he was
issued Claim Check No. 2106-R (Exh. "A"). The plane left Mactan Airport,
Cebu, at about 1:00 o'clock P.M., and arrived at Bancasi airport, Butuan
City, at past 2:00 o'clock P.M., of the same day. Upon arrival, petitioner
claimed his luggage but it could not be found. According to petitioner, it
was only after reacting indignantly to the loss that the matter was attended
to by the porter clerk, Maximo Gomez, which, however, the latter denies, At
about 3:00 o'clock P.M., PAL Butuan, sent a message to PAL, Cebu,
inquiring about the missing luggage, which message was, in turn relayed in
full to the Mactan Airport teletype operator at 3:45 P.M. (Exh. "2") that
same afternoon. It must have been transmitted to Manila immediately, for
at 3:59 that same afternoon, PAL Manila wired PAL Cebu advising that the
luggage had been over carried to Manila aboard Flight No. 156 and that it
would be forwarded to Cebu on Flight No. 345 of the same day. Instructions
were also given that the luggage be immediately forwarded to Butuan City
on the first available flight (Exh. "3"). At 5:00 P.M. of the same afternoon,
PAL Cebu sent a message to PAL Butuan that the luggage would be
forwarded on Fright No. 963 the following day, August 27, 196'(. However,
this message was not received by PAL Butuan as all the personnel had
already left since there were no more incoming flights that afternoon.
In the meantime, petitioner was worried about the missing luggage
because it contained vital documents needed for trial the next day. At
10:00 o'clock that evening, petitioner wired PAL Cebu demanding the
delivery of his baggage before noon the next day, otherwise, he would hold
PAL liable for damages, and stating that PAL's gross negligence had caused
him undue inconvenience, worry, anxiety and extreme embarrassment
(Exh. "B"). This telegram was received by the Cebu PAL supervisor but the
latter felt no need to wire petitioner that his luggage had already been
forwarded on the assumption that by the time the message reached Butuan
City, the luggage would have arrived.
18
Early in the morning of the next day, August 27, 1967, petitioner went to First of all, may we apologize for the delay in informing
the Bancasi Airport to inquire about his luggage. He did not wait, however, you of the result of our investigation since we visited you
for the morning flight which arrived at 10:00 o'clock that morning. This in your office last August 31, 1967. Since there are
flight carried the missing luggage. The porter clerk, Maximo Gomez, paged stations other than Cebu which are involved in your case,
petitioner, but the latter had already left. A certain Emilio Dagorro a driver we have to communicate and await replies from them.
of a "colorum" car, who also used to drive for petitioner, volunteered to We regret to inform you that to date we have not found
take the luggage to petitioner. As Maximo Gomez knew Dagorro to be the the supposedly lost folder of papers nor have we been
same driver used by petitioner whenever the latter was in Butuan City, able to pinpoint the personnel who allegedly pilferred
Gomez took the luggage and placed it on the counter. Dagorro examined your baggage.
the lock, pressed it, and it opened. After calling the attention of Maximo
Gomez, the "maleta" was opened, Gomez took a look at its contents, but
You must realize that no inventory was taken of the cargo
did not touch them. Dagorro then delivered the "maleta" to petitioner, with
upon loading them on any plane. Consequently, we have
the information that the lock was open. Upon inspection, petitioner found
no way of knowing the real contents of your baggage
that a folder containing certain exhibits, transcripts and private documents
when same was loaded.
in Civil Case No. 1005 and Sp. Procs. No. 1126 were missing, aside from
two gift items for his parents-in-law. Petitioner refused to accept the
luggage. Dagorro returned it to the porter clerk, Maximo Gomez, who We realized the inconvenience you encountered of this
sealed it and forwarded the same to PAL Cebu. incident but we trust that you will give us another
opportunity to be of better service to you.
Meanwhile, petitioner asked for postponement of the hearing of Civil Case
No. 1005 due to loss of his documents, which was granted by the Court Very truly yours,
(Exhs. "C" and "C-1"). Petitioner returned to Cebu City on August 28, 1967.
In a letter dated August 29, 1967 addressed to PAL, Cebu, petitioner called
PHILIPPINE AIR LIN
attention to his telegram (Exh. "D"), demanded that his luggage be
produced intact, and that he be compensated in the sum of P250,000,00
for actual and moral damages within five days from receipt of the letter, (Sgd) JEREMIAS S.
otherwise, he would be left with no alternative but to file suit (Exh. "D").
Branch Supervisor
On August 31, 1967, Messrs. de Leon, Navarsi, and Agustin, all of PAL Cebu,
went to petitioner's office to deliver the "maleta". In the presence of Mr.
Cebu
Jose Yap and Atty. Manuel Maranga the contents were listed and receipted
for by petitioner (Exh. "E").
(Exhibit G, Folder of Exhibits) 1

On September 5, 1967, petitioner sent a tracer letter to PAL Cebu inquiring

about the results of the investigation which Messrs. de Leon, Navarsi, and
Agustin had promised to conduct to pinpoint responsibility for the
unauthorized opening of the "maleta" (Exh. "F").
