Conflict+of+Laws+Digests+FINAL+(1951-1960)

5/20/2018 Conflict+of+Laws+Digests+FINAL+(1951-1960)

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Conflict of Laws Cases 1951-1960

(1) Saura Import and Export Co., Inc. v. Bibiano L. Meer

GR No. L-2927 February 26, 1951

(2) Philippine Refining v. Ledesma

GR No. L-2193 April 27, 1951

(3) In re: Testate Estate of the deceased Jose B. Suntay

GR Nos. L-3087 and L-3088 July 31, 1954

(4) Pacific Micronisian Line v. Del Rosario

GR No. L-7154 October 23, 1954

(5) King Mau Wu v. Sycip

GR No. L-5897 April 23, 1954

(6) Arca v. Javier

GR No. L-6768 July 31, 1954

(7) De los Santos and Astraquillo v. Republic


(8) Cayetano Liwanag v. Robert Hamill


(9) Paul Mac Donald v. National City Bank of NY

GR No. L-7991 May 21, 1956

(10) Cu Unjieng Sons v. Board of Tax Appeals

GR No. L-6296 September 29, 1956

(11) Mamerto Corre v. Guadalupe Corre

GR No. L-10128 November 13, 1956

(12) Lao Ichong et al. v. Jaime Hernandez

101 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. Galang

101 Phil 459 May 17, 1957

(15) American Bible Society v. City of Manila

101 Phil 386 April 30, 1957

(16) Claudina Vda de Villaruel v. Manila Motor

104 Phil 926 December 13, 1958

(17) Roman Catholic Apostolic Administrator of Davao v. The LandRegistrationCommission


(18) Lim Siok Huey v. Alfredo Lapiz

103 Phil 930 May 28, 1958

(19) Lee Suan Ay et al. v. Galang



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(20) Ko Wai Me v. Galang

106 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


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SAURA IMPORT AND EXPORT CO., INC.,v.BIBIANO L. MEER

G.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 Sauras purchase, the United States Army in the Philippines

was a belligerent occupant, at least of army bases, army depots, and armyinstallations 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 occupantevacuatedthe district orwas

driven out by the enemy, or bylevee en massee, and the legitimate government

actuallyresumedits 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


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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 LEDESMA

GR. 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 byBritish 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


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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 notdelivered 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 Samanillo.

IN RE: TESTATE ESTATE OF THE DECEASED JOSE B. SUNTAY. SILVINO

SUNTAY VS IN RE: INTESTATE ESTATE

G.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 withhis 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


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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 ofBulacan 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 witnessespresented 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:


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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 wouldbe 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 ofAmoy, 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.


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PACIFIC MICRONISIAN LINE, INC. v. DEL ROSARIO

G.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 isdoing business in the

Philippines. This is asine qua nonrequirement. 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 groundthat 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 ourcourts 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:


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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 isdoing

business in the Philippines. This is asine qua nonrequirement. This fact must

be first established in order that summons can be made and jurisdictionacquired. 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.


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KING MAU WU v.FRANCISCO SYCIP

GR 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 FranciscoSycip 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 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 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.


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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 deniedboth 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 FirstInstance 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 theirmarriage 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


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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 divorceAlfredo 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 predicatedon 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? NO

2.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 thevalidity 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 Hixvs.

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 areRamirez vs. Gmur, 42 Phil. 855; Cousins Hixvs. Fluemer,

55 Phil., 851, andBarretto Gonzales vs. Gonzales, 58 Phil., 67.


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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 divorcegranted 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. (Andrewsvs. 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 bebona fide. (14 Cyc. 817, 181.)" (Ramirezvs. 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 Hixvs.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 Gonzalesvs. 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 atMobile 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


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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.


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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, thePhilippine 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


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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 arenon-negotiable. Instead of

sustaining appellees' claim, section 5 of the uniform Stock Transfer Act, which

"gives full negotiability to certificates of stock,"refutessaid 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 beingdistinct

from thegeneralCorporation Law, the aforementioned Uniform Act is not inforce in the Philippines. In this connection, it should be noted that thisspecial

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 apart 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 isexplicit

statutory provision to the contrary.


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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 aProvost Marshal of Clark Field is a peace officer of the


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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 basesto 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.


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PAUL MACDONALD, ET AL., v. NATIONAL CITY BANK OF NEW YORK

G.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,DefendantStasikinocey 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


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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 mortgagees

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,Respondentherein learned that the

partnership Stasikinocey transferred to William Shaeffer, from the latter to Paul

McDonald, and from Paul McDonald to Benjamin Gonzales, of the vehiclespreviously pledged by Stasikinocey to theRespondent. 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

madeDefendantsbecause they claimed to have a better right over the pledged

vehicle.

Lower Court Ruling:Judgment in favor of theRespondent, annulling the sale

of the vehicles in question to Benjamin Gonzales; sentencing Da Costa and

Gorcey to pay to theRespondentjointly and severally the sum of P6,134.92,

with legal interest from the debt of the promissory note involved; sentencing the

PetitionerGonzales to deliver the vehicles in question to theRespondentfor 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

Respondentjointly 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 toAppellantWilliam Shaeffer in the obligation of paying, jointly and severally,

together with Alan W. Gorcey and Louis F. da Costa, Jr., any deficiency that mayremain 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 thenDefendantsLouis F. da Costa, Jr., and Alan

W. Gorcey had not paid the amount of the judgment debt.

ISSUE:


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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 juridicalpersonality, 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 APPEALS

G.R. No. L-6296 September 29, 1956


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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 CUSs 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 theground 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,


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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 theincome 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 theCommission 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 enemyattack).

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


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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 becameeffective, 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 reasonableexpectation 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 Philippineslater 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


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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 CORRE

G.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 womens 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 withoutpronouncements as to costs.

Appellate Court Ruling:Not applicable.

ISSUE:

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


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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 beingthe case, Mamero has no choice other than to file the action in the court of first

instance of Guadalupes 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 forbusiness 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 HERNANDEZ

101 Phil 1155 (05/31/57)

Doctrine: A law distinguishing aliens from residents does not violate the equalprotection 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 arenot 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


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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 inthe 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 otherpersons 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.


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 countrys economy

and increase national wealth.


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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 aretreated 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:Petitioners 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 thefuture 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 inferredthe 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


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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.


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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 Navigations (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. Hemadyappointed 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 Orderand 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.


ISSUE:

1.Whether or not the lower court erred in enforcing the Order and Final

Decree issued by the New York District Court.


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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 JuanYsmael 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 beenforced 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 arbitrators

award. The law invoked, however, does not sustain defendants 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 defendants counsel who in due time made of record their

appearance and actually appeared when the case was heard. It is also

significant that defendants 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.


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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 tothe 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'ssister, 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 failureof 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


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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, mayproperly 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 ofsuch 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 returnedto 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


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AMERICAN BIBLE SOCIETY V. CITY OF MANILA

G.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.


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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, andOrdinances 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 ofappellant.

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.


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The Court thus reverse the decision appealed from, sentencing defendant

return to plaintiff the sum of P5,891.45 unduly collected from it.


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CLAUDINA VDA DE VILLARUEL V. MANILA

G.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 theformer 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


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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. - No

RATIO: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 undercolor of title (perturbacion de derecho). Upon the basis of the distinction thus

established between theperturbacion de hechoand theperturbacion 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 internationaland domestic law. Its act of dispossession, therefore, did not constitute

perturbacion de hechobut aperturbacion de derechofor 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.


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ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO V. THE LAND

REGISTRATION

G.R. No. L-8451 December 20, 1957

Doctrine:A corporation sole, irrespective of the citizenship of its incumbent, is notprohibited 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

Commissioneren consultafor 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 presentincumbent 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


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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

Documents

Conflict+of+Laws+Digests+FINAL+(1951-1960)