Conflict of Laws Cases 1951-1960

(1) Saura Import and Export Co., Inc. v. Bibiano L. MeerGR No. L-2927 February 26, 1951

(2) Philippine Refining v. LedesmaGR No. L-2193 April 27, 1951

(3) In re: Testate Estate of the deceased Jose B. SuntayGR Nos. L-3087 and L-3088 July 31, 1954

(4) Pacific Micronisian Line v. Del RosarioGR No. L-7154 October 23, 1954

(5) King Mau Wu v. SycipGR No. L-5897 April 23, 1954

(6) Arca v. JavierGR No. L-6768 July 31, 1954

(7) De los Santos and Astraquillo v. RepublicGR No. L-4818 February 28, 1955

(8) Cayetano Liwanag v. Robert HamillGR No. L-7881 February 27, 1956

(9) Paul Mac Donald v. National City Bank of NYGR No. L-7991 May 21, 1956

(10) Cu Unjieng Sons v. Board of Tax AppealsGR No. L-6296 September 29, 1956

(11) Mamerto Corre v. Guadalupe CorreGR No. L-10128 November 13, 1956

(12) Lao Ichong et al. v. Jaime Hernandez101 il 1155 May 31, 1957

(13) Eastboard Navigation v. Juan Ysmael Co.102 Phil 1 September 10, 1957

(14) Ly Giok Ha et al. v. Galang101 Phil 459 May 17, 1957

(15) American Bible Society v. City of Manila101 Phil 386 April 30, 1957

(16) Claudina Vda de Villaruel v. Manila Motor104 Phil 926 December 13, 1958

(17) Roman Catholic Apostolic Administrator of Davao v. The Land Registration Commission102 Phil 596 December 20, 1957

(18) Lim Siok Huey v. Alfredo Lapiz103 Phil 930 May 28, 1958

(19) Lee Suan Ay et al. v. Galang106 Phil 707 December 23, 1959

(20) Ko Wai Me v. Galang106 Phil 661 November 28, 1959

(21) Testate Estate of C.O. Bohanan v. Bohanan et al., G.R. No. L-12105 January 30, 1960

(22) Benito Lim v. Herbert Brownwell 107 Phil 344 March 24, 1960

SAURA IMPORT AND EXPORT CO., INC., v. BIBIANO L. MEERG.R. No. L-2927 February 26, 1951

Doctrine: While on army bases of installations within Philippines, the goods purchased were, in contemplation of law, on foreign soil. The result was that when Saura, after acquiring title to such goods, brought them outside of those bases or depots, there was importation in the ordinary sense.

FACTS: This is an action to recover a tax paid in protest by Saura Import and Export Co. Inc.Saura Import and Export Inc bought from the Foreign Liquidation Commission, a United States Government agency, jeeps,

weapons carriers, and trucks, all of which, at the time of purchase, were located in different United States Army depots in the Philippines. Immediately thereafter, Saura had the purchases delivered to it which in turn sold it to third persons in the Philippines.Lower Court Ruling: Saura Import and Export Inc is an importer and levied on the motor vehicles purchased the percentage tax as prescribed in Sections 185 and 186 of Commonwealth Act No. 466.ISSUE:

1. Whether or not Saura is an importer.

RATIO: Yes, Saura is an importer. The sales it made to third persons were original sales taxable under the sections mentioned above.At time of Saura’s purchase, the United States Army in the Philippines was a belligerent occupant, at least of army bases,

army depots, and army installations it was using for the prosecution of the existing war. By section 280 of the Rules of Land Warfare, belligerent occupation (in this case by the United States Army) ceased only when "the occupant evacuated the district or was driven out by the enemy, or by levee en massee, and the legitimate government actually resumed its funtions."

By political relationship between the Philippines and between the United States and by reason of war, the United States Government on that date enjoyed jurisdictional rights over certain areas of the Philippine territory and over military goods brought here and intended for the United States Army. While on army bases of installations within Philippines those goods were, in contemplation of law, on foreign soil. The result was that when Saura, after acquiring title to such goods, brought them outside of those bases or depots, there was importation in the ordinary sense.

PHILIPPINE REFINING COMPANY, INC. v. CESAR LEDESMAGR. No. L-2913 April 27, 1951

Doctrine: Under the Haw Pia doctrine, a pre-war debtor who had paid his debt during the Japanese occupation with the authorized office/body of the occupant is released from all his liability to the former creditor.

FACTS: Philippine Refining Corporation is a domestic corporation operating as an oil manufacturer and refiner, with its capital stock being owned mostly by British and Dutch interests.

On February 15, 1939, the Philippine Refining Company sold to the defendant Cesar Ledesma, a Filipino citizen, three parcels of land in Paranaque, Rizal for the amount of P413,644. Ledesma delivered P103,411 in cash, and executed six promissory notes for the balance, each for the amount of P51,705.50, maturing successively on February 15 of the years 1940, 1941, 1942, 1943, 1944, and 1945. To secure payment of the notes, Ledesma mortgaged the three parcels of land. The first two promissory notes were paid. However, during the Japanese occupation, Ledesma satisfied the remaining four promissory notes to the Office of the Enemy Property Custodian of the Japanese Army, upon previous demand by the later. The payment was made in Japanese military notes. Consequently, the Japanese authorities caused the mortgage to be cancelled and this was duly noted in proper Registry of Deeds.Lower Court Ruling: The payment made by Ledesma is valid as per the Haw Pia doctrine which absolved a pre-war debtor of the China Banking Corporation who had paid his debt during the Japanese occupation with Japanese military notes to the Bank of Taiwan, that had been designated by the Japanese Military to liquidate the aforesaid bank, an enemy-owned institution established in occupied territory.

ISSUE: 1. Whether or not the payment is valid as the present controversy involved different facts from the Haw Pia controversy as

the the payment was not delivered to the Bank of Taiwan, or any other bank. – Yes.

RATIO: The payment made by Ledesma is valid. He is released from all his liability to his former creditor, the Philippine Refining Corporation.

The CFI is correct in relying in the Haw Pia doctrine. Upon the strength of this doctrine, the Court had also validated payments under similar circumstances in HSBC v Samanill

IN RE: TESTATE ESTATE OF THE DECEASED JOSE B. SUNTAY. SILVINO SUNTAY VS IN RE: INTESTATE ESTATEG.R. Nos. L-3087 and L-3088 July 31, 1954

Doctrine: Wills proved and allowed in a foreign country, according to the laws of such country, may be allowed, filed, and recorded by the proper Court of First Instance in the Philippines.

FACTS: Jose Suntay, a Filipino citizen and resident of the Philippines, died in the city of Amoy, Fookien province, Republic of China, leaving real and personal properties in the Philippines and a house in Amoy, Fookien province, China, and children by his first marriage with Manuela T. Cruz namely, Apolonio, Concepcion, Angel, Manuel, Federico, Ana, Aurora, Emiliano, and children with his second marriage to Maria Natividad Lim Billian namely Jose, Jr. and Silvino.

Intestate proceedings were instituted in the Court of First Instance of Bulacan. Apolonio Suntay was declared administrator. After his death, Federico C. Suntay was appointed administrator of the estate. Maria Natividad filed a petition in the Court of First Instance of Bulacan for the probate of a last will and testament claimed to have been executed and signed in the Philippines on November 1929 by the late Jose B. Suntay. This petition was denied because of the loss of said will and of the insufficiency of the evidence to establish the loss of the said will. An appeal was taken from said order denying the probate of the will and this Court held the evidence before the probate court sufficient to prove the loss of the will and remanded the case to the Court of First Instance of Bulacan for the further proceedings.

Silvino Suntay, claiming that he had found among the files, records and documents of his late father a will and testament in Chinese characters executed and signed by the deceased on 4 January 1931 and that the same was filed, recorded and probated in the Amoy district court, Province of Fookien, China, filed a petition in the intestate proceedings praying for the probate of the will executed in the Philippines or of the will executed in Amoy, Fookien, China.Witnesses were presented to prove the existence of the will allegedly left by Jose Suntay.

Lower Court Ruling: Dissallowed alleged will and testament executed in Manila on November 1929, and the alleged last will and testament executed in Kulangsu, Amoy, China, on 4 January 1931, by Jose B. Suntay.

ISSUE: 1. Whether or not the wills allegedly left by Jose SUntay can be probated.

RATIO: Upheld decision of the Court of First Instance. Granting that there was a will duly executed by Jose B. Suntay, and that it was in existence at the time of, and note revoked before his death, the testimonies of the witnesses presented fall falls short of the legal requirement that the provisions of the lost will must be "clearly and distinctly proved by at least two credible witnesses." Credible witnesses mean competent witnesses and those who testify to facts from or upon hearsay are neither competent nor credible witnesses.As to the will claimed to have been executed on 4 January 1931 in Amoy, China, the law on the point in Rule 78. Section 1 of the rule provides:

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

Section 2 provides:When a copy of such will and the allowance thereof, duly authenticated, is filed with a petition for allowance in the Philippines, by the executor or other person interested, in the court having jurisdiction, such court shall fix a time and place for the hearing, and cause notice thereof to be given as in case of an original will presented for allowance.

Section 3 provides:If it appears at the hearing that the will should be allowed in the Philippines, the court shall so allow it, and a certificate of its allowance, signed by the Judge, and attested by the seal of the courts, to which shall be attached a copy of the will, shall be filed and recorded by the clerk, and the will shall have the same effect as if originally proved and allowed in such court.

The fact that the municipal district court of Amoy, China, is a probate court must be proved. The law of China on procedure in the probate or allowance of wills must also be proved. The legal requirements for the execution of a valid will in China in 1931 should also be established by competent evidence. However, there was no evidence presented to prove this point. The unverified answers to the questions propounded by counsel for the appellant to the Consul General of the Republic of China, objected to by counsel for the appellee, are inadmissible, because apart from the fact that the office of Consul General does not qualify and make the person who holds it an expert on the Chinese law on procedure in probate matters, if the same be admitted, the adverse party would be deprived of his right to confront and cross-examine the witness. Consuls are appointed to attend to trade matters. Moreover, it appears that all the proceedings had in the municipal district court of Amoy were for the purpose of taking the testimony of two attesting witnesses to the will and that the order of the municipal district court of Amoy does not purport to probate the will. In the absence of proof that the municipal district court of Amoy is a probate court and on the Chinese law of procedure in probate

matters, it may be presumed that the proceedings in the matter of probating or allowing a will in the Chinese courts are the a deposition or to a perpetuation of testimony, and even if it were so it does not measure same as those provided for in our laws on the subject. It is a proceeding in rem and for the validity of such proceedings personal notice or by publication or both to all interested parties must be made. The interested parties in the case were known to reside in the Philippines. The evidence shows that no such notice was received by the interested parties residing in the Philippines

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

PACIFIC MICRONISIAN LINE, INC. v. DEL ROSARIOG.R. No. L-7154 October 23, 1954

Doctrine: In order that services may be effected upon private corporations, it is required that the foreign corporation be one which is doing business in the Philippines. This is a sine qua non requirement. This fact must be first established in order that summons can be made and jurisdiction acquired.

FACTS: Alfonsa Pelingon filed a claim for compensation for herself and her two minor children with the Workmen's Compensation Commission against the Luzon Stevedoring Co., Inc., who refused to entertain the claim on the ground that said company was not the employer of the deceased husband of the claimant. The Workmen's Compensation Commission, believing that the Pacific Far East Line, Inc., a foreign corporation licensed to do business in the Philippines, was an agent of petitioner with authority to receive service of process, served notice of the claim on an official of said foreign corporation who in turn forwarded the notice to petitioner even if the latter was not an agent of, nor was it authorized to accept service of process in behalf of, said petitioner. Pacific filed a special appearance with the Workmen's Compensation Commission for the sole purpose of asking for the dismissal of the claim on the ground that the Commission had no jurisdiction over it because it is a foreign corporation not domiciled in this country, it is not licensed to engage and is not engaging in business therein, has no office in the Philippines, and is not represented by any agent authorized to receive summons or any other judicial process in its name and behalf.

Lower Court Ruling: The Workmen's Compensation Commission has jurisdiction over the petitioner. Hence, the case can be tried on its merits.

ISSUE: 1. Whether or not, petitioner, as a private foreign corporation not doing business in the Philippines, can be brought within the

jurisdiction of our courts by serving the summons upon the agent who represented it in entering into the contract of employment with the deceased husband.

RATIO: The pertinent rule to be considered is section 14, Rule 7, of the Rules of Court, which refers to service upon private foreign corporations. This section provides:

SEC. 14. Service upon private foreign corporations. — If the defendant is a foreign corporation, or a non-resident joint stock company or association, doing business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the Philippines.

The above section provides for three modes of effecting services upon a private corporation, namely: (1) by serving upon the agent designated in accordance with law to accept service of summons; (2) if there be no special agent, by serving on the government official designated by law to that effect; and (3) by serving on any officer or agent within the Philippines. But, it should be noted, in order that services may be effected in the manner above stated, said section also requires that the foreign corporation be one which is doing business in the Philippines. This is a sine qua non requirement. This fact must be first established in order that summons can be made and jurisdiction acquired. This is not only clear in the rule but is reflected in a recent decision of this Court. We there said that "as long as foreign private corporation does or engages in business in this jurisdiction, it should and will be amenable to process and the jurisdiction of the local courts."

Petitioner is a corporation exclusively engaged in the business of carrying goods and passengers by sea between the territory of Guam and the Trust Territories of the Pacific Islands and for that purpose it was operating a fleet of vessels plying between those ports or territories. Petitioner has no property or office in the Philippines, nor is it licensed to do business in the

Philippines. And the only act it did here was to secure the services of Luceno Pelingon to act as cook and chief steward in one of its vessels authorizing to that effect the Luzon Stevedoring Co., Inc. a domestic corporation. Petitioner engaged the services of Pelingon not as part of the operation of its business but merely to employ him as member of the crew in one of its ships. That act apparently is an isolated one, incidental, or casual, and "not of a character to indicate a purpose to engage in business" within the meaning of the rule. The Commission has no jurisdiction over the petitioner and, therefore, the present proceedings cannot continue and should be dismissed.

KING MAU WU v. FRANCISCO SYCIPGR No. L-5897 April 23, 1954

Doctrine: A non-resident may sue a resident in the courts of this country where the defendant may be summoned and his property leviable upon execution in the case of a favorable, final, and executory judgment.

FACTS: This is an action to collect filed by King Maw Wu against Francisco Sycip for the amount of P59,082.92, together with lawful interests from 14 October 1947, the date of the written demand for payment, and costs.

King Mau Wuu, agent of Francisco Sycip, sold and delivered 1,000 tons of coconut oil emulsion to Jas Maxwell Fasset. Fasset in turn assigned it to Fortrade Corporation. Under an agency agreement executed in New York, which was addresse and accepted by Francisco Sycip on November 22, 1945, King Mau Wu was made the exclusive agent of Sycip in the sale of coconut oil and its derivaties outside the Philippines and was to be paid 2 ½ percent on the actual sale price of sales obtained thru his efforts, in addition to 50 percent of the difference between the authorized sale price and the actual sale price.

King Mau Wu claims that for the sale to Fasset, he is entitled under the agency contract to a commission of 2 ½ percent on the total actual sale price of 1,000 tons of coconut oil emulsion and 50 per cent of the difference between the authorized sale price of $350 per ton and the actual selling price of $400 per ton. As Sycip already made previous payments, King Mau Wu is just collecting on balance payments due to him.

Sycip, on the other hand, contends that the sales transaction was not covered by the agency contract dated November 22 as the sales was agreed upon on October 16 and that it was an independent and separate transaction for which King Mau Wu had been duly compensated.

Lower Court Ruling: Rendered judgment in favor of King Mau Wu and denied both the motion for reconsideration and new trial filed by Sycip. Sycip filed an appeal, contending that the Court of First Instance of Manila has no jurisdiction over the case as the agency contract was executed in New York.

ISSUE: Whether or not the Court of First Instance of Manila has jurisdiction.

RATIO: CFI has jurisdiction. A non-resident may sue a resident in the courts of this country where the defendant may be summoned and his property leviable upon execution in the case of a favorable, final, and executory judgment. It is a personal action for the collection of a sum of money which the Courts of First Instance have jurisdiction to try and decide. There is no conflict of laws involved in the case, because it is only a question of enforcing an obligation created by or arising from contract; and unless the enforcement of the contract be against public policy of the forum, it must be enforced.

The plaintiff is entitled to collect P7,589.88 for commission and P50,000 for one-half of the overprice, or a total of P57,589.88, lawful interests thereon from the date of the filing of the complaint, and costs in both instances.

SALUD R. ARCA and ALFREDO JAVIER JR., v. ALFREDO JAVIER,G.R. No. L-6768 July 31, 1954

Doctrine: One of the essential conditions for the validity of a decree of divorce is that the court must have jurisdiction over the subject matter and in order that this may be acquired, plaintiff must be domiciled in good faith in the State in which it is granted

FACTS: Alfredo Javier (Alfredo) was a native born citizen of the Philippines who, in 1937, married Salud R. Arca (Salud), another Filipino citizen. Before their marriage they had already a child, Alfredo Javier, Jr., who thereby became legitimated. In 1927 appellant enlisted in the U.S. Navy and in 1938 sailed for the United States aboard a navy ship in connection with his service leaving behind his wife and child, and on August 13, 1940, he filed an action for divorce in the Circuit Court of Mobile County, Alabama, U.S.A., alleging as ground abandonment by his wife. Having received a copy of the complaint, Salud filed an answer alleging, among other things, that appellant was not a resident of Mobile County, but of Naic, Cavite, Philippines, and that it was not true that the cause of their separation was abandonment on her part but that appellant was in the United States, without her, because he was then enlisted in

the U.S. Navy. Nevertheless, the Circuit Court of Mobile County rendered judgment granting appellant a decree of divorce on April 9, 1941. After securing a divorce Alfredo married Thelma Francis, an American citizen. The latter, however, obtained a divorce from him for reasons not disclosed by the evidence. Alfredo Javier returned to the Philippines armed with two decrees of divorce — one against his first wife Salud R. Arca and the other against him by his second wife Thelma Francis. When returned to the Philippines and married Maria Odvina of Naic, Cavite. At the instance of plaintiff Salud R. Arca an information for bigamy was filed by the City Fiscal of Manila on July 25, 1950 against defendant Alfredo Javier.

Lower Court Ruling: Alfredo was acquitted of the charge of Bigamy predicated on the proposition that the marriage of defendant Alfredo Javier with the Maria Odvina was made in all good faith and in the honest belief.

ISSUES: 1. Does this decree have a valid effect in this jurisdiction? – NO2. Whether Alfredo is guilty of bigamy – YES

RATIO: This court has had already occasion to pass upon questions of similar nature in a number of cases and its ruling has invariably been to deny validity to the decree. In essence, it was held that one of the essential conditions for the validity of a decree of divorce is that the court must have jurisdiction over the subject matter and in order that this may be acquired, plaintiff must be domiciled in good faith in the State in which it is granted (Cousins Hix vs. Fluemer, 55 Phil., 851, 856).