The following day, September 6, 1967, PAL sent its reply hereinunder
quoted verbatim:
On September 13, 1967, petitioner filed a Complaint against PAL for
damages for breach of contract of transportation with the Court of First
Instance of Cebu, Branch V, docketed as Civil Case No. R-10188, which PAL
traversed. After due trial, the lower Court found PAL to have acted in bad
faith and with malice and declared petitioner entitled to moral damages in
the sum of P80,000.00, exemplary damages of P30,000.00, attorney's fees
of P5,000.00, and costs.

Dear Atty. Ong Yiu:

This is with reference to your September 5, 1967, letter
to Mr. Ricardo G. Paloma, Acting Manager, Southern
Philippines.
Both parties appealed to the Court of Appeals — petitioner in so far as he
was awarded only the sum of P80,000.00 as moral damages; and
defendant because of the unfavorable judgment rendered against it.

19
On August 22, 1974, the Court of Appeals,* finding that PAL was guilty only
of simple negligence, reversed the judgment of the trial Court granting
petitioner moral and exemplary damages, but ordered PAL to pay plaintiff
the sum of P100.00, the baggage liability assumed by it under the condition
of carriage printed at the back of the ticket.
Hence, this Petition for Review by Certiorari, filed on May 2, 1975, with
petitioner making the following Assignments of Error:
I. THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING RESPONDENT PAL GUILTY ONLY OF SIMPLE
NEGLIGENCE AND NOT BAD FAITH IN THE BREACH OF ITS
CONTRACT OF TRANSPORTATION WITH PETITIONER.
II. THE HONORABLE COURT OF APPEALS MISCONSTRUED
THE EVIDENCE AND THE LAW WHEN IT REVERSED THE
DECISION OF THE LOWER COURT AWARDING TO
PETITIONER MORAL DAMAGES IN THE AMOUNT OF
P80,000.00, EXEMPLARY DAMAGES OF P30,000.00, AND
P5,000.00 REPRESENTING ATTORNEY'S FEES, AND
ORDERED RESPONDENT PAL TO COMPENSATE PLAINTIFF
THE SUM OF P100.00 ONLY, CONTRARY TO THE EXPLICIT
PROVISIONS OF ARTICLES 2220, 2229, 2232 AND 2234
OF THE CIVIL CODE OF THE PHILIPPINES.
On July 16, 1975, this Court gave due course to the Petition.
There is no dispute that PAL incurred in delay in the delivery of petitioner's
luggage. The question is the correctness of respondent Court's conclusion
that there was no gross negligence on the part of PAL and that it had not
acted fraudulently or in bad faith as to entitle petitioner to an award of
moral and exemplary damages.
From the facts of the case, we agree with respondent Court that PAL had
not acted in bad faith. Bad faith means a breach of a known duty through
some motive of interest or ill will. 2 It was the duty of PAL to look for
petitioner's luggage which had been miscarried. PAL exerted due diligence
in complying with such duty.
As aptly stated by the appellate Court:
We do not find any evidence of bad faith in this. On the
contrary, We find that the defendant had exerted diligent
effort to locate plaintiff's baggage. The trial court saw
evidence of bad faith because PAL sent the telegraphic
message to Mactan only at 3:00 o'clock that same
afternoon, despite plaintiff's indignation for the non-
arrival of his baggage. The message was sent within less
than one hour after plaintiff's luggage could not be
located. Efforts had to be exerted to locate plaintiff's
maleta. Then the Bancasi airport had to attend to other
incoming passengers and to the outgoing passengers.
Certainly, no evidence of bad faith can be inferred from
these facts. Cebu office immediately wired Manila
inquiring about the missing baggage of the plaintiff. At
3:59 P.M., Manila station agent at the domestic airport
wired Cebu that the baggage was over carried to Manila.
And this message was received in Cebu one minute
thereafter, or at 4:00 P.M. The baggage was in fact sent
back to Cebu City that same afternoon. His Honor stated
that the fact that the message was sent at 3:59 P.M. from
Manila and completely relayed to Mactan at 4:00 P.M., or
within one minute, made the message appear spurious.
This is a forced reasoning. A radio message of about 50
words can be completely transmitted in even less than
one minute depending upon atmospheric conditions.
Even if the message was sent from Manila or other
distant places, the message can be received within a
minute. that is a scientific fact which cannot be
questioned. 3
Neither was the failure of PAL Cebu to reply to petitioner's rush telegram
indicative of bad faith, The telegram (Exh. B) was dispatched by petitioner
at around 10:00 P.M. of August 26, 1967. The PAL supervisor at Mactan
Airport was notified of it only in the morning of the following day. At that
time the luggage was already to be forwarded to Butuan City. There was no
bad faith, therefore, in the assumption made by said supervisor that the
plane carrying the bag would arrive at Butuan earlier than a reply telegram.
Had petitioner waited or caused someone to wait at the Bancasi airport for
the arrival of the morning flight, he would have been able to retrieve his
luggage sooner.
In the absence of a wrongful act or omission or of fraud or bad faith,
petitioner is not entitled to moral damages.
Art. 2217. Moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendant's wrongful act of omission.
20
 Art. 2220. Willful injury to property may be a legal ground
for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
Petitioner is neither entitled to exemplary damages. In contracts, as
provided for in Article 2232 of the Civil Code, exemplary damages can be
granted if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner, which has not been proven in this case.
Petitioner further contends that respondent Court committed grave error
when it limited PAL's carriage liability to the amount of P100.00 as
stipulated at the back of the ticket. In this connection, respondent Court
opined:
As a general proposition, the plaintiff's maleta having
been pilfered while in the custody of the defendant, it is
presumed that the defendant had been negligent. The
liability, however, of PAL for the loss, in accordance with
the stipulation written on the back of the ticket, Exhibit
12, is limited to P100.00 per baggage, plaintiff not having
declared a greater value, and not having called the
attention of the defendant on its true value and paid the
tariff therefor. The validity of this stipulation is not
questioned by the plaintiff. They are printed in reasonably
and fairly big letters, and are easily readable. Moreover,
plaintiff had been a frequent passenger of PAL from Cebu
to Butuan City and back, and he, being a lawyer and
businessman, must be fully aware of these conditions. 4
We agree with the foregoing finding. The pertinent Condition of Carriage
printed at the back of the plane ticket reads:
8. BAGGAGE LIABILITY ... The total liability of the Carrier
for lost or damaged baggage of the passenger is LIMITED
TO P100.00 for each ticket unless a passenger declares a
higher valuation in excess of P100.00, but not in excess,
however, of a total valuation of P1,000.00 and additional
charges are paid pursuant to Carrier's tariffs.
There is no dispute that petitioner did not declare any higher value for his
luggage, much less did he pay any additional transportation charge.
But petitioner argues that there is nothing in the evidence to show that he
had actually entered into a contract with PAL limiting the latter's liability for
loss or delay of the baggage of its passengers, and that Article 1750* of the
Civil Code has not been complied with.
While it may be true that petitioner had not signed the plane ticket (Exh.
"12"), he is nevertheless bound by the provisions thereof. "Such provisions
have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or
assent to the regulation". 5 It is what is known as a contract of "adhesion",
in regards which it has been said that contracts of adhesion wherein one
party imposes a ready made form of contract on the other, as the plane
ticket in the case at bar, are contracts not entirely prohibited. The one who
adheres to the contract is in reality free to reject it entirely; if he adheres,
he gives his consent. 6 And as held in Randolph v. American Airlines, 103
Ohio App. 172, 144 N.E. 2d 878; Rosenchein vs. Trans World Airlines, Inc.,
349 S.W. 2d 483, "a contract limiting liability upon an agreed valuation
does not offend against the policy of the law forbidding one from
contracting against his own negligence.
Considering, therefore, that petitioner had failed to declare a higher value
for his baggage, he cannot be permitted a recovery in excess of
P100.00.Besides, passengers are advised not to place valuable items inside
their baggage but "to avail of our V-cargo service " (Exh. "1"). I t is likewise
to be noted that there is nothing in the evidence to show the actual value
of the goods allegedly lost by petitioner.
There is another matter involved, raised as an error by PAL — the fact that
on October 24, 1974 or two months after the promulgation of the Decision
of the appellate Court, petitioner's widow filed a Motion for Substitution
claiming that petitioner died on January 6, 1974 and that she only came to
know of the adverse Decision on October 23, 1974 when petitioner's law
partner informed her that he received copy of the Decision on August 28,
1974. Attached to her Motion was an Affidavit of petitioner's law partner
reciting facts constitutive of excusable negligence. The appellate Court
noting that all pleadings had been signed by petitioner himself allowed the
widow "to take such steps as she or counsel may deem necessary." She
then filed a Motion for Reconsideration over the opposition of PAL which
alleged that the Court of Appeals Decision, promulgated on August 22,
1974, had already become final and executory since no appeal had been
interposed therefrom within the reglementary period.
Under the circumstances, considering the demise of petitioner himself, who
acted as his own counsel, it is best that technicality yields to the interests
of substantial justice. Besides, in the 'last analysis, no serious prejudice has
been caused respondent PAL.
In fine, we hold that the conclusions drawn by respondent Court from the
evidence on record are not erroneous.
21
WHEREFORE, for lack of merit, the instant Petition is hereby denied, and
the judgment sought to be reviewed hereby affirmed in toto.
No costs.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Fernandez, Guerrero and De Castro, JJ.,
concur.
G.R. No. L-45193 April 5, 1939
EMILIE ELMIRA RENEE BOUDARD, RAYMOND ANTONIN BOUDARD,
GINETTE ROSE ADELAIDE BOUDARD and MONIQUE VICTOIRE
BOUDARD, plaintiffs-appellants,
vs.
STEWART EDDIE TAIT, defendant-appellee.
Ramirez and Ortigas for appellants.
Gibbs, McDonough and Ozaeta for appellee.
DIAZ, J.:
Plaintiffs appeal from a judgment of the Court of First Instance of Manila
dismissing the case instituted by them, thereby overruling their complaint,
and sentencing them to pay the costs. They now contend in their brief that:
I. The lower court erred in not admitting Exhibits D, E, F and H to
M-1 of plaintiffs.
II. The lower court erred in declaring that it was indispensable for
the defendant to be served with summons in Hanoi.
III. The lower court erred in declaring that service by publication,
with personal notice by the French Consul in Manila, was not
sufficient.
IV. The lower court erred in declaring that the Court of Hanoi had
no jurisdiction over the person of the defendant.
V. The lower court erred in dismissing this case, instead of
sentencing the defendant to pay to the plaintiffs the amounts
claimed in the complaint as adjudged by the Court of Hanoi; and
VI. The lower court erred in denying the motion for new trial on the
ground that the decision is contrary to the law and the evidence.
Briefly stated, the pertinent facts of the case, that we glean from the
records, are as follows: The appellant Emilie Elmira Renee Boudard, in her
capacity as widow of Marie Theodore Jerome Boudard and as guardian of
her coappellants, her children born during her marriage with the deceased,
obtained a judgment in their favor from the civil division of the Court of
First Instance of Hanoi, French Indo-China, on June 27, 1934, for the sum of
40,000 piastras, equivalent, according to the rate of exchange at the time
of the rendition of the judgment, to P56,905.77, Philippine currency, plus
interest the amount or rate of which is not given. The judgment was
rendered against Stewart Eddie Tait who had been declared in default for
his failure to appear at the trial before said court.
Appellants' action, by virtue of which they obtained the foregoing
judgment, was based on the fact that Marie Theodore Jerome Boudard, who
was an employee of Stewart Eddie Tait, was killed in Hanoi by other
employees of said Tait, although "outside of the fulfillment of a duty",
according to the English translation of a certified copy of the decision in
French, presented by the appellants. The dismissal of appellants' complaint
by the lower court was based principally on the lack of jurisdiction of the
Court of Hanoi to render the judgment in question, for the execution of
which this action was instituted in this jurisdiction. The lack of jurisdiction
was discovered in the decision itself of the Court of Hanoi which states that
the appellee was not a resident of, nor had a known domicile in, that
country.
The evidence adduced at the trial conclusively proves that neither the
appellee nor his agent or employees were ever in Hanoi, French Indo-China;
and that the deceased Marie Theodore Jerome Boudard had never, at any
time, been his employee. The appellee's first intimation of his having been
sued and sentenced to pay a huge sum by the civil division of the Court of
First Instance of Hanoi was when he was served with summons in the
present case.
Passing now to the consideration of the errors assigned by the appellants,
we must say that it was really unnecessary for the lower court to admit
Exhibit D, E, F and H to M-1, nor can these exhibits be admitted as
evidence, for, as to the first point, the appellants failed to show that the
proceedings against the appellee in the Court of Hanoi were in accordance
with the laws of France then in force; and as to the second point, it appears
that said documents are not of the nature mentioned in sections 304 and
22
305 of Act No. 190. They are not copies of the judicial record of the
proceedings against the appellee in the Court of Hanoi, duly certified by the
proper authorities there, whose signatures should be authenticated by the
Consul or some consular agent of the United States in said country. The
appellants argue that the papers are the original documents and that the
Honorable French Consul in the Philippines had confirmed this fact. Such
argument is not sufficient to authorize a deviation from a rule established
and sanctioned by law. To comply with the rule, the best evidence of
foreign judicial proceedings is a certified copy of the same with all the
formalities required in said sections 304 and 305 for only thus can one be
absolutely sure of the authenticity of the record. On the other hand said
exhibits or documents, if admitted, would only corroborate and strengthen
the evidence of the appellee which in itself is convincing, and the
conclusion of the lower court that the appellee is not liable for the amount
to which he was sentenced, as alleged, for he was not duly tried or even
summoned in conformity with the law. It is said that the French law
regarding summons, according to its English translation presented by the
appellants, is of the following tenor:
"SEC. 69 (par. 8). Those who have no known residence in France, in the
place of their present residence: if the place is unknown, the writ shall be
posted at the main door of the hall of the court where the complaint has
been filed; a second copy shall be given to the Attorney-General of the
Republic who shall visae the original." But then, Exhibits E, E-1, F and F-1
show that the summons alleged to have been addressed to the appellee,
was delivered in Manila on September 18, 1933, to J. M. Shotwell, a
representative or agent of Churchill & Tait Inc., which is an entity entirely
different from the appellee.
nonresident is unavailing to give jurisdiction in an action against
him personally for money recovery. (Pennoyer vs. Neff, 95 U. S.,
741 [24 Law. ed., 565].) There must be actual service within the
State of notice upon him or upon some one authorized to accept
service for him. (Goldey vs. Morning News, 156 U. S., 518 [15 S.
