San Beda College of Law Mendiola, Manila

CONFLICT OF LAWS

Atty. Marciano Delson

ANO ANG MASUSUNOD?A Review on Development of Philippine Private International Law on the Matter of Wills, Property, Torts and Crime By: EVAN E. DOMASIAN, 4S This paper is a humble undertaking to present elementary points of conflict of laws on wills, property, torts and crime as applied in this jurisdiction. Thus, discussion would be composed of four parts. I. WILLS Our Civil Code through Art. 783 defines a will as an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his death. From a conflict-of-laws perspective, a will is an involuntary transfer of property because although the act of executing ones last will and testament is a voluntary act, that in itself, does not transfer title. It is only upon the death of the owner that the will comes into effect and since death is an involuntary act the making of a will becomes an involuntary transfer of property. (Minor, Chapter I note 4, at 332) There are two theories or systems in determining the proper law for the transmission of successional rights; the unitary or single system and the split or scission system. Under the unitary or single system, only one law determines transmission of real as well as personal properties. x x x However, under the split or

Page 2 of 17 scission system, which England and the United States adopt, succession to real property is governed by the lex situs, while succession to movable or personal property is governed by the law of the domicile of the deceased at the time of his death. In the Philippines, we follow the unitary system, in that Art. 16 of the New Civil Code applies the national law of the deceased, whatever may be the nature of the property and regardless of the country where the property is found. (p. 105, Sempio-Diy, Handbook on Conflict of Laws, 2004) a. Extrinsic Validity of Wills Extrinsic Validity of a will deals with the forms and solemnities in the making of wills (including the age and capacity of the testator to make the will; the number of witnesses; the form of the will- oral, private instrument, public instrument; and so forth). (p.347, Paras, Phil. Conflict of Laws, 1996) The following are our conflicts rules on the extrinsic validity of wills: 1. If the will is made by an alien abroad, he must comply with the formalities of the lex nationalii OR lex domicilii OR Philippine law. (Art. 17 par. 1, Civil Code) 2. If the Filipino makes a will abroad, he may comply with the formalities of the lex nationalii or the lex celebrationis. (Art. 815, Civil Code) 3. If an alien makes a will in the Philippines he is allowed to comply with the formalities of his own country (lex nationalii) or the law of the Philippines. (Art. 817, Civil Code) a.1. Extrinsic Validity of Joint Wills Joint wills are those executed in the same instrument by two or more testators. They are considered by our Civil Code as null and void. x x x The following are our conflicts rules on the matter:

Page 3 of 17 1. If the joint wills were made by Filipinos abroad, the same shall be considered void in the Philippines, even if they are valid in the place where they were executed. 2. Joint wills made by aliens abroad shall be considered as valid in the Philippines if valid according to the lex nationalii or lex domicilii or lex celebrationis. Be it noted that the prohibition referred to in Art. 819 applies only to Filipinos. 3. Joint wills made by aliens in the Philippines, even if valid in accordance with their national law, will not be countenanced because otherwise our public policy may be militated against. (p. 348, Ibid.) b. Intrinsic Validity of Wills Intrinsic validity concerns itself with the order of succession, the amount of successional rights each heir gets, and such other matter that fall under the term substance as distinguished from forms and solemnities of wills. Sempio-Diy) Under the unitary system adopted from Roman Law, the intrinsic validity of wills is governed by the national law of the decedent. (p. 482, Coquia) Therefore, Art. 16, par. 2 of the Civil Code states: However, intestate and testamentary (p. 106,

succession, both with respect to the order of succession and the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. We must not forget, however, that in case of conflict between the nationality theory and the domiciliary theory, we can treat the case as one of renvoi x x x so that we

Page 4 of 17 can apply Philippine Law even if the deceased was a citizen of another country. (p. 107, Sempio-Diy) c. Revocation of Wills Being a unilateral and purely personal act, wills are revocable at any time before the death of the testator. Any waiver or restriction of this right is void. (Art. 828, Civil Code) Under Art. 829 of the Civil Code a revocation done outside the Philippines, by a person who does not have a domicile in this country in this country, is valid when it is done according to (1) the law of the place where the will was made or (2) the law of the place where the testator had his domicile at that time. If the revocation is done outside the Philippines by one domiciled in the Philippines, the law of the domicile, which is the Philippines or the law of the place of the revocation controls. If the revocation takes place in this country it is valid when it is in accordance with the provisions of our Civil Code. (p. 488, Coquia) d. Interpretation of the Wills The words of a will should be interpreted by the rules on construction specifically referred to in the will; in default of their express mention in the will, the rules of interpretation are those under the national law of the deceased, since we may reasonably presume that this was the testators intent. (Minor, Conflict of Laws, p. 339) Thus, if the testator is a Japanese national, the term compulsory heirs in his will must be construed to refer to the compulsory heirs under the Japanese law, unless the testator had expressly made mention of some other law as applicable. (Stumberg, Principles of Conflict of Laws, p. 386) The provisions of a will shall be interpreted in accordance with the testators intention. If the terms are clear and unambiguous, the literal meaning of the stipulations shall control. Otherwise, the evident intention of the testator must

Page 5 of 17 prevail by not only referring to the context of the will but also taking into account the contemporaneous and subsequent acts of the testator. (Arts. 1370 to 1378, Civil Code) Every effort should be made to prevent intestacy in keeping with the policy of respecting the will of the testator, provided that this can be ascertained. (p. 109, Sempio-Diy) e. The Concept of Caduciary Rights Caduciary rights refer to the right of the state to claim thru escheat proceedings the properties of decedents who are not survived by any heirs. Dean Graveson calls them the claims of the sovereign or other public authority of a country in which the deceaseds property is situated on failure of all persons entitled to claim under the appropriate law. (Graveson, Conflict of Laws, p. 324) In the Philippines and some civil law countries, the theory adopted is that the State is the last heir of the deceased person. Hence, the State succeeds to the properties left by said deceased as an heir. (p. 112, Sempio-Diy) f. Probate Probate is the act of proving before a competent court the due execution of a will possessed of testamentary capacity, as well as approval thereof by the said court. Probate has also been referred to as probation, legalization, protocolization, authentication. (Manahan v. Manahan, 58 Phil. 448) A probate is essential because under the law no will shall pass real or personal property unless it is proved and allowed in accordance with the Rules of Court. (Art. 838, par. 1, Civil Code) The allowance or disallowance of will is essentially procedural, so that the law of the forum applies to all procedural matters. If a will executed abroad has not yet been probated in a foreign country, the ordinary Philippine probate procedure is required.

Page 6 of 17 Likewise, Rule 77 of the Rules of Court is followed whenever a will probated abroad is allowed here in the Philippines. II. PROPERTY Art. 414 of the Civil Code of the Philippines defines property as follows: All things which are or may be the object of appropriation are considered either: 1. Immovable or real property; or 2. Movable or personal peoperty. The rule in Conflict of Laws governing property has been simplified under the Philippine Civil Code applying the lex situs rule for both real and personal property. a. Real Property The rule of lex situs or lex rei sitae to real properties is universally recognized. Real property as well as personal property is subject to the law of the country where it is situated. (Art. 16, par. 1, Civil Code.) Its immovability makes it logical that it shall be subject to the laws of the State where it is found; contrary rules in foreign States cannot certainly be given effect unless the situs so allows. (Beale, Conflict of Laws, Vol. II, p. 938) The reason for the rule is clear and logical.As the place where a thing is situated is the natural center of rights over it, everybody concerned with the thing may be expected to reckon with the law of such place. (Wolff, Private International Law, p. 564) The theory of lex sitae governs the following things connected with real property: the extrinsic validity of alienations, transfers, mortgages, capacity of the parties, interpretation of documents, effects of ownership, co-ownership, accession, usufruct, lease, easement, police power, eminent domain, taxation, quieting of title, registration and prescription. (p. 322, Paras)

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There are at least four (4) exceptions to the rule that the lex rei sitae governs real property: 1. In the case of succession rights to real property, what should control is the national law of the deceased. (Art. 16, par. 2, Civil Code) 2. Capacity to succeed (in inheritance problems) is also governed by the national law of deceased. (Art. 1093, Civil Code) 3. Contracts involving real property but which do not deal with the title to such real property shall not necessarily be concerned by the lex rei sitae. The proper law of the contract-which is the lex loci voluntatis or the lex loci intentionis is should be regarded as controlling. (Goodrich, Conflict of Laws, p. 548) b. Personal Property The old rule of mobilia sequuntur personam grew up in the middle ages when movable property could easily be carried from place to place. (Pullmans Palace Car Co. v. Comm. Of Pennsylvania, 141 U.S. 1822) Therefore since said properties does not have a fixed situs, an artificial situs was given to them; namely, the personal law of the owner. Recently in many countries, the lex situs has also been adopted with respect to personal properties, the chief reason for the change being that the situs is easily ascertainable, making it convenient for the parties and third persons who may be affected by rights in rem created over personal properties to have those rights enforced and made effective. (Wolff, Id)As the place where the properties are located has the legal and coercive power to enforce said rights, the lex situs or lex rei sitae applies to said properties. (Goodrich, Conflict of Laws, p. 470) As abovementioned, lex situs now also governs personal property. Several reasons were set up to justify the doctrine of personal law of the property:

Page 8 of 17 1. Firstly, since personal property has no fixed situs, an artificial one must be created: this artificial situs should be the personal law of the owner; 2. Secondly, the rule is simple, and would apply wherever the location of personal property; and 3. Thirdly, the rule is more stable, since the rule would remain in despite the change location of the movable. (Story Commentaries on the Conflict of Laws, p. 376) In the words of Senator Lorenzo Tanada, now that there has been great increase in the amount and variety of personal property not immediately connected with the person of the owner (Wharton, Conflict of Laws, Secs. 297-311). It was deemed advisable by Congress of the Philippines to adopt the doctrine of lex rei sitae also to movables. (Report of Senator Tanada, Chairman, Special Committee on the New Civil Code) Personal property may be tangible or intangible. The tangibles are more appropriately referred to as choses in possession and the intangible are more accurately known as choses in action (such as shares of stock, franchises, and copyrights). With reference to choses in possession, the doctrine of lex rei sitae presents no difficulty except perhaps in the case of usually moving objects (such as ships and goods in transit). Choses in action, however, sometimes present complicated problems. (p. 329, Paras) The term chose is a thing, an article of personal property. A chose is a chattel personal, and is either in action or in possession. (Blacks Law Dictionary, abridged fifth ed., p. 125) Cheshire comments that this way of classifying objects is not only a linguistic solecism, since it is scarcely possible to move a thing that cannot be touched, but it provokes an unfortunate tendency to ascribe to a disembodied thing, such as a debt, the physical attributes of a corporeal object as, for instance, a definite status. (Cheshire, note 1, p. 486)

Page 9 of 17 b.1. Choses in Possession Choses in possession that usually move (like means of transportation and goods in transitu) naturally have a changing situs. Vessels, in view if their inherent movability, are governed by the law of the flag in many States; in others the law of the place or registry takes the place of the lex rei sitae. Said law of the flag or the registry- as the case may be- is deemed controlling in case for instance of the sale and mortgage of the vessel if the vessel at the time of the transaction is on the high seas. If the vessel, however, is docked at a foreign port, said port is usually regarded as the temporary lex situs by both the owner and third parties. (p. 529530, Wolff) Regarding goods in transit, the following rules generally should be regarded as applicable: 1. Liability for loss, destruction, or deterioration of goods in transit is governed by the law of the destination. Art. 1753 of the Civil Code says: The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration. 2. The validity and effect of the seizure of goods in transit is generally governed by the law of the place where they were seized (locus regit actum) because this place was their temporary situs. 3. The disposition or alienation of the goods in transit is generally governed by the law of the place voluntarily agreed upon (lex loci voluntatis), or the law of the place intended (lex loci intentionis). The reason is evident: the disposition or alienation is effected thru a contractual obligation. In some states, however, the transfer of title to chattels is governed by the law of the place of the chattels at the time of the transfer; and his title once accrued will ordinarily be recognized in any state into which the chattels are brought. (Emery v. Clough, 63 New Hampshire 552) b.2. Choses in Action

Page 10 of 17 The following rules govern intangible personal property: 1. For the recovery of debts or for the involuntary assignment of debts (garnishment) the proper point of contract is the place where the debtor may be effectively served with summons (usually, but not always, this is the domicile of the debtor). 2.The validity of the effectiveness of a voluntary assignment of a debt depends on the lex loci voluntatis or the lex loci intentionis; in other words, the proper law of the contract controls. (p. 599, Cheshire) 3. The situs of a debt for purposes of taxation is the domicile of the creditor, and accordingly, the collectible credit may be taxed therein. (p. 281, Minor) 4. For the purposes of administering debts, the situs is the place where the assets of the debtor are actually situated. (p. 283, Minor) 5. The negotiability or the non-negotiablity of an instrument is determined by the right embodied in the instrument. (p. 561, Wolff) 6. The validity of the transfer, delivery, or negotiation of the instrument is, in general, governed by the law of the situs of the instrument at the time of transfer, delivery, or negotiation. (p. 622, Cheshire) 7. The effect on a corporation of the sale of corporate shares is governed by the law of the place of incorporation. The reason is simple: to bind the corporation, the transfer must be recorded in its books. (Beale, Foreign Corporations, Sec. 376) 8. The effect between the parties of the sale of corporate shares is governed by the lex loci voluntatis or the lex loci intentionis (the proper law of the contract) because this sale or transfer is really a contract. In many cases, the proper law of the contract is the place where the certificate is delivered. (p. 624, Cheshire)