It is true that Salud R. Arca filed an answer in the divorce case instituted at the Mobile County in view of the summons served upon her in this jurisdiction, but this action cannot be interpreted as placing her under the jurisdiction of the court because its only purpose was to impugn the claim of appellant that his domicile or legal residence at that time was Mobile County, and to show that the ground of desertion imputed to her was baseless and false. Such answer should be considered as a special appearance the purpose of which is to impugn the jurisdiction of the court over the case.

In deciding the Canson case, this court did not overlook the other cases previously decided on the matter, but precisely took good note of them. Among the cases invoked are Ramirez vs. Gmur, 42 Phil. 855; Cousins Hix vs. Fluemer, 55 Phil., 851, and Barretto Gonzales vs. Gonzales, 58 Phil., 67.

In the cases just mentioned, this court laid down the following doctrines:

It is established by the great weight of authority that the court of a country in which neither of the spouses is domiciled and to which one or both of them may resort merely for the purpose of obtaining a divorce has no jurisdiction to determine their matrimonial status; and a divorce granted by such a court is not entitled to recognition elsewhere. ( See Note to Succession of Benton, 59 L. R. A., 143) The voluntary appearance of the defendant before such a tribunal does not invest the court with jurisdiction. (Andrews vs. Andrews, 188 U. S., 14; 47 L. ed., 366.)

It follows that, to give a court jurisdiction on the ground of the plaintiff's residence in the State or country of the judicial forum, his residence must be bona fide. (14 Cyc. 817, 181.)" (Ramirez vs. Gmur, 82 Phil., 855.)

But even if his residence had been taken up is good faith, and the court had acquired jurisdiction to take cognizance of the divorce suit, the decree issued in his favor is not binding upon the appellant; for the matrimonial domicile of the spouses being the City of Manila, and no new domicile having been acquired in West Virginia, the summons made by publication, she not having entered an appearance in the case, either personally or by counsel, did not confer jurisdiction upon said court over her person. (Cousins Hix vs. Fluemer, 55 Phil., 851.)

At all times the matrimonial domicile of this couple has been within the Philippine Islands and the residence acquired in the State of Nevada by the husband for the purpose of securing a divorce was not a bona fide residence and did not confer jurisdiction upon the court of the State to dissolve the bonds of matrimony in which he had entered in 1919. (Barretto Gonzales vs. Gonzales, 58 Phil., 67.)

In the light of the foregoing authorities, it cannot therefore be said that the Mobile County Court of Alabama had acquired jurisdiction over the case for the simple reason that at the time it was filed appellant's legal residence was then in the Philippines. He could not have acquired legal residence or domicile at Mobile County because at that time he was still in the service of the U.S. Navy and merely rented a room where he used to stay during his occasional shore leave for shift duty. That he never intended to live there permanently is shown by the fact that after his marriage to Thelma Francis in 1941, he moved to New York and after his divorce from Thelma in 1949 and his retirement from the U.S. Navy, he returned to the Philippines and married Maria Odvina of Naic, Cavite, where he lived ever since. It may therefore be said that appellant went to Mobile County, not with the intention of permanently residing there, or of considering that place as his permanent abode, but for the sole purpose of obtaining divorce from his wife. Such residence is not sufficient to confer jurisdiction on the court.

APOLINARIO G. DE LOS SANTOS and ISABELO ASTRAQUILLO, v. J. HOWARD MCGRATH ATTORNEY GENERAL OF THE UNITED

STATES, SUCCESSOR TO THE PHILIPPINE ALIEN PROPERTY ADMINISTRATION OF THE UNITED STATES, REPUBLIC OF THE PHILIPPINES,

G.R. No. L-4818 February 28, 1955

Doctrine: The failure of the Philippine government to incorporate its provisions in our statute books, for a period of almost 45 years, is, to our mind, clear proof of the unwillingness of our department to change the policy set forth in section 35 of Act No. 1459.

FACTS: This action involves the title to 1,600,000 shares of stock of the Lepanto Consolidated Mining Co., Inc. Plaintiffs contend that De los Santos bought 55,000 shares from Juan Campos, in Manila, early in December, 1942; that he bought 300,000 shares from Carl Hess; and that, before Christmas of 1942, he bought 800,000 shares from Carl Hess, this time for the account and benefit of Astraquillo. By virtue of vesting P-12, dated February 18, 1945, title to the 1,600,000 shares of stock in dispute was, however, vested in the Alien Property Custodian of the U. S. (hereinafter referred to as the Property Custodian) as Japanese property. Hence, plaintiffs filed their respective claims with the Property Custodian. In due course, the Vested Property Claims Committee of the Philippine Alien Property Administration made a "determination," dated March 9, 1948, allowing said claims, which were considered and heard jointly as Claim No. 535, but, upon personal review, the Philippine Alien Property Administration made by said Committee and decreed that "title to the shares in question shall remain in the name of the Philippine Alien Property Administrator." Consequently, plaintiffs instituted the present action to establish title to the aforementioned shares of stock and pray that judgment be rendered declaring them lawful owners of said shares of stock, with such dividends, profits and rights as may have accrued thereto; requiring the defendant to render accounts and to transfer said shares of stock to plaintiffs' names; and sentencing the former to pay the costs.

The defendant herein, Attorney General of the U. S., successor to the "Administrator", contends that prior to the outbreak of the war in the Pacific, said shares of stock were bought by Vicente Madrigal, in trust for, and for the benefit of, the Mitsui Bussan Kaisha (hereinafter referred to as the "Mitsuis"), a corporation organized in accordance with the laws of Japan, the true owner thereof, with branch office in the Philippines; that on or before March, 1942, Madrigal delivered the corresponding stock certificates, with his blank indorsement thereon, to the Mitsuis, which kept said certificates, in the files of its office in Manila, until the liberation of the latter by the American forces early in 1945; that the Mitsuis had never sold, or otherwise disposed of, said shares of stock; and that the stock certificates aforementioned must have been stolen or looted, therefore, during the emergency resulting from said liberation.

Lower Court Ruling: Judgment was rendered in favor of the plaintiffs

ISSUE: 1. Whether plaintiffs had purchased the shares of stock in question.- NO

RATIO: It appears from the evidence presented that the only evidence on the alleged sale of the shares of stock in question to the plaintiffs — the main issue in the case at bar — is the testimony of Apolinario de los Santos, who now claims to be the sole owner thereof.

Thus, the issue is based, and must stand or fall, therefore, upon the uncorroborated testimony of plaintiff Apolinario de los Santos, and the credence and weight that may be given thereto. Upon a review of the record, we find, however, that said testimony is highly improbable and inherently weak.

The status of quasi-negotiability generally accorded to, and at present enjoyed by, certificates of stock, under the Philippine law, is in itself a recognition of the fact that the certificates are non-negotiable. Instead of sustaining appellees' claim, section 5 of the uniform Stock Transfer Act, which "gives full negotiability to certificates of stock," refutes said claim and confirms the non-negotiable character of stock certificates in the absence of said Unifrom Act , for, obviously, the same could not have given, negotiability to an instrument already possessing this attribute prior thereto. Again, apart from being distinct from the general Corporation Law, the aforementioned Uniform Act is not in force in the Philippines. In this connection, it should be noted that this special piece of legislation was adopted in some states of the union as early as the year 1910. The failure of the Philippine government to incorporate its provisions in our statute books, for a period of almost 45 years, is, to our mind, clear proof of the unwillingness of our department to change the policy set forth in section 35 of Act No. 1459. Needless to say, this fact negates our authority — which is limited to the interpretation of the law, and its application, with all its imperfections — to abandon what the dissenting opinion characterizes as the "civil law standpoint," and substitute, in lieu thereof, the commercial viewpoint, by applying said section 5 of the Uniform Stock Transfer Act, although not a part of the law of the land. Indeed, even in matters generally considered as falling within "commercial territory", the Roman Law concept has not given way in the Philippines to the Common Law approach, except when there is explicit statutory provision to the contrary.

CAYETANO B. LIWANAG, v. ROBERT S. HAMILL, ET AL.

G.R. No. L-7881. February 27, 1956

Doctrine: Laws of the Philippines continue to be in force in said bases except when otherwise agreed upon in an agreement.

FACTS: Robert S. Hamill, Major, USAF, Assistant Base Provost Marshal, Clark Air Force Base, province of Pampanga, filed an amended complaint against Liwanag for violation of section 174 of the Internal Revenue Code. It is alleged in the amended complaint that Liwanag, “a private individual, without authority whatsoever, and without paying the corresponding specific tax of TWO PESOS (P2) per cartoon, did then and there willfully, unlawfully and feloniously, possess and have in his control seventeen cartoons of imported free of tax American cigarettes for use only of the US Military and Naval Forces stationed in the Philippines.” The complaint was subscribed and sworn to before Judge Lorenzo D. Licup. Counsel for Liwanag moved to quash the complaint in the Justice of the Peace Court, but this was denied. Thereupon Liwanag filed a petition for prohibition with the Court of First Instance, alleging that Robert S. Hamill has no personal capacity to subscribe to the complaint and the Justice of the Peace court, therefore, acquired no jurisdiction to conduct the preliminary investigation.

Lower Court Ruling: Robert S. Hamill is not a peace officer of the Republic of the Philippines and, therefore, is not authorized to file a complaint in accordance with section 2, Rule 106 of the Rules of Court.

ISSUE: 1. Whether a Provost Marshal of Clark Field is a peace officer of the Republic of the Philippines who is authorized to file a

complaint for violation of the Internal Revenue Code. – YES.

RATIO: It is admitted that the Provost Marshal of Clark Field is a peace officer. Provost Marshals in Army bases are police officers, and they have the powers and duties of chiefs of police in municipalities.

Under the agreement between the Republic of the Philippines and the United States of America, for the establishment of bases by the latter within the territory of the former, laws of the Philippines continue to be in force in said bases except when otherwise agreed upon in the agreement. And for the purpose of hearing cases therein, justices of the peace are appointed and hold office. They are not appointed by the United Stated of America, but by the President of the Philippines, subject to confirmation by the Commission on Appointments. But other than justices of the peace, no other officers of the Republic of the Philippines are appointed in the bases, much less peace officers, although agents of the Republic of the Philippines may have access in the bases to see that the laws of the Philippines are enforced.

But the question of peace and order within the bases is left to peace officers of the United States of America, the chief of whom is the provost marshal. To allow peace officers of said Republic to go therein and make arrests or institute prosecutions for violation of Philippine laws would certainly give occasion for conflicts of authority. So no provision is made for the appointment of peace officers of the Republic of the Philippines within the bases, and it is understood that the enforcement of Philippines laws is left to the officers of the United States of America.

It is illogical to deny to these peace officers (of the United States) the power to prosecute violations of Philippine laws in the military bases. Since these bases were established the Republic of the Philippines has abstained from appointing peace officers of its own; this must have been with the understanding that the execution of Philippine laws would be taken care of therein by the peace officers of the United States of America. The absence of peace officers of the Republic of the Philippines in these bases is due to the fact that the enforcement and prosecution of offenses against Philippine laws was intended to be lodged with the peace officers of the United States of America.

PAUL MACDONALD, ET AL., v. NATIONAL CITY BANK OF NEW YORKG.R. No. L-7991 May 21, 1956

Doctrine: While an unregistered commercial partnership has no juridical personality, nevertheless, where two or more persons attempt to create a partnership failing to comply with all the legal formalities, the law considers them as partners and the association is a partnership in so far as it is a favorable to third persons, by reason of the equitable principle of estoppel.

FACTS: Prior to June 3, 1949, Defendant Stasikinocey had an overdraft account with The National City Bank of New York, a foreign banking association duly licensed to do business in the Philippines. On June 3, 1949, the overdraft showed a balance of P6,134.92 against Stasikinocey or the Cardinal Rattan, which account, due to the failure of the partnership to make the required payment, was converted into an ordinary loan for which the corresponding promissory ‘joint note non-negotiable’ was executed by Louis F. da Costa for and in the name of the Cardinal Rattan, Louis F. da Costa and Alan Gorcey. This was secured on June 7, 1949, by a chattel mortgage executed by Louis F. da Costa, Jr., General Partner for and in the name of Stasikinocey, alleged to be a duly registered Philippine partnership, doing business under the name and style of Cardinal Rattan.

The mortgage deed was fully registered by the mortgagee on June 11, 1949, in the Office of the Register of Deeds for the province of Rizal, at Pasig and among other provisions it contained the following: (a) That the mortgagor shall not sell or otherwise

dispose of the said chattels without the mortgagee’s written consent; and (b) That the mortgagee may foreclose the mortgage at any time, after breach of any condition thereof, the mortgagor waiving the 30- day notice of foreclosure.

The National City Bank of New York, Respondent herein learned that the partnership Stasikinocey transferred to William Shaeffer, from the latter to Paul McDonald, and from Paul McDonald to Benjamin Gonzales, of the vehicles previously pledged by Stasikinocey to the Respondent. Thus Respondent filed an action against Stasikinocey and its alleged partners Gorcey and Da Costa, as well as Paul McDonald and Benjamin Gonzales, to recover its credit and to foreclose the corresponding chattel mortgage. McDonald and Gonzales were made Defendants because they claimed to have a better right over the pledged vehicle.

Lower Court Ruling: Judgment in favor of the Respondent, annulling the sale of the vehicles in question to Benjamin Gonzales; sentencing Da Costa and Gorcey to pay to the Respondent jointly and severally the sum of P6,134.92, with legal interest from the debt of the promissory note involved; sentencing the Petitioner Gonzales to deliver the vehicles in question to the Respondent for sale at public auction if Da Costa and Gorcey should fail to pay the money judgment; and sentencing Da Costa, Gorcey and Shaeffers to pay to the Respondent jointly and severally any deficiency that may remain unpaid should the proceeds of the sale not be sufficient; and sentencing Gorcey, Da Costa, McDonald and Shaeffer to pay the costs.

Appellate Court Ruling: The decision appealed from is affirmed but modified as to Appellant William Shaeffer in the obligation of paying, jointly and severally, together with Alan W. Gorcey and Louis F. da Costa, Jr., any deficiency that may remain unpaid after applying the proceeds of the sale of the said motor vehicles which shall be undertaken upon the lapse of 90 days from the date this decision becomes final, if by then Defendants Louis F. da Costa, Jr., and Alan W. Gorcey had not paid the amount of the judgment debt.

ISSUE: 1. Whether an unregistered commercial co-partnership which has no independent juridical personality can have a ‘domicile so

that a chattel mortgage registered in that ‘domicile’ would bind third persons who are innocent purchasers for value –YES

RATIO: While an unregistered commercial partnership has no juridical personality, nevertheless, where two or more persons attempt to create a partnership failing to comply with all the legal formalities, the law considers them as partners and the association is a partnership in so far as it is a favorable to third persons, by reason of the equitable principle of estoppel. In Hung-Man Yoc vs. Kieng-Chiong-Seng, 6 Phil., 498, it was held that although “it has no legal standing, it is a partnership de facto and the general provisions of the Code applicable to all partnerships apply to it.”

CU UNJIENG SONS V. BOARD OF TAX APPEALSG.R. No. L-6296 September 29, 1956

Doctrine: Commonwealth Act No. 466 (National Internal Revenue Code) does not authorize deductions for war losses which were compensated by the War Damage Commission since such compensation does not fall within the purview of “compensation by insurance or otherwise,” as the U.S. Government was not under any legal obligation to do so, until U.S. Congress passed the Philippine Rehabilitation Act of 1946 (Public Law 370).

FACTS: Cu Unjieng Sons (CUS) is a domestic corporation. More than 70% of its capital stock is owned by Filipino citizens. On February 1948, CUS filed with the Philippine War Damage Commission (Commission) a claim for compensation in

accordance with the Philippine Rehabilitation Act of 1945. The P1,079,388.05 claim is based on alleged losses sustained during the battle of liberation of Manila and other parts of the Philippines. Of the sum claimed, only P671,770.19 was approved by the Commission and P470,239.19 will be paid.

On June 15, 1950, CSU received a U.S. Treasury Warrant for P202, 531.06 as partial payment of the approved claim. Another Treasury Warrant for P151,14.31 was transmitted on November 8, 1950. Together with the second check, CUS was notified that it would be the last payment to be made by the Commission covering CUS’s claim unless the U.S. Congress makes further appropriation therefore.

In its income tax returns for the years 1945-1950, CUS did not pay income tax for the years 1945-1946 and it deducted war losses in the years 1945-1947. However, the Commissioner on Internal Revenue (CIR) disallowed deductions for war losses claimed by CUS for the years 1946 and 1947 on the ground that all war losses sustained by CUS should have been claimed as a deduction for the year 1945 when the said losses were actually sustained, pursuant to the National Internal Revenue Code (NIRC). CUS maintains that the said losses were compensated by “insurance or otherwise,” and that since notice was given by the Commission in 1950, it follows that the losses in question were not chargeable as deductions in the year 1945.

Commissioner of Internal Revenue Ruling: The losses were not compensated for by insurance or otherwise, and that, accordingly, the corresponding deduction was permissible in 1945 only.

Board of Tax Appeals Ruling: Affirmed CIR Ruling.

ISSUE: 1. Whether the losses suffered by CUS in 1945 were deductible, for income tax purposes, in 1945, when the losses were

physically sustained, or in 1950, when CUS was advised by the Commission that no payments, other than those made by the Commission in June and November 1950, would be made for said losses.

RATIO: The determination of this question hinges on the interpretation and construction of Sec. 30 of the NIRC, as implemented by Revenue Regulation No. 2. According to the law, the losses in question could only be charged off in the income tax return for the year 1945, unless compensated for by “insurance or otherwise.”

With regard to the question on whether the losses aforementioned were “compensated for by insurance” in 1945, CUS relies upon Section 5(g) of an Act of Congress of the United States of March 27, 1942 (Public Law 506). The provision authorizes the Reconstruction Finance Corporation to empower the War Damage Corporation “to use its fund to provide, through insurance, reinsurance or otherwise, reasonable protection against loss of, or damage to, property which may result from enemy attack” and that “such protection shall be made available upon payment of such premium or other charge as the Commission may establish.” In order to come under said provision, there must be (1) “insurance, reinsurance, or otherwise” and (2) “payment of such premium or other charge as the War Damage Corporation may establish.” Neither requirement is present in the case at bar. Hence, CUS is not entitled to the benefits of the Public Law 506.

CUS insists that its property were, in effect, covered by a “special statutory insurance,” regardless of any legislation thereon, because: (1) on Dec. 13, 1941, the Federal Loan Agency of the U.S. announced that the Rehabilitation Finance Corporation had created the War Damage Corporation to provide protection against losses resulting from enemy attack which might be sustained by owners of property in continental U.S.; (2) on Dec. 23, 1941, said Agency further announced that the War Insurance Corporation would extend the same protection to property owners in the Philippines; these announcements were published in the Manila Day Bulletin and were subsequently confirmed in radio broadcasts of the “Voice of America”; (4) Jesse Jones, the Federal Loan Administrator of the U.S. declared that said announcement was intended as insurance policy; and, (5) compliance therewith, according to Senator Tydings, was a “legal obligation” on the part of the U.S. CUS admits that losses sustained later than July 1, 1942, does not cover losses or property damage which may result from enemy attack (including any action taken by military, naval, or air forces of the U.S. in resisting enemy attack).

CUS suffered its aforementioned losses in 1945, during the battle for the liberation of the Philippines by the Allied, especially American Forces. Those losses were not the result of enemy attack, or of action by the armed forced of the U.S. in resisting enemy attack. The main enemy was Japan, and neither Japan nor any of its associates, was attacking in the Philippines. It is clear therefore that the losses of CUS do not come within the purview either of Public Law 506 or of the announcements abovementioned, and are not compensated for by “insurance,” as the term is used in the NIRC.

Whether the said losses could not be deducted in 1945, because they were “compensated for by insurance or otherwise,” CUS invokes the Philippine Rehabilitation Act of 1946 (Public Law 370). The law was approved, and became effective, on April 30, 1946. In order to be entitled to defer deductions for losses materially sustained within a given year, the right to compensation therefor, “by way of insurance or otherwise,” if any, must exists, prior to the end of said year. Consequently, the approval of the Philippine Rehabilitation Act of 1946 did not constitute in 1945 ‘a compensation’ “by way or insurance” and did not authorize CUS herein to postpone, to another year, its claim for deduction arising from the war losses in question.

It is also claimed that the acts and declarations of responsible officials and organs of the U.S. Government before the end of 1945 were such as to constitute “conclusive assurance that property owners had reasonable expectation that their war losses would be compensated for.” Allegedly, this “reasonable expectation” sufficed to place the losses of CUS, during 1945, within the purview of the phrase “compensated for … otherwise” than by insurance under the NIRC. The contention is untenable. “Otherwise” in the clause “compensated for by insurance or otherwise” should be construed to refer to compensation due under a title analogous or similar to insurance. Inasmuch as the latter is a contract establishing a legal obligation, it follows that in order to be deemed “compensation for … otherwise,” the losses sustained by the taxpayer must be covered by a judicially enforceable right, springing from any of the juridical sources of obligation: law, contract, quasi-contract, torts, or crime.

It is not contended that indemnity was due to CUS by reason of tort, crime, or quasi-contract. Upon the other hand, CUS, in 1945, no right to indemnity springing from law, for the Philippine Rehabilitation Act was not approved until April 1946. The press releases and announcements were merely expressions of a policy of the Executive Department of the U.S. They did not imply any intent to invest, in the owners of property damages or destroyed in the Philippines during the war, a legal right to demand indemnity from the U.S. Moreover, the payment of indemnity by the U.S. necessarily required an appropriation of public funds which could be made only by an act of Congress of the U.S., and, as regards war losses or damages sustained in the Philippines “later than July 1, 1942,” no such appropriation law existed at the close of 1945 or before. The theory that the announcements resulted in an implied contract is clearly devoid of merit.

Moreover, the Government of the U.S. was under no legal obligation to pay indemnity for losses caused by the enemy in the Philippines. Neither was it liable for damages caused by the American forces during its war operations therein, in conformity with the laws and customs of war. Consequently, the indemnity provided for in the Philippine Rehabilitation Act of 1945 was purely an obligation voluntarily assumed solely for moral considerations, and did not exist as a legal obligation prior to the approval of said Act on April 30, 1946.

MAMERTO CORRE V. GUADALUPE CORREG.R. No. L-10128 October 13, 1956

Doctrine: The term “residence” as used in the rules of court is synonymous with “domicile.” Thus, merely sojourning in a certain area or temporary residence cannot serve as basis for the purpose of determining the venue in civil cases.

FACTS: Mamero Corre, plaintiff, is a 44 year old American citizen and a resident of Las Vegas, U.S. He is a master sergeant in the U.S. Army. Guadalupe, defendant, is 40 years old and a resident of Samar, Philippines.

Mamero brought an action in the Court of First Instance of Manila seeking his legal separation from Guadalupe, his wife, and the placing of their minor children under the care and custody of a reputable women’s dormitory or institution as the court may recommend. Guadalupe moved to dismiss the complaint on the ground that the venue is improperly laid. She claims that since it appears in the complaint that neither Mamero nor Guadalupe is a resident of the City of Manila in the court where the action was filed is not the proper court to take cognizance of the case.

Lower Court Ruling: The court dismissed the complaint without pronouncements as to costs.

Appellate Court Ruling: Not applicable.

ISSUE: 1. Whether the lower court erred in dismissing the complaint.

RATIO: CFI affirmed. For purposes of filing civil actions, the Rules of Court provide that the plaintiff can elect to file the action in court he may choose if both the plaintiff and defendant have their residence in the Philippines. Otherwise, the action can only be brought in the place were either one resides. In the present case, complainant/plaintiff Mamero is a resident of Las Vegas, U.S. while defendant Guadalupe is a resident of Catbalogan, Samar. Such being the case, Mamero has no choice other than to file the action in the court of first instance of Guadalupe’s province.

The allegation of Mamero “for purposes of filing and maintaining this suit, temporarily resides at Santa Mesa, Manila” cannot serve as basis for the purpose of determining the venue for that is not the residence contemplated by the rule. Otherwise, it would create a situation where a person may have his residence in one province and, to suit his convenience, or to harass the defendant, may bring the action in the court of any other province.

Residence, as used in said rule, is synonymous with domicile. This is defined as “the permanent home, the place to which, whenever absent for business or pleasure, one intends to return, and depends on facts and circumstances, in the sense that they disclose intent.”

LAO ICHONG ET AL. V. JAIME HERNANDEZ101 Phil 1155 (05/31/57)

Doctrine: A law distinguishing aliens from residents does not violate the equal protection clause of the Constitution because sufficient grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated. It also does not violate the due process of law clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and reasonably protects their privilege.

FACTS: Republic Act No. 1180 (“An Act to Regulate the Retail Business”) was passed to effectively nationalize the retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and against associations, partnerships, or corporations the capital of which are not wholly owned by citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance with the law, until their death or voluntary retirement in case of natural persons, and for ten years after the approval of the Act or until the expiration of term in case of juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States; (4) a provision for the forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, control weights and measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition against the establishment or opening by aliens actually engaged in the retail business of additional stores or branches of retail business, (6) a

provision requiring aliens actually engaged in the retail business to present for registration with the proper authorities a verified statement concerning their businesses, giving, among other matters, the nature of the business, their assets and liabilities and their offices and principal offices of judicial entities; and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to continue such business for a period of six months for purposes of liquidation.

Petitioner, for and in his own behalf and on behalf of other alien residents, corporations, and partnerships adversely affected by the provisions of R.A. No. 1180, brought this action to obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him, particularly city and municipal treasurers, from enforcing its provisions. Among other things, petitioner contends that the Act denies to alien residents the equal protection of the laws and deprives of their liberty and property without due process of law and violates international and treaty obligations of the Philippines.

Lower Court Ruling: Not applicable.

Appellate Court Ruling: Not applicable.

ISSUE: 1. Whether or not the law is unconstitutional.

RATIO: The law is constitutional. 1. Equal Protection Clause: The main point for determination is whether alienage is the root and cause of the distinction between the alien and the national as a trader. The alien resident owes allegiance to the country of his birth or his adopted country; his stay here is for personal convenience; he is attracted by the lure of gain and profit. While his aim or purpose is neither illegitimate nor immoral, he naturally lacks the spirit of loyalty and enthusiasm for this country where he temporarily stays and makes his living, or of spirit of regard, sympathy, and consideration for his Filipino customers as would prevent him from taking advantage of their weakness and exploiting them. Another objection to the alien retailer in this country is that he never really makes a genuine contribution to national income and wealth since the gains and profits he makes are not invested in industries that would help the country’s economy and increase national wealth.

The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real, furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree with the wisdom of the legislature's classification. To this we answer, that this is the prerogative of the law-making power. Since the Court finds that the classification is actual, real and reasonable, and all persons of one class are treated alike, and as it cannot be said that the classification is patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted within its legitimate prerogative and it cannot declare that the act transcends the limit of equal protection established by the Constitution.

2. Due Process: Petitioner’s main argument is that retail is a common, ordinary occupation, one of those privileges long ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest occupation and therefore beyond the power of the legislature to prohibit and penalized. However, the real question at issue is “whether the exclusion in the future of aliens from the retail trade unreasonable, arbitrary, and capricious taking into account the illegitimate and pernicious form and manner in which the aliens have heretofore engaged therein? As thus correctly stated the answer is clear. The law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to free national economy from alien control and dominance. It is not necessarily unreasonable because it affects private rights and privileges. The test of reasonableness of a law is the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into effect. Judged by this test, the disputed legislation, which is not merely reasonable but actually necessary, must be considered not to have infringed the constitutional limitation of reasonableness.

3. Alleged violation of international treaties and obligations: Another subordinate argument against the validity of the law is the supposed violation thereby of the Charter of the United Nations and of the Declaration of the Human Rights adopted by the United Nations General Assembly. We find no merit in the Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their subjects, and the Declaration of Human Rights contains nothing more than a mere recommendation or a common standard of achievement for all peoples and all nations. That such is the import of the United Nations Charter aid of the Declaration of Human Rights can be inferred the fact that members of the United Nations Organizations, such as Norway and Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws against foreigners engaged in domestic trade are adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 is also claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese nationals "upon the same terms as the nationals of any other country." But the nationals of China are not discriminating against because nationals of all other countries, except those of the United States, who are granted special rights by the Constitution, are all prohibited from engaging in the retail trade. But even supposing that the law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a subsequent law, and the same may never curtail or restrict the scope of the police power of the State.

EASTBOARD NAVIGATION V. JUAN YSMAEL CO., INC.

No. L-9090 September 1, 1957

Doctrine: The law of the forum governs procedural matters (such as notice requirements). The law of the state where a foreign judgment is sought to be enforced cannot be invoked to impugn the validity of the proceedings where the foreign judgment was made.

FACTS: Juan Ysmael Co., Inc (defendant), through K. H. Hemady (its president and general manager), chartered Eastboard Navigation’s (plaintiff) vessel to load a cargo of scrap iron in the Philippines for Buenos Aires. The charter party agreement contained, besides the regular charter party printed form, a typewritten clause providing for compulsory arbitration in the state of New York, U.S. in case of any disputes that may arise of said agreement. Juan Ysmael, through K.H. Hemady, signed not only the printed portion of the charter party but the typewritten portion. It appears that after the dispute as to the liability of Juan Ysmael (for the payment freight and demurrage) arose, K.H. Hemady appointed New York Attys. Manning, Harnisch, and Hollinger to represent Juan Ysmael in the arbitration proceedings to be held in New York. On May 23, 1959, Messrs. Manning, Harnisch, and Hollinger, acting as attorneys for Juan Ysmael executed with the attorney for Eastboard Navigation an arbitration agreement. The arbitration agreement was presented by Eastboard Navigation to the U.S. District Court, Southern District, Southern District of New York, for confirmation and said Court (acting as an admiralty court) confirmed the said arbitration decision in its Order and Final Decree of August 15, 1950 (“Order and Final Decree”).

Eastboard Navigation brought this action to enforce the aforesaid “Order and Final Decree” pursuant to Section 48, Rule 39 of the Rules of Court which provides that “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 the party, collusion, fraud, or clear mistake of law or fact.” Juan Ysmael sets up the defense that the judgment cannot be enforced in the Philippines because when the New York District Court acted on the case, it did not have jurisdiction over the person of the defendant.

Lower Court Ruling: Decision of the New York District Court affirmed and that the “Order and Final Decree” should be enforced.

Appellate Court Ruling: Not applicable.

ISSUE: 1. Whether or not the lower court erred in enforcing the “Order and Final Decree” issued by the New York District Court.

RATIO: CFI affirmed. 1. As to whether Juan Ysmael agreed to submit to compulsory arbitration its dispute with Eastboard Navigation in the charter party agreement executed between them, the Court held that it intended to submit its dispute with Eastboard Navigation to arbitration. Otherwise, the logical step that Juan Ysmael should have taken would be to repudiate the act of its president and general manager. Far from doing so, Juan Ysmael ratified it by subsequent acts which clearly indicate that it was agreeable to said arbitration. Consequently, said arbitration proceedings as well as the arbitration decision rendered pursuant thereof, as confirmed by the District Court of New York, are valid; hence, enforceable in this jurisdiction.

2. As to whether the decision rendered by the U.S. District court of New York sitting as an Admiralty Court, which ratified the award made by the arbitrators, has no binding effect on defendant corporation or whether it can be enforced in this jurisdiction as the U.S. District court did not acquire jurisdiction over Juan Ysmael, the Court held that such contention was unmeritorious. The claim is predicated on the alleged fact that defendant was never served with notice, summons, or process relative to the submission of the award of the arbitrators to said court, invoking U.S. Arbitration Act of February 12, 1925 under which the New York District court confirmed the arbitrator’s award. The law invoked, however, does not sustain defendant’s pretense since the Arbitration Act does not necessarily require that service of notice of the application for confirmation be made on the adverse party himself (in case of a non-resident), it being sufficient that it be made upon his attorney. In this case, a copy of notice of submission of the award to the District Court of New York was served upon defendant’s counsel who in due time made of record their appearance and actually appeared when the case was heard. It is also significant that defendant’s counsel never impugned the jurisdiction of the court over defendant nor did they ever plead before it that they were bereft of authority to represent defendant. Defendant cannot therefore in this distance defeat the effect of this decision by alleging want of jurisdiction, or want of notice, as provided for in Sec. 48, Rule 39 of the Philippine Rules of Court.

LY GIOK HA ET AL. V. GALANG

G.R. No. L-10760 (5/17/57)

Doctrine: Any foreigner who posted a bond to make his/her entry feasible in the country and thereafter be married to a citizen of the Philippines will be entitled to the return of the said bond.

FACTS: Petitioner Ly Giok Ha, alias Wy Giok Ha, entered the Philippines as a citizen of the Nationalist Republic of China and a temporary visitor, extended up to March 14, 1956. In order to make said entry feasible, her sister and co-petitioner Wy Hong Eng, had, on March 28, 1955, made with the Bureau of Immigration, a cash deposit of P10,000. Ly Giok Ha, alias Wy Giok Ha, married Restituto Lacasta, a Filipino. This notwithstanding, on March 16, 1956, respondent Emilio L. Galang, as Commissioner of Immigration declared said cash deposit forfeited. Ly Giok Ha, her husband Restituto Lacasta, the former's sister, Wy Hong Eng, and the latter's husband, Ngo In, instituted the present action against Emilio L. Galang.

Lower Court Ruling: The Court of First Instance of Manila rendered judgment for the petitioners.

Appellate Court Ruling: N/A

ISSUE: 1. Whether or not her marriage to a Filipino justified or excused the failure of Ly Giok Ha to depart from the Philippines and

thus the forfeiture of the cash bond posted was a violation of her right. – Yes

RATIO: On this issue of violating her bond which states, “the undersigned, with full knowledge that Ly Giok Ha, a temporary visitor whose authorized stay in this country is limited only up to and including August 14, 1955, do hereby undertake that said Ly Giok Ha will actually depart from the Philippines on or before said date so specified, or within such period as in his discretion the Commissioner of immigration or his authorized representative may properly allow,” asking for an extension did not violate the bond on four reasons: (a) Competent authorities granted said requests; (b) the bond clearly indicates that the Commissioner of Immigration, or his authorized representative, may properly allow an extension; (c) The requests for extension involved in the case at bar do not, in any manner whatever, run counter to any of the purposes sought to be served by the bond in question; (d) Respondent Galang did not regard said requests for extension as a breach of said undertaking.

On the issue of whether her marriage to a Filipino justified or, at least, excused the aforesaid failure of Ly Giok Ha to depart from the Philippines on or before March 14, 1956, The pertinent part of section 15 of Commonwealth Act No. 473, upon which petitioners rely, reads, “Any woman who is now or may hereafter be married to a citizen of the Philippines, and who might herself be lawfully naturalized shall be deemed a citizen of the Philippines.” By reason of such naturalization through marriage, section 40 (c) of Commonwealth Act No. 613 provides that "in the event of the naturalization as a Philippine citizen . . . of the alien on whose behalf the bond deposit is given, the bond shall be cancelled or the sum deposited shall be returned to the depositor or his legal representative.”

Considering, however, that neither in the administrative proceedings, nor in the lower court, had the parties seemingly felt that there was an issue on whether Ly Giok Ha may "be lawfully naturalized," and this being a case of first impression in our courts, The SC is of the opinion that, in the interest of equity and justice, the parties should be given an opportunity to introduce evidence, if they have any, on said issue. The decision appealed from is hereby set aside and let the records of this case be remanded to the lower court for further proceedings

AMERICAN BIBLE SOCIETY V. CITY OF MANILAG.R. No. L-9637 April 30, 1957

Doctrine: Corporations or associations organized and operated exclusively for religious, charitable, or educational purposes, are exempt from corporate income taxes.

FACTS: Plaintiff-appellant is a foreign, non-stock, non-profit, religious, missionary corporation duly registered and doing business in the Philippines through its Philippine agency established in Manila. The defendant appellee is a municipal corporation with powers that are to be exercised in conformity with the provisions of Republic Act No. 409, known as the Revised Charter of the City of Manila.

In the course of its ministry, plaintiff's Philippine agency has been distributing and selling bibles and/or gospel portions throughout the Philippines. On May 29 1953, the acting City Treasurer of the City of Manila informed plaintiff that it was conducting the business of general merchandise since 1945, without providing itself with the necessary Mayor's permit and municipal license, in violation of Ordinance No. 3000, as amended, and Ordinances Nos. 2529, 3028 and 3364, and required plaintiff to secure, within three days, the corresponding permit and license fees, in the total sum of P5,821.45.

Plaintiff paid to the defendant under protest the said permit and license fees in the aforementioned amount, giving at the same time notice to the City Treasurer that suit would be taken in court to question the legality of the ordinances under which, the said fees were being collected. With regard to Ordinance No. 2529, as amended by Ordinances Nos. 2779, 2821 and 3028, appellant contends that it is unconstitutional and illegal because it restrains the free exercise and enjoyment of the religious profession and worship of appellant.

Lower Court Ruling: For the purpose of taxing the merchandise mentioned in said legal provisions and that the taxes to be levied by said ordinances is in the nature of percentage graduated taxes, the RTC held that the case be dismissed for lack of merit.

Appellate Court Ruling: Verified the case to the SC for the reason that the errors assigned to the lower Court involved only questions of law.

ISSUE: 1. Whether or not the sale and distribution of bibles by the appellant is taxable. - No

RATIO: It may be true that in the case at bar the price asked for the bibles and other religious pamphlets was in some instances a little bit higher than the actual cost of the same but this cannot mean that appellant was engaged in the business or occupation of selling said "merchandise" for profit. For this reason the Court believe that the provisions of City of Manila Ordinance No. 2529, as amended, cannot be applied to appellant, for in doing so it would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs.

With respect to Ordinance No. 3000, as amended, which requires the obtention the Mayor's permit before any person can engage in any of the businesses, trades or occupations enumerated therein, it does not find that it imposes any charge upon the enjoyment of a right granted by the Constitution, nor tax the exercise of religious practices.

The Court thus reverse the decision appealed from, sentencing defendant return to plaintiff the sum of P5,891.45 unduly collected from it.

CLAUDINA VDA DE VILLARUEL V. MANILAG.R. No. L-10394 December 13, 1958

Doctrine: Manila Motor Co. should not be held liable for the rentals of the premises leased corresponding to the lapse of time that they were occupied as quarters or barracks by the invading Japanese army.

FACTS: The plaintiff Claudina Villaruel and the defendant Manila Motor Co., Inc. entered into a contract (Exhibit "A") whereby, the former agreed to convey by way of lease to the latter the property. The term of the lease was five (5) years, renewable for an additional period of five (5) years. The leased premises were placed in the possession of the lessee on the 31st day of October, 1940.

The Manila Motor Co., Inc. and its branch manager enjoying the premises, and the lessors receiving the corresponding rentals as stipulated, continued until the invasion of 1941; the enemy forces held and used the properties leased as part of their quarters from June 1, 1942 to March 29, 1945, ousting the lessee therefrom. No payment of rentals were made at any time during the said period. Upon the liberation of the said city in 1945, the American Forces occupied the same buildings that were vacated by the Japanese, until October 31, 1945. Monthly rentals were paid by the said occupants. When the United States Army finally gave up the occupancy the premises, the Manila Motor Co., Inc., decided to exercise their option to renew the contract for the additional period of five (5) years. Simultaneously with such renewal, the company sublet the same buildings, except that used for the residence of the branch manager, to the other defendant, Arturo Colmenares. However, before resuming the collection of rentals, Dr. Alfredo Villaruel, consulted Atty. Luis Hilado on whether they had the right to collect, from the defendant company, rentals corresponding to the time during which the Japanese military forces had control over the leased premises. Upon being advised that they had such a right, Dr. Villaruel demanded payment thereof, but the defendant company refused to pay. As a result, Dr. Villaruel gave notice seeking the rescission of the contract of lease and the payment of rentals. The lessors commenced this action on April 26, 1947 with the Court of First Instance of Negros Occidental against the appellants herein.

During the pendency of the case, a fire originating from the projection room of the City Theatre, into which Arturo Colmenares, had converted the former repair shop of the Manila Motor Co. Inc., completely razed the building. Plaintiffs demanded reimbursement but the defendants refused.

Lower Court Ruling: The case was accordingly heard and thereafter, judgment was rendered in plaintiffs' favor.

Appellate Court Ruling: N/A

ISSUE: 1. Whether or not Manila Motor Co. should be held liable for the rentals of the premises leased corresponding to the lapse of

time that they were occupied as quarters or barracks by the invading Japanese army. - NoRATIO: On the issue of the amendment in the complaint from the non-payment of the rentals during the Japanese occupation, to the non-payment of the burned property, this cannot be considered as already altering the theory of the case which is merely a change in the relief prayed for, brought about by circumstances occurring during the pendency of the action, and is not improper. Section 2, Rule 17 of the Rules of Court states, "to the end that the real matter in dispute and all matters in the action in dispute between the parties may, as far as possible be completely determined in a single proceeding".

On the issue of the non-payment during the Japanese occupation, the first paragraph of article 1560, the lessor does not answer for a mere act of trespass (perturbacion de mero hecho) as distinguished from trespass under color of title ( perturbacion de derecho). Upon the basis of the distinction thus established between the perturbacion de hecho and the perturbacion de derecho, it is demonstrable that the ouster of the appellant by the Japanese occupying forces belongs to the second class of disturbances, de derecho. For under the generally accepted principles of international law, a belligerent occupant may legitimately billet or quarter its troops in privately owned land and buildings for the duration of its military operations, or as military necessity should demand. We are thus forced to conclude that in evicting the lessee, Manila Motor Co., Inc. from the leased buildings and occupying the same as quarters for troops, the Japanese authorities acted pursuant to a right recognized by international and domestic law. Its act of dispossession, therefore, did not constitute perturbacion de hecho but a perturbacion de derecho for which the lessors Villaruel were liable and for the consequences of which said lessors must respond, since the result of the disturbance was the deprivation of the lessee of the peaceful use and enjoyment of the property leased. Wherefore, the latter's corresponding obligation to pay rentals ceased during such deprivation. Consequently, it was reversible error to sentence the appellants to pay P2,165 a month as reasonable value of the occupation of the premises from July 1946, and the value of the destroyed buildings amounting to P30,000.

ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO V. THE LAND REGISTRATIONG.R. No. L-8451 December 20, 1957

Doctrine: A corporation sole, irrespective of the citizenship of its incumbent, is not prohibited or disqualified to acquire and hold real properties in the Philippines.

FACTS:Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a deed of sale of a parcel of land located in the same city, in favor of the Roman Catholic Apostolic Administrator of Davao Inc., corporation sole organized and existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a Canadian citizen, as actual incumbent. When the deed of sale was presented to Register of Deeds of Davao for registration, the latter required said corporation sole to submit an affidavit declaring that 60 per cent of the members thereof were Filipino citizens.

As the Register of Deeds entertained some doubts as to the registerability of the document, the matter was referred to the Land Registration Commissioner en consulta for resolution. Proper hearing on the matter was conducted by the Commissioner and after the petitioner corporation had filed its memorandum, a resolution was rendered, holding that in view of the provisions of Section 1 and 5 of Article XIII of the Philippine Constitution, the vendee was not qualified to acquire private lands in the Philippines in the absence of proof that at least 60 per centum of the capital, property, or assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was actually owned or controlled by Filipino citizens, there being no question that the present incumbent of the corporation sole was a Canadian citizen. It was also the opinion of the Land Registration Commissioner that section 159 of the corporation Law relied upon by the vendee was rendered operative by the aforementioned provisions of the Constitution with respect to real estate, unless the precise condition set therein — that at least 60 per cent of its capital is owned by Filipino citizens — be present, and, therefore, ordered the Registered Deeds of Davao to deny registration of the deed of sale in the absence of proof of compliance with such condition.

Land Registration Commissioner Ruling: The vendee was not qualified to acquire private lands in the Philippines in the absence of proof that at least 60 per centum of the capital, property, or assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was actually owned or controlled by Filipino citizens.

ISSUE: 1. Whether or not a corporation sole, irrespective of the citizenship of its incumbent, is not prohibited or disqualified to

acquire and hold real properties. – Yes

RATIO: Although a branch of the Universal Roman Catholic Apostolic Church, every Roman Catholic Church in different countries, if it exercises its mission and is lawfully incorporated in accordance with the laws of the country where it is located, is considered an entity or person with all the rights and privileges granted to such artificial being under the laws of that country, separate and distinct

from the personality of the Roman Pontiff or the Holy See, without prejudice to its religious relations with the latter which are governed by the Canon Law or their rules and regulations.

As provided by law, lands held in trust for specific purposes me be subject of registration (section 69, Act 496), and the capacity of a corporation sole, like petitioner herein, to register lands belonging to it is acknowledged, and title thereto may be issued in its name (Bishop of Nueva Segovia vs. Insular Government, 26 Phil. 300-1913).

The framers of the Constitution intended certain provisions as barrier for foreigners or corporations financed by such foreigners to acquire, exploit and develop our natural resources. But that is not the case of corporations sole in the Philippines, for, they are mere administrators of the "temporalities" or properties titled in their name and for the benefit of the members of their respective religion composed of an overwhelming majority of Filipinos. Hence, respondent Register of Deeds of the City of Davao is ordered to register the deed of sale executed by Mateo L. Rodis in favor of the Roman Catholic Apostolic Administrator of Davao.

LIM SIOK HUEY ET AL. V. ALFREDO LAPIZ ET AL.,G.R. No. L-12289 May 28, 1958

Doctrine: In case of foreign plaintiffs, the authorization given to the counsel must be clear, specific, and unequivocal.

FACTS: This is an action by the spouse and the children of Chua Pua Lun to recover damages from Alfredo Lapiz, the driver of the Jaguar jeepney which collided with a bus, resulting to the death of Chua. As two of the children are minors, the court, upon motion of their counsel, appointed Chua Pua Tam, a brother of the deceased, as guardian ad litem to represent them in this case. After trial, however, the lower court dismissed the complaint on the theory that plaintiffs failed to authorize anyone to file the complaint on their behalf, which is fatal to their cause as they are all citizens and residents of Communist China. In fact, Chua Pua Tam, the guardian ad litem, testified that the plaintiffs had not written to him nor had he communicated with them.

Lower Court Ruling: the lower court dismissed the complaint.

ISSUE: 1. Whether or not the plaintiffs have have authorized anyone to file the present case against the defendants – No.

RATIO: The Supreme Court found that there was no error in the findings made by the trial court. It appears that the plaintiffs are all citizens and residents of Communist China and notwithstanding the fact that they have been informed of the death of the deceased, they have not sent any communication to anyone in the Philippines giving authority to take whatever action may be proper to obtain an indemnity for his death.

The present action was initiated by plaintiffs represented merely by their counsel and the question arose as to whether the latter had the proper authority to represent the former in view of the fact that they are all residents of a foreign country. While a lawyer is presumed to be properly authorized to represent any cause in which he appears, he may however be required by the court on motion of either party to produce his authority under which he appears and counsel for the plaintiffs failed.

The appointment of Chua Pua Tam as guardian ad litem would not suffice to meet the requirement of the rule which provides that every action must be prosecuted in the name of the real party in interest. Again, it must be shown that Chua Pua Tam was authorized by the heirs abroad to act as such in behalf of the minors. But when in the course of the trial, it was found that he never had any communication with any of the heirs and, much less, received any authority from them the trial court acted accordingly in considering his representation ineffective.

LEE SUAN AY, ALBERTO TAN, & LEE CHIAO V. EMILIO GALANG ET AL.,G.R. No. L-1185 December 13, 1959

Doctrine: The facts in obtaining citizenship, all the qualifications and disqualifications, must be proved before the court.

FACTS: In 1954, Lee Suan Ay, a Chinese citizen, arrived in the Philippines and was admitted and authorized to stay as a temporary visitor for period of three months. This was extended until 25 March 1955. Before her arrival, her father posted a cash bond amounting to P10,000 as guarantee for her compliance with the terms and conditions of her stay in the Philippines. On 18 March 1955, Alberto Tan, a Filipino, and Lee Suan Ay requested the Justice of the Peace of Las Piñas, Rizal, to join them in marriage. He refused to do so as she had to obtain parental advice, being less than 23 years old.

On 28 March 1955, the bondsman wrote a letter informing the Commissioner of Immigration that his daughter was ill and confined at the Chinese General Hospital since 21 March 1955 and that as she might collapse during the return trip to Hongkong, she deferred her departure set for 23 March, and requesting that she be granted ten days extension of her authorized period of temporary stay in the Philippines to enable her to rest and recuperate. On 1 April 1955, Lee Suan Ay and Alberto Tan were joined in marriage by the Justice of the Peace of Las Piñas. After their marriage, they received a letter from the Commissioner of Immigration denying their petition for extension of her temporary stay in the Philippines and declaring the cash bond forfeited in favor of the

Government. Her father asked for reconsideration on the ground that having married a Filipino citizen, Le Suan Ay follows the Citizenship of her husband and ceased to be an alien temporary visitor, and that reason the cash bond filed should be returned to him; and that her failure to present herself to the Commissioner of Immigration within 24 hours from receipt of notice was due to illness and loss of weight. Thus, this case was filed.

Lower Court Ruling: The Court dismissed the plaintiffs' complaint but left the reduction of the bond to the sound discretion of the Commissioner of Immigration.

ISSUE: 1. Whether or not the P10,000 bond originally filed should be returned – No.

RATIO: The fact that Lee Suan Ay was married to a Filipino citizen does not relieve the bondsman from his liability on the bond. The marriage took place on 1 April 1955, and the violations of the terms and conditions of the undertaking in the bond — failure to depart from the Philippines upon expiration of her authorized period of temporary stay in the Philippines (25 March 1955) and failure to report to the Commissioner of Immigration within 24 hours from receipt of notice — were committed before the marriage. Moreover, for a valid citizenship acquired by marriage, it must be shown that she possesses the qualifications required by law to become a Filipino citizen by naturalization. There is no showing that Lee Suan Ay possesses all the qualifications and none of the disqualifications provided for by law to become a Filipino citizen by naturalization. Thus, the order appealed from is affirmed.

TESTATE ESTATE OF C. O. BOHANAN, PHILIPPINE TRUST CO., v. MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA BOHANAN

G.R. No. L-12105 January 30, 1960

Doctrine: As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions are to be governed by the national law of the testator provided that the law be evidenced in the court.

FACTS: Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922.Decedent in this case gave out of the total estate (after deducting administration expenses) of P211,639.33 in cash, his

grandson P90,819.67 and one-half of all shares of stock of several mining companies and to his brother and sister the same amount. To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary provisions disposing of the estate in the manner above indicated, claiming that they have been deprived of the legitimate that the laws of the form concede to them.

Lower Court Ruling: Dismissed the objections filed by Magdalena C. Bohanan, Mary Bohanan and Edward Bohanan to the project of partition submitted by the executor and approving the said project.

The testator permanent residence or domicile in the United States depended upon his personal intent or desire, and he selected Nevada as his homicide and therefore at the time of his death, he was a citizen of that state.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and admits the same to probate.

ISSUES: 1. Whether Magdalena C. Bohanan can claim. NO2. Whether the testamentary dispositions, especially those for the children which are short of the legitime given them by the

Civil Code of the Philippines, are valid NO.

RATIO: The court below had found that the testator and Magdalena C. Bohanan were married on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife exists in the State of Nevada and since the court below had already found that there was no conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no longer claim to pay portion of the estate left by the testator.

Edward and Mary Lydia, who had received legacies in the amount of P6,000 each only, and, therefore, have not been given their shares in the estate which, in accordance with the laws of the forum, should be two-thirds of the estate left by the testator.

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly provides that successional rights to personal property are to be earned by the national law of the person whose succession is in question.

In the proceedings for the probate of the will, it was found out and it was decided that the testator was a citizen of the

State of Nevada because he had selected this as his domicile and his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue is whether the testementary dispositions, especially hose for the children which are short of the legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada Laws of 1925, supra). The law of Nevada, being a foreign law can only be proved in our courts in the form and manner provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that the foreign law was introduced in evidence by appellant's (herein) counsel as Exhibits "2".

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.

BENITO E. LIM V. HERBERT BROWNWELL, JR.,G.R. No. L-8587 March 24, 1960

Doctrine: A foreign government cannot be sued without its consent.

FACTS: The property in dispute consists of four parcels of land situated in Tondo Manila with a total area of 29,151 square meters. The lands were, after the world war, found by the Alien Property Custodian of the United States to be registered in the name of Asaichi Kagawa, national of an enemy country. The Philippine Alien Property Administrator and the President of the Philippines then executed two formal agreements with the United States to transfer all four lots to the Republic of the Philippines with an undertaking to indemnify the United States for all claims in relation to the property transferred.

Benito Lim, filed a formal notice of claim with the Philippine Alien Property Administrator, contending that the lots in question still belonged to the estate of her mother, Arsenia Enriquez. He alleged that the lots were once the property of Arsenia Enriquez; that they were mortgaged by her to the Mercantile Bank of China; that the mortgage having been foreclosed, the property was sold at public auction during the war to the Japanese Asaichi Kagawa, who succeeded in preventing Arsenia Enriquez from exercising her right of redemption; and that Kagawa never acquired any valid title to the property because he was ineligible under the Constitution to acquire residential land in the Philippines by reason of alien age.

The Vested Property Claims Committee of the Philippine Alien Property Administrator disallowed the claim. The order became final as Lim did not appeal therefrom. Thus, Lim, as administrator of the intestate estate of Arsenia Enriquez, filed a complaint in the Court of First Instance of Manila against the Philippine Alien Property Administrator (later substituted by the Attorney General of the United States) for the recovery of the property in question with back rents. The complaint was later amended to include Asaichi Kagawa as defendant. He was summoned by publication, but having failed to file an answer to the complaint, he was declared in default.

Lower Court Ruling: The court dismissed the complaint on the ground that it had no jurisdiction over the subject matter since the claim constituted a suit against the United States to which it had not given its consent.

ISSUES: 1. Whether or not the complaint was a suit against the Government of the United States – Yes, but there was consent.2. Whether or not damages must be paid – No, the consent of the United States was limited to filing of suit and does not

extend to the payment of damages.

RATIO: The order of dismissal cannot be sustained in its entirety. Although the action is in substance against the United States, the immunity of the state from suit, cannot be invoked where the action is instituted by a person who is neither an enemy or ally of an enemy for the purpose of establishing his right, title or interest in vested property, and of recovering his ownership and possession. The consent to such suit has expressly been given by the United States in Sec. 3 of the Philippine Property Act of 1946.

Turning to the claim of damages, the order of dismissal must be upheld. The relief available to a person claiming enemy property which has been vested by the Philippines Alien Property Custodian is limited to those expressly provided for in the Trading with the Enemy Act, which does not include a suit for damages for the use of such vested property..

With respect to the recovery or return of the properties vested, section 33 of the Trading with the Enemy Act provides a prescriptive period: the claim should not be filed later than April 30, 1949, or within two years from the date of vesting, whichever is

later. In computing the two years, however, the period during which there was pending a suit or claim for the return of the said property shall be excluded.

Here, insofar as lots 3 and 4 of the land in dispute are concerned, vesting occurred on July 6, 1948 and consequently the two-year period within which to file the action for their recovery expired on July 7, 1950. But in computing that the two-year period, the time during which plaintiff's claim with the Philippine Alien Property Administration was pending — from November 16, 1948 when the claim was filed to March 7, 1950 when it was dissallowed — should be excluded. The complaint thereof filed on November 13, 1950 is well within the prescribed period.

On the other hand, lots 1 and 2 were vested by the Alien Property Custodian on March 14, 1946. The two-year period, therefore, within which to file a suit for their return expired on March 14, 1948.

Plaintiff contends that section 33 of the Trading with the Enemy Act cannot prevail over section 40 of the Code of Civil Procedure, which provides that an action to recover real property prescribes after 10 years, on the theory that under international law questions relating to real property are governed by the law of the place where the property is located and that prescription, being remedial, is likewise governed by the laws of the forum. But the trading with the Enemy Act, by consent of the Philippine Government, continued to be in force in the Philippines even after July 4, 1946 and consequently, is as much part of the law of the land as section 40 of the Code of Civil Procedure.

Thus, the order appealed from insofar as it dismisses the complaint with respect to Lots 1 and 2 and the claim for damages against the Attorney General of the United States and the Republic of the Philippines, is affirmed, but revoked insofar as it dismisses the complaint with respect to Lots 3 and 4, as to which the case is hereby remanded to the court below for further proceedings.