Ct., 559; 39 Law. ed., 517].) A personal judgment rendered against
a nonresident, who has neither been served with process nor
appeared in the suit, is without validity. (McDonald vs. Mabee, 243
U. S., 90 [37 S. Ct., 343; 61 Law, ed., 608; L. R. A. 1917F, 485].)
The mere transaction of business in a state by nonresident natural
persons does not imply consent to be bound by the process of its
courts. (Flexner vs.Farson, 248 U. S., 289 [39 S. Ct., 97; 63 Law.
ed., 250].)" (Cited in Skandinaviska Granit Aktiebolaget vs.Weiss,
234 N. Y. S., 202, 206, 207.)
The process of a court has no extraterritorial effect, and no
jurisdiction is acquired over the person of the defendant by
serving him beyond the boundaries of the state. Nor has a
judgment of a court of a foreign country against a resident of his
country having no property in such foreign country based on
process served here, any effect here against either the defendant
personally or his property situated here. (5 R. C. L., 912.)
Process issuing from the courts of one state or country cannot run
into another, and although a nonresident defendant may have
been personally served with such process in the state or country
of his domicile, it will not give such jurisdiction as to authorize a
personal judgment against him. (23 Cyc., 688.)

Moreover, the evidence of record shows that the appellee was not in Hanoi
It can not be said that the decision rendered by the Court of Hanoi should
during the time mentioned in the complaint of the appellants, nor were his
be conclusive to such an extent that it cannot be contested, for it merely
employees or representatives. The rule in matters of this nature is that
constitutes, from the viewpoint of our laws, prima facie evidence of the
judicial proceedings in a foreign country, regarding payment of money, are
justness of appellants' claim, and, as such, naturally admits proof to the
only effective against a party if summons is duly served on him within such
contrary. This is precisely the provision of section 311 of Act No. 190, as
foreign country before the proceedings.
interpreted in the case of Ingenohl vs. Walter E. Olsen & Co. (47 Phil.,
189):0
The fundamental rule is that jurisdiction in personam over
nonresidents, so as to sustain a money judgment, must be based
The effect of a judgment of any other tribunal of a foreign country,
upon personal service within the state which renders the
having jurisdiction to pronounce the judgment, is as follows:
judgment. (Pennoyer vs. Neff, 95 U. S., 714; 24 Law. ed., 565;
Twining vs. New Jersy, 211 U. S., 78; 29 S. Ct., 14; 53 Law. ed., 97;
Continental National Bank of Boston vs. Thurber, 143 N. Y., 648; 1. In case of a judgment against a specific thing, the judgment is
37 N. E., 828.) conclusive upon the title to the thing;

The process of a court of one state cannot run into another and
summon a party there domiciled to respond to proceedings
against him. (Hess vs. Pawloski, 274 U. S., 352, 355; 47 S. Ct.,
632, 633 [71 Law. ed., 109].) Notice sent outside the state to a
2. In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title; but the judgment may
be repelled by evidence of a want of jurisdiction, want of notice to
23
 the party, collusion, fraud, or clear mistake of law or fact. (Sec.
311 of Act No. 190.)
In view of the foregoing considerations, our conclusion is that we find no
merit in the errors assigned to the lower court and the appealed judgment
is in accordance with the law.
Wherefore, the judgment is affirmed, with costs against the appellants. So
ordered.
Hilton v. Guyot, 159 U.S. 113 (1895), was a case decided by theUnited
States Supreme Court in which the court described the factors to be used
when considering the application of comity.
No law has any effect beyond the limits of thesovereignty from which
its authority is derived. The extent to which one nation shall be allowed to
operate within the dominion of another nation, depends upon the comity of
nations. Comity is neither a matter of absolute obligation, nor of mere
courtesy and good will. It is a recognition which one nation allows within its
territory to the legislative, executive or judicial acts of another nation,
having due regard both to international duty and convenience, and to the
rights of its own citizens or other persons who are under the protection of
its laws. The comity thus extended to other nations is no impeachment of
sovereignty. It is the voluntary act of the nation by which it is offered, and
is inadmissible when contrary to its policy, or prejudicial to its interests. But
it contributes so largely to promote justice between individuals, and to
produce a friendly intercourse between the sovereignty to which they
belong, that courts of justice have continually acted upon it, as a part of the
voluntary law of nations. It is not the comity of the courts, but the comity of
the nation, which is administered and ascertained in the same way, and
guided by the same reasoning, by which all other principles of municipal
law are ascertained and guided.
SPOUSES TIMOTEO RECAÑA, JR. AND ESTER RECAÑA,
Petitioners,
G.R. No. 123850
January 05, 2001
-versus-
THE COURT OF APPEALS AND AURORA PADPAD, LUCILA
ARBOLEDA, ENRIQUE ARBOLEDA, AGUSTIN, REYNALDO,
RODOLFO AND ROLANDO ALL SURNAMED ARBOLEDA IN
REPRESENTATION OF THEIR FATHER ERNESTO
ARBOLEDA,
Respondents.
DECISION
QUISUMBING, J.:
This petition for review on certiorari under Rule 45 seeks to set aside the
decision[1] Rollo, pp. 35-43. of the Court of Appeals promulgated on
October 13, 1995 and its resolution[2] Id. at 45. dated February 7, 1996,
which denied petitioners’ motion for reconsideration. The decision of the
respondent court affirmed with modification the decision[3] Id. at 46-50. of
the Regional Trial Court of Manila, Branch 03, in Civil Case No. 91-56327.
