Huntington v.

Attrill (not sure of this one, its the common problem of foreign jurisprudence just read)

JUDGES: The Lord Chancellor (Lord Halsbury), Lord Watson, Lord Bramwell, Lord Hobhouse, Lord Morris,
and Lord Shand.

COUNSEL: Sir Horace Davey, Q.C., Finlay, Q.C., and Pollard, for the appellant .
The Attorney General (Sir R. Webster), Goreand Ackwith, for the respondent.

SOLICITORS: For appellant: Freshfields & Williams. Solicitors

For respondent: Harrison & Powell.

DATES: 1891 Nov. 18; Dec. 9; 1892 Feb. 17

On Appeal from the Supreme Court of Appeal for Ontario.

International LawForeign JudgmentPenal ActionsDistinction between Public and Private Penalties.

To an action by the appellant in an Ontario Court upon a judgment of a New York Court against the
respondent under sect 21 of New York State laws of 1875, c. 611, which imposes liability in respect of
false representations, the latter pleaded that the judgment was for a penalty inflicted by the municipal
law of New York, and that the action, being of a penal character, ought not to be entertained by a foreign
Court: Held, that the action being by a subject to enforce in his own interest a liability imposed for the
protection of his private rights, was remedial, and not penal in the sense pleaded. It was not within the
rule of international law which prohibits the Courts of one country from executing the penal laws of
another or enforcing penalties recoverable in favour of the State:

Held, further, that it was the duty of the Ontario Court to decide whether the statute in question was
penal within the meaning of the international rule so as to oust its jurisdiction; and that such Court was
not bound by the interpretation thereof adopted by the Courts of New York.

APPEAL from a decree of the Court of Appeal (Jan. 13, 1891) affirming a decree of Street, J. (Sept. 15,
1888), and dismissing the appellants action.

The facts and proceedings are stated in the judgment of their Lordships. The judgment of Street, J., is
reported in 17 Ontario Reports, 245, and the judgments in the Appeal Court are reported in 18 Ontario
Appeal Reports, 136.

Street, J., held that, according to international law, penalties imposed by statute can only be enforced in
the tribunals of the State by the laws of which they are imposed, and that the principle applies to actions
upon judgments for such penalties. He further held that the claim this case was an action for
a [*151] penalty within the above rule, basing his opinion upon New York decisions to that effect.

In the Appeal Court the judges were equally divided in opinion. Burton and Maclennan, JJ.A., held that the
question whether the action in New York was for a penalty or not was concluded by the decisions of the
New York Courts. Hagarty, C.J., while agreeing that no action is maintainable on the judgment of a foreign
State in respect of a penalty inflicted by the laws of such State, dissented from the decisions of the New
York Courts, and held that the liability imposed by the statute in question was not a liability in the nature
of a penalty. Osler, J.A., agreeing with the conclusion of Hagarty, C.J., held that the liability in question
could not be regarded as a penal liability within the meaning of the principles of international law in
question, and consequently that the action was maintainable. He was of opinion, however, that no action
would have been maintainable in the Canadian Courts upon the cause of action, in respect of which the
judgment was given in the New York Supreme Court.

Sir Horace Davey, Q.C., Finlay, Q.C., and Pollard, for the appