I.
Insular Government vs. Frank 13 Phil 236, G.R.No.2935. March
Although generally, capacity of the parties to enter into a contract is
23, 1909.
governed by national law. This is one case not involving real property which was decided by our Supreme Court, where instead of national law, what
FACTS: In 1903 in the state of Illi nois, Mr. Frank, a US citizen and a
representative of the Insular Government of the Philippines entered into a contract whereby the former shall serve as stenographer in the Philippines for a period of 2 y ears. The contract contained a provision that i n case of violation of its terms, Mr. Frank shall be liable for the amount incurred by the Philippine Government for his travel from Chicago to Manila and onehalf salary paid during such period. After serving for 6 months, defendant left the service and refused to make further compliance with the terms of the contract, therefore the Government sued him to recover the amount of $269.23 plus damages. The lower court ruled in f avor of the plaintiff, hence
should determine capacity to enter into a contract is the lex loci celebrationis. According to Conflict of Laws writer Edgardo Paras, Frank’s
capacity should be judged by his national law and not by the law of the place where the contract was entered into. In the instant case whether it is the place where the contract was made or Frank’s nationality, the result
would be the same. However, as suggested by the mentioned author, for the conflicts rule in capacity in general, national law of the parties is controlling. II.
CADALIN vs POEA ADMINISTRATOR 238 SCRA 721
the defendant appealed presenting minority as his special defense. By reason of the fact that under the laws of the Philippines, contracts made by
“Borrowing Statute” –
person who did not reach majority age of 23 are unenforceable. Defendant
Ex: Sec. 48, Rule on Civil Procedure – “if by the laws of the State or country
claim that he is an adult when he left Chicago but was a minor when he
where the cause of action arose the action is barred, it is also barred in the
arrived in Manila and at the time the plaintiff attempted to enforce the
Philippines.”
contract. Facts: Cadalin et al. are Filipino workers recruited by Asia Int’l Builders Co. ISSUE: Whether or not the contract is valid. RULING: Mr. Frank being fully qualified to enter into a contract at the place
and time the contract was made, he cannot therefore plead infancy as a defense at the place where the contract is being enforced. Although Mr. Frank was still a minor under Philippine laws, he was nevertheless considered an adult under the laws of the state of Illinois,the place where the contract was made.No rule is better settled in law than that matters
(AIBC), a domestic recruitment corporation, for employment in Bahrain to work for Brown & Root Int’l Inc. (BRII) which is a foreign corporation with headquarters in Texas. Plaintiff instituted a class suit with the POEA for money claims arising from the unexpired portion of their employment contract which was prematurely terminated. They worked in Bahrain for BRII and they filed the suit after 1 yr. from the termination of their employment contract.
bearing upon the execution, interpretation and validity of a contract are
As provided by Art. 156 of the Amiri Decree aka as the Labor Law of the
determined by the law of the place where the contract is made. Matters
Private Sector of Bahrain: “a claim arising out of a contract of employment
connected to its performance are regulated by the law prevailing at the
shall not be actionable after the lapse of 1 year from the date of the expiry
place of its performance. Matters respecting a remedy, such as bringing of a
of the contract,” it appears that their suit has prescribed.
suit, admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is brought.
Plaintiff contends that the prescription period should be 10 years as provided by Art. 1144 of the Civil Code as their claim arise from a violation of a contract.
The POEA Administrator holds that the 10 year period of prescription should
Held: Philippine courts have jurisdiction over the suit. The stipulation shall
be applied but the NLRC provides a different view asserting that Art 291 of the Labor Code of the Phils with a 3 years prescription period should be
be liberally construed. A stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Sec 2 (b), Rule 4 of
applied. The Solicitor General expressed his personal point of view that the
the Rules of Court, in the absence of qualifying or restrictive words in the
1 yr period provided by the Amiri Decree should be applied.
agreement which indicate that the place named is the only venue agreed
Ruling: The Supreme Court held that as a general rule a foreign procedural
law will not be applied in our country as we must adopt our own procedural laws.
upon by the parties. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, have jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the right of
EXCEPTION: Philippines may adopt foreign procedural law under the
a state to exercise authority over persons and things within its boundaries
Borrowing Statute such as Sec. 48 of the Civ il Procedure Rule stating “if by
subject to certain exceptions. This authority, which finds its source in the
the laws of the State or country where the cause of action arose the action
concept of sovereignty, is exclusive within and throughout the domain of
is barred, it is also barred in the Philippines.” Thus, Bahrain law must be
the state. A state is competent to take hold of any judicial matter it sees fit
applied. However, the court contends that Bahrain’s law on prescription
by making its courts and agencies assume jurisdiction o ver all kinds of cases
cannot be applied because the court will not enforce any foreign claim that
brought before them.
is obnoxious to the forum’s public policy and the 1 yr. rule on prescription is against public policy on labor as enshrined in the Phils. Constitution. The court ruled that the prescription period applicable to the case should be Art 291 of the Labor Code of the Phils with a 3 years prescription period since the claim arose from labor employment. III.
HSBC vs SHERMAN 176 SCRA 331 (1989)
IV.
Carnival Cruise Lines, Inc. v. Shute
Brief Fact Summary. Appellees Eulala and Russel Shute, purchased tickets to
take a cruise on a vessel owned by Appellant Carnival Cruise Lines, Inc. The tickets contained language stating that the tickets were subject to the conditions of the contract, which contained a forum selection clause. When Eulala Shute was injured on the cruise ship, Appellees sued, and the forum selection clause was challenged.
Facts: Eastern Book & Supply Service (Singapore) was granted by HSBC
Singapore an overdraft facility. Sherman, et. al. and directors of Eastern
Synopsis of Rule of Law. Forum selection clauses contained in form passage
Book executed a Joint and Several Guarantee in favor of HSBC. Eastern Book
contracts are subject to judicial scrutiny for f undamental fairness.
defaulted. Hence, HSBC filed a suit for collection against them before the Regional Trial Court of Quezon City. Sherman filed a Motion to Dismiss on the ground of lack of jurisdiction ov er the complaint and persons of the defendants. The guarantee provides: “This guarantee and all rights,
obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore.”
Facts. Appellees purchased tickets for a cruise on one of the petitioner’s
ships from a travel agent in the state of Washington. The agent then forwarded the payment to the petitioner’s headquarters in Florida. On the
face of each ticket was a statement indicating that the plaintiffs were subject to the conditions of the contract, which included a forum selection clause stating that all disputes shall be litigated in Florida. During the cruise, Appellee Eulala Shute fell and hurt herself. Appellees filed suit against Appellant in the Federal court in Washington. Appellants challenged the suit
on the ground that the forum selection clause forbids litigation in any venue
Naturally, the illegitimate children, Maria Cristina and Merriam Palma,
except Florida.
opposed the wills on the ground that they were deprived of their legitime as illegitimate children. Under Philippine law, they are entitled to inherit even
Issue. Is the forum selection clause valid and enforceable? Held. Yes. A forum selection clause is to be examined for fundamental
fairness. Here, Appellant did not arbitrarily set Florida as a forum to discourage suits against it. Appellant has its principal place of business in Florida, and many of its cruises depart from and return to Florida ports.
if they are illegitimate children. They claim that Philippine law should be applied. ISSUE: What law should be applied, the Philippine law or the Texas law? May the illegitimate daughters inherit?
Further, there is no evidence that Appellant procured Appellees accession
HELD: What applies is the Texas law. Mr. Bellis is a national and domicile of
to the forum selection clause by fraud or overreaching. Appellees were
Texas at the time of his death. Hence, both the intrinsic validity of the will
made aware of the clause and accepted the contract. Hence, the forum
(substance or successional rights) and the extrinsic validity (forms of the
selection clause is valid.
will) are governed by Texas law. Since under Texas law, the decedent may
Dissent. Appellees could not have read the forum selection clause before
they received the tickets they purchased. However, once they received the
dispose of his property as he wishes, the Will should be respected. The illegitimate daughters are not entitled to any legitime.
tickets, they were nonrefundable. Hence, Appellees had to agree to the
Assuming that Texas law is in conflict of law rule providing that the
forum selection clause or not travel. Further, contract provisions that limit
domiciliary system (law of domicile) should govern, the same should not
the place or court in which an action may be brought are invalid as against
result in a reference back (renvoi) to the Philippine law since Mr. Bellis was
public policy.
both a national and domicile of Texas at the time of his death. Nonetheless,
Discussion. Forum selection clauses must be scrutinized for fundamental
if Texas law has a conflict rule, renvoi would not arise, since the properties covered by the second will are found in the Philippines. The renvoi doctrine
fairness but are generally valid. V.
BELLIS v. BELLIS (20 SCRA 358)
applied in the case of Aznar v. Garcia cannot be applied since said doctrine is pertinent where the decedent is a national of one country and domiciliary of another country. Moreover, it has been pointed out that the decedent
FACTS: Mr. Bellis was a citizen and resident of Texas at the time of his death.
executed two (2) wills- one to govern his Texas properties and the other his
He had five (5) legitimate children with his first wife, Mary Mallen, whom he
Philippine estate; the latter being the basis of the argument of illegitimate
divorced. He had three (3) legitimate daughters with his second wife, Violet,
children that he intended Philippine law to govern. Assuming that such was
who survived him, and another three (3) illegitimate children with another
the intention of the decedent in executing a separate Philippine will, it
woman. Before he died, he executed two (2) wills, disposing of his Texas
would not alter the law. As rule in Miciano v. Brimo, a provision of
properties, the other disposing his Philippine properties. In both wills, he
foreigner’s will to the effect that his properties shall be distributed in
recognized his illegitimate children but they were not given anything. Under
accordance with Philippine law and not with the national law, is illegal and
Texas law, there are no compulsory heirs or legitime reserved to illegitimate
void, for his national law cannot be ignored.
children.
VI.
AZNAR VS. GARCIA 7 S 95
Category: Civil Law Jurisprudence
The California conflict rule, found on Art. 946 of the California Civil code States that “if there is no law to the contrary in the place where personal
property is situated, it is deemed to follow the decree of its owner and is
Facts: Edward S. Christensen, though born in New York, migrated to
governed by the law of the domicile.”
California where he resided and consequently was considered a California Citizen for a period of nine years to 1913. He came to the Philippines where
Christensen being domiciled outside California, the law of his domicile, the
he became a domiciliary until the time of his death. However, during the
Philippines is ought to be followed.
entire period of his residence in this country, he had always considered
Wherefore, the decision appealed is reversed and case is remanded to the
himself as a citizen of California.
lower court with instructions that partition be made as that of the Philippine
In his will, executed on M arch 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy Christensen as his only heir but left a legacy of some money in favor of Helen Christensen Garcia who, in a decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his. Counsel of Hel en claims that under Art. 16 (2) of the civil code, California law should be applied, the matter is returned back to the law of domicile, that Philippine law is ultimately applicable, that the share of Helen must be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand, counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of the deceased must apply, our courts must apply internal law of California on the matter. Under California law, there are no compulsory heirs and consequently a testator should dispose any property possessed by him in absolute dominion. Issue: Whether Philippine Law or California Law should apply. Held: The Supreme Court deciding to grant more successional rights to
Helen Christensen Garcia said in effect that there be two rules in California on the matter. 1.
The conflict rule which should apply to Californian’s outside the
California, and 2.
The internal Law which should apply to California domiciles in
California.
law provides.