The subject of this case is Lot 6 of Block 2 of the Tondo Foreshore Land
which the Land Tenure Administration, pursuant to Republic Act No. 1597,
[4] An Act Providing For The Subdivision Of The Tondo Foreshore Land Into
Lots And The Sale Of Said Lots To Their Lessees Or To Bona Fide Occupants
Of Said Land, And For Other Purposes; enacted June 16, 1956. sold to
Macario Arboleda, petitioner-spouses’ predecessor-in-interest. The lot was
covered by Original Certificate of Title No. 7676 issued on February 1, 1962
in the name of Arboleda. Petitioner Ester Recaña and private respondents
are the children and heirs of Macario Arboleda.[5] Rollo, p. 35.
For many years, realty taxes on the lot had not been paid both before and
after the death of Arboleda. Thus, on August 26, 1980, the City Treasurer of
Manila auctioned the lot for sale due to tax delinquency, under Presidential
Decree No. 464.[6] Enacting A Real Property Tax Code; took effect June 1,
1974. Spouses Cirilo and Miguela Montejo purchased the lot at a public
auction and were issued a transfer certificate of title.[7]Rollo, pp. 35-
36.chan robles virtual law library
On April 25, 1984, the Montejos sold the property to petitioner spouses,
who also refunded the amount equivalent to the delinquent taxes paid and
other expenses entailed. Petitioners thus became the owners of the subject
lot, evinced by Transfer Certificate of Title No. 1464015.[8] Id. at 36.
On March 5, 1991, private respondents Aurora Padpad et al. filed Civil Case
No. 91-56327 for declaration of co-ownership and partition against
petitioners in the Regional Trial Court of Manila.[9] Id. at 51-54. They
claimed co-ownership of the subject lot with petitioners, asserting that the
repurchase by the latter of the lot redounded to their benefit as co-heirs
and now as co-owners. In their complaint, they based their claim of co-
24
ownership on the conditions of transfer in the deed of sale executed
between Macario Arboleda and the Land Tenure Administration providing,
inter alia, as follows:
"2. "Every conveyance shall be subject to repurchase by the original
purchaser or his legal (heirs) within a period of five years from the date of
the conveyance; "
5. That this contract shall be binding upon the heirs, executors,
administrators, successors, and assigns of the respective parties thereof;
and
6. That the condition contained in paragraph 2 hereof shall be annotated as
encumbrance on the certificate of title to be issued in favor of the VENDEE
and/or his successor-in-interest."[10] Rollo, p. 52.chan robles virtual law
library
Private respondents also invoked the rule that redemption by a co-owner of
auctioned property arising from foreclosure redounds to the benefit of all
co-owners.[11] Mariano vs. CA, 222 SCRA 736, 740 (1993).
After trial, the lower court rendered a decision in favor of herein private
respondents, then plaintiffs. It disposed -
WHEREFORE, judgment is rendered for the plaintiffs:
1) Declaring Lot 6, Block 2 of the Tondo Foreshore Land, covered now by
TCT No. 1464015, of the Registry of Deeds of Manila, in the name of Ester
A. Recaña and Timoteo Recaña, as owned-in-common with equal shares by
the plaintiffs and defendants " Aurora A. Padpad; Lucila Arboleda, Enrique
Arboleda; the deceased Ernesto Arboleda, represented by his legal heir,
Nenita Agustin, Reynaldo, Rodolfo and Rolando; Ester Recaña; and Milagros
A. Clar[a]val;
2) Ordering Register of Deeds of Manila to cancel TCT No. 1464014 in the
name of Timoteo and Ester Recaña, and to issue in lieu thereof a new
Transfer Certificate of Title in the names of all the aforementioned co-
owners with equal pro-indiviso shares thereon;
3) Ordering the defendants to pay the costs of the suit, and chan robles
virtual law library
4) Dismissing the defendants’ counterclaim for lack of merit.
SO ORDERED."[12] Rollo, p. 50.
On appeal, the Court of Appeals affirmed with modification the trial court,
thus:
"WHEREFORE, we affirm the decision of the lower court with modification
and judgment is hereby rendered:
1) Declaring Lot 6, Block 2 of the Tondo Foreshore Land, covered now by
TCT No. 164015 of the Registry of Deeds of Manila, in the name of Ester A.
Recaña and Timoteo Recaña, as owned-in-common with equal shares by
the plaintiffs and defendants " Aurora A. Padpad; Lucila Arboleda, Enrique
Arboleda; the deceased Ernesto Arboleda, represented by his legal heirs,
Nenita Agustin, Reynaldo, Rodolfo and Rolando; Ester Recaña; and Milagros
A. Claraval;
2) Ordering the Registry of Deeds of Manila to cancel TCT No. 164015 in the
name of Timoteo and Ester Recaña, and to issue in lieu thereof a new
Transfer Certificate of Title in the names of all the aforementioned co-
owners with equal pro-indiviso shares thereon;chan robles virtual law
library
3) Ordering the appellees to reimburse appellants for the expenses
incurred by appellants in the repurchase of the land proportionate to their
respective pro-indiviso shares.
4) Ordering appellants to pay the costs of the suit.
SO ORDERED."[13] Id. at 42.
Hence, the present petition.
It is petitioners’ contention that the last paragraph of Section 4 of Republic
Act No. 1597, substantially reproduced in the deed of sale between the
Land Tenure Administration and Macario Arboleda, does not apply to the
attendant facts and circumstances in this case. Instead, they insist that it is
Section 78 of P.D. No. 464 which is applicable. Section 4 of Republic Act No.
1597, the law governing the subdivision of the Tondo Foreshore Lands from
which the subject property emanated, provides "chan robles virtual law
library
"Sec. 4. Lands acquired under this Act shall not, except in favor of the
Government or any of its branches or institutions, or legally constituted
banking corporations, be subject to encumbrance or alienation within 15
years after the date of the issuance of the transfer certificate of title to the
25
purchaser, nor shall they become liable to the satisfaction of any debt
contracted prior to the expiration of said period; Provided, however, that
such lands may be mortgaged even before said period has expired.
Every conveyance shall be subject to repurchase by the original purchaser
or his legal heirs within a period of 5 years from the date of conveyance."
Petitioners also stress that R.A. No. 1597 is a special law enacted to apply
to the Tondo Foreshore Lands. They further point out that P.D. No. 464 is
likewise a special law governing the collection of real property tax,
regardless of whether the owner acquired the property from a private
person or from a government entity. They claim that no distinction
whatsoever is found in the decree on the nature and source of the tax
delinquent property, whether express or implied.

Private respondents argue that since petitioners repurchased the property

Lastly, petitioners claim that Section 4 of R.A. No. 1597 has been expressly
from the Montejo spouses well within the five-year period specified in the
repealed and abrogated by P.D. No. 464, by virtue of the following
deed of sale and in Section 4 of R.A. No. 1597, they are deemed to have
provision:
redeemed the property for all the co-owners, themselves including.chan
robles virtual law library
"Sec. 111. Repealing Clause. " Commonwealth Act Numbered Four Hundred
Seventy, as amended; the pertinent provisions of the charters of all cities;
Petitioners, however, insist that it is Section 78 of P.D. No. 464 which
Section two thousand ninety-two of the Revised Administrative Code; and
should apply. This Section provides for a one-year redemption period for
all acts, laws or decrees or parts of acts, laws or decrees inconsistent with
properties foreclosed due to tax delinquency, thus:
the provisions of this Code are hereby repealed or modified
accordingly."chan robles virtual law library
"Sec. 78. Redemption of real property after sale. - Within the term of one
year from the date of the registration of the sale of the property, the
Consequently, petitioners maintain that Section 4 of R.A. No. 1597, being
delinquent taxpayer or his representative, or in his absence, any person
inconsistent with Section 78 of P.D. No. 464, was abrogated and repealed
holding a lien or claim over the property, shall have the right to redeem the
by the latter law, which took effect later on June 1, 1974.
same by paying the provincial or city treasurer or his deputy the total
amount of taxes and penalties due up to the date of redemption, the costs
of sale and the interest at the rate of twenty per centum on the purchase In our view, the issue in this case is which of the two laws should apply in
price, and such payment shall invalidate the sale certificate issued to the so far as the redemption period of the subject property is concerned? More
purchaser and shall entitle the person making the same to a certificate specifically, is Section 4 of R.A. No. 1597 already repealed by Section 78 of
from the provincial or city treasurer or his deputy, stating that he had P.D. No. 464, such that the latter provision governs the redemption period?
redeemed the property.
On one hand, we note that R.A. No. 1597 is a special law enacted
x x x" specifically to govern all incidents of the subdivision of the Tondo Foreshore
Land. On the other hand, P.D. No. 464 covers all real property titled to
individuals who become delinquents in paying real estate tax. P.D. 464 is a
Thus, according to petitioners, their repurchase of the property beyond the
law of general application. Its provisions have substantially been adopted
one-year redemption period under P.D. No. 464 was outside the ambit of a
by the Local Government Code of 1991, a general statute.[14] J.C. Vitug.
redemption of foreclosed property, hence, not for the benefit of all co-
COMPENDIUM OF TAX LAW AND JURISPRUDENCE 404 (3rd ed. 1993).chan
owners.chan robles virtual law library
robles virtual law library

In addition, petitioners assert that Section 4 of R.A. No. 1597 does not
Basic in statutory construction is the rule that the enactment of a later
apply to the present case because it refers to an alienation outside the
legislation which is a general law cannot be construed to have repealed a
purview of foreclosure due to tax delinquency. They aver that Section 4
special law unless expressly so stated. Well-settled in this jurisdiction is the
refers to a voluntary alienation, conveyance and encumbrance made in
doctrine that a "special statute, provided for a particular case or class of
favor of the government, its agencies and instrumentalities within 15 years
cases, is not repealed by a subsequent statute, general in its terms,
from the date the certificate of title was issued to the purchaser. These
provisions and applications, unless the intent to repeal or alter is manifest,
conveyances, they add, are subject to repurchase within five years from
although the terms of the general law are broad enough to include the
the date of conveyance. In contrast, they allege that the conveyance
cases embraced in the special law."[15] Laguna Lake Development
involved in this case is an involuntary conveyance, not covered by Section
Authority vs. Court of Appeals, 251 SCRA 42, 56 (1995).