Page 11 of 17 9. Taxation on the dividends of corporate shares is governed by the law of the place of incorporation. (Art. 417, no. 2, Civil Code) 10. Franchises are subject to the law of the place that granted them. 11. The goodwill of a business, as well as taxation thereon, is governed by the law of the place where the business is carried on. 12. Patents, copyrights, trademarks, and trade names are in the absence of a treaty protected only by the states that granted or recognized them. (p. 558, Wolff) Sec. 3 of R.A. 8293 otherwise known as the The Intellectual Property Code (IPC) provides that any foreign corporation, being a national or domiciliary of a country which is a party to a convention, treaty, or agreement relating to intellectual property rights to which the Philippines is also a party or which extends reciprocal rights to our nationals by law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention xxx. Noteworthy is the fact that the Philippines is a party as of 1965 to the Union Convention for the Protection of Industrial Property. Also, the IPC is partly the result of the mandate of the Agreement establishing the World Trade Organization (WTO) and the WTOs Agreement on the Trade Related Aspects of the Intellectual Property Rights or TRIPS (Mirpuri v. Court of Appeals, 318 SCRA 516 [1999])

III. TORTS (QUASI-DELICTS) Tort is derived from the French word torquere or to twist. (p. 498, Coquia) Our concept of tort under the New Civil Code is a blending of the Spanish culpa aquiliana and the American tort, which may be committed not only through fault or negligence, but also with malice and willful intent. (p. 130, Sempio-Diy)

Page 12 of 17 Art. 2176 of the Civil Code however retains the Spanish concept of quasi-delict and defines the term as: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this chapter. There are two important policies underlying substantive tort law: to deter socially undesirable or wrongful conduct thereby raising the standard of conduct and rectifying the consequences of the tortuous act by distributing the losses that result from accident and products liability. (Coquia, Ibid) Liability and damages for torts, in general, are governed by the lex loci delicti commissi (the law of the place where the delict or wrong or tort was committed). (p. 376, Cheshire) The common law concept of place of wrong looks to the place where the last event necessary to make an actor liable for an alleged tort occurs. (Symeonides, Problems and Dilemmas, p. 441) a. The Following are the Special Conflicts Rules in Torts: 1. If the tort is committed aboard a public vessel, whether on the high seas or in foreign territorial waters, the country to which the vessel belongs is the locus delicti; the law of the flag is thus the lex loci delicti commissii. 2. If the tort takes place aboard a private or merchant vessel on the high seas, the law of the flag is likewise the lex loci delicti commissii. 3. If the tort concerns property, whether real or personal, the lex situs is usually also the lex loci delicti commissii. (p. 475, Minor)

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4. Maritime torts a. If the colliding vessels are of the same state, or carry the same flag, said law is the lex loci delicti commissii. b. If the vessels come from the different states, whose laws however, on the matter are identical, said laws constitute the lex loci delicti commissii. c. If the vessels come from different states with different laws, the lex loci delicti commissii is the general maritime law as understood and applied by the forum where the case is tried. (The Belgenland, 114 U.S. 355; The Scotland, 105 U.S. 24) b. Modern Theories on Foreign Tort Liability: 1. The State of the Most Significant Relationship The most significant relationship approach considers the states contacts with the occurrence and the parties. Contacts such as the place where the tortious conduct occurred, place where the injuries were sustained, the domicile, residence or nationality of the victim and tortfeasor and the place where the relationship of the parties are centered serve a two-fold purpose of identifying the interested state and then evaluating the relevance of these contacts to the issue in question. (p. 505, Coquia) 2. The interest-analysis approach This approach considers the relevant concerns that two or more states may have in the case and their respective interests in applying their laws to it. (p. 133, SempioDiy) The first task of a court before which a conflict torts case is filed, is to determine whether the case involves a false or true conflict. x x x If only one state has a real interest in the case and the other states interest is insubstantial then

Page 14 of 17 there is a false conflict. However, if both states have a real interest in applying their law then the apparent conflict becomes a true conflict. (p. 511, Coquia) In short, the State which has the more relevant and weighty interests in the case should be considered the locus delicti. (p. 133-134, Sempio-Diy) 3. Cavers (Qavers) Principle of Preference Under this theory, a higher standard of conduct and financial protection given to the injured party by one State is applied by the State where the injury happened, if the latter State adopts a lower standard of conduct and financial protection to the injured. (p.134, Ibid) c. Claims for Foreign Tort A tortious liability is transitory which means that the liability resulting from the conduct is deemed personal to the perpetrator of the wrong, following him withersoever he may go, so that compensations may be exacted from him in any proper tribunal which may obtain jurisdiction of the defendants person, the right to sue not being confined to the place where the cause of action arises. (p. 475, Minor) Generally claims for damages arising from torts committed abroad may be given due course of the forum if: 1. The foreign tort must not be penal in character; 2. The enforcement of the tortious liability should not contravene our public policy; and 3. Our judicial machinery must be adequate for such enforcement. (p. 479-485, Ibid) IV. CRIMES

Page 15 of 17 In general, a crime is an act or omission punishable by law. If the transgression is against our Revised Penal Code, it is referred to as a felony; if against a special law, it is more particularly designated as an offense; and if against a local or municipal ordinance, it is known as an infraction. State punish crimes not necessarily to protect private interest but to vindicate public justice. (p. 401, Paras) a. Distinguishing Between Torts and Crime 1. Crimes are offenses against the state; torts violate private rights. (p. 498, Minor) 2. Crimes are prosecuted in the name of the state; require criminal proceedings; and insist on proof of guilt beyond reasonable doubt. Upon the other hand, tort actions are instituted in the name of the aggrieved party; the proceedings are civil in character; and mere preponderance of evidence would suffice to obtain judgment for the plaintiff. (Prosser, Torts, p. 10) 3. Punishment, reformation, exemplarity, and deterrence are the avowed purposes of the law on crimes; torts demand civil indemnification and reparation. 4. Torts are transitory in character, so that the tortfeasor can be made liable for his wrongful act in any jurisdiction where he may be found. Crimes, on the other hand, are local and can be prosecuted only in the places or states where the crime is committed. Whether an act is a tort or a crime depends on the characterization accorded the actuation in the state where it was committed. (Beale, Conflict of Laws, Vol. II, p. 1290) In the Philippines, certain acts may be both torts and crimes. Under Art. 33 of the Civil Code of the Philippines, in case of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the; criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

Page 16 of 17 Further in the Philippines, we follow as a general rule the territorial theory, and by way of exception, the protective theory (Art 2, Revised Penal Code). In other words, we cannot prosecute a crime committed abroad (like bigamy, rape, or murder) in the Philippines, because it is committed outside our territorial jurisdiction. We also follow the rule of generality in criminal law; ie., all persons, whether Filipinos or aliens, are subject to our penal law and can be prosecuted for their violations (Art. 14, Civil Code) b. Crimes Committed Aboard Public Vessels Whether the crime committed aboard a public vessel (such as battleship) took place on the high seas or within our territorial waters (or maritime zone), the country whose flag the vessel carries has jurisdiction on the theory that the vessel is an extension of the territory of the said state. (U.S. v. Fowler, 1 Phil. 14)

c. Crimes Committed Aboard Private or Merchant Vessels 1. If the crime committed aboard a private or merchant vessel occurred on the high seas, the country of the flag of the vessel has jurisdiction. 2. If the crime aboard a private or merchant vessel of a foreign state took place inside Philippine territorial waters- two theories have generally been used to determine the question of jurisdiction. The two theories are: a. The English Rule- here the territory where the crime was committed (Philippines) will have jurisdiction except: 1. in matters relating to internal order and discipline in the vessel; and 2. those which affect solely the ship and its occupants such as minor or pretty criminal offenses committed by members of the crew. (Hyde, International Law, Vol. I, p. 739)

Page 17 of 17 b. The French Rule- Under this rule, founded on the opinion of the French Council of State in 1806, the state whose flag is flown by the vessel, would have jurisdiction except if the crime affects the peace, order, security, and safety of the territory. (Brierly, The Law of Nations, p. 180) Justice Paras has something to say on the matter. He opined that the difference between the two rules is largely academic and theoretical, the two rules being essentially the same. x x x Whether we follow therefore the English or the French rule on the matter is not significant: the effect is the same. (p. 410-411, Paras) This is correct. Since a perusal of the two rules will show that the exceptions to the general rule under the English theory (which emphasizes territoriality principle) constitute the general rule under the French theory (which emphasizes nationality principle) and vice- versa. A final note is submitted however that under Art. 27 of the United Nations Convention on the Law of the Sea which the Philippines is a signatory, partly provides: 1. The criminal jurisdiction of the coastal State should not be exercised on board a foreign ship passing through the territorial sea to arrest any person or to conduct any investigation in connection with a crime committed on board the ship during its passage, save only in the following cases: a. If the consequences of the crime extend to the coastal State; b. If the crime is of a kind to disturb the peace of the country or the good order of the territorial sea; x x x This is similar to the French Rule. (p. 142, Sempio-Diy)

That in all things, God may be glorified.