4.

26
We find no such intent to expressly repeal R.A. No. 1597 in the provisions provides that the contract "shall be binding upon the heirs, executors,
of P.D. 464. Its repealing clause, Section 111, specifically mentions administrators, successors, and assigns of the respective parties
Commonwealth Act No. 470; the pertinent provisions of the charters of all thereof."[24] Rollo, p. 55. Even assuming for the sake of argument that
cities; Section 2092 of the Revised Administrative Code; and all acts, laws Section 4 should be deemed superseded, we have held that where a
or decrees or parts thereof inconsistent with P.D. 464, as having been contract is entered into by the parties on the basis of the law then
repealed or modified accordingly. However, it is settled that a declaration in obtaining, the repeal or amendment of said law will not affect the terms of
a statute, usually in its repealing clause, that a particular and specific law, the contract, nor impair the right of the parties thereunder.[25] Insular
identified by its number and title is repealed, is an express repeal; all other Government vs. Frank, 13 Phil. 236, 239 (1909); Aisporna vs. Court of
repeals are implied repeals.[16] Mecano vs. Commission on Audit, 216 Appeals, 108 SCRA 481, 494-495 (1981). This rule applies even if one of the
SCRA 500, 504 (1992). R.A. No. 1597 was not specifically mentioned in the contracting parties is the government.[26] Insular Government vs. Frank,
repealing clause, Section 111 of P.D. 464. 13 Phil. 236, 239 (1909).26 The stipulations in Paragraph 2 and Paragraph
5 being integral parts of the original contract between Arboleda and the
Land Tenure Administration, the five-year redemption period in Section 4,
Neither can Section 4, R.A. No. 1597 be considered to have been repealed
R.A. 1597 becomes all the more pertinent and decisive of the controversy
impliedly. Repeal of laws should be made clear and expressed.[17] Supra,
in the present case.
note 14. Repeals by implication are not favored as laws are presumed to be
passed with deliberation and full knowledge of all laws existing on the
subject.[18] City Government of San Pablo, Laguna vs. Reyes, 305 SCRA In the light of Section 4 of R.A. 1597, we hold that the respondent court
353, 360 (1999). Such repeals are not favored for a law cannot be deemed committed no reversible error when it affirmed the trial court’s judgment.
repealed unless it is clearly manifest that the legislature so intended it. Petitioners’ repurchase of the subject lot within the five-year redemption
[19] Intia, Jr. vs. Commission on Audit, 306 SCRA 593, 609 (1999). The period of Section 4 of R.A. No. 1597 is within the purview of a redemption
failure to add a specific repealing clause indicates that the intent was not to by a co-owner which inures to the benefit of all other co-owners of the
repeal any existing law, unless an irreconcilable inconsistency and property.
repugnancy exist in the terms of the new and old laws.[20] Id. at 608
(1999). We find no such inconsistency or repugnancy between Section 4 of
WHEREFORE, the petition is DENIED. The assailed decision of the Court of
R.A. 1597 and Section 78 of P.D. No. 464. The former law is of special and
Appeals dated October 13, 1995, and its resolution dated February 7, 1996
exclusive application to lots acquired from the Tondo Foreshore Land only.
in CA-G.R. CV No. 37751 are hereby AFFIRMED. Costs against
The latter is a law or decree of general application. We concur in the view
petitioners.chan robles virtual law library
of the trial court and the respondent court that R.A. No. 1597 has not been
repealed.[21]Rollo, p. 41.
SO ORDERED.
Petitioners insist that Section 4 of R.A. No. 1597 refers to voluntary
conveyances, while Section 78 of P.D. No. 464 refers to involuntary Bellosillo, J., (Chairman), Mendoza, Buena, and De Leon, Jr., JJ.,
conveyances. This distinction is of no moment. Concerning encumbrances concur.
and alienations therein mentioned, Section 4 makes no distinction between
voluntary and involuntary conveyances. There should also be no distinction
in the application of the law where none is indicated.[22] Lo Cham vs.
Ocampo, 77 Phil. 636, 638 (1946). Where the law does not distinguish,
courts should not distinguish. Ubi lex non distinguit nec nos distinguere
debemos.[23] Commissioner of Internal Revenue vs. COA, 218 SCRA 203,
214-215 (1993).chan robles virtual law library

The deed of sale between the then Land Tenure Administration and Macario
Arboleda contains provisions which preclude the application of Section 78,
P.D. 464. As raised by private respondents in their complaint before the
trial court, Paragraph 2 of the Deed of Sale contains the proviso of Section
4, R.A. 1597, that every conveyance of the lot "shall be subject to
repurchase by the original purchaser or his legal heirs within a period of
five years from the date of the conveyance." Paragraph 5 thereof also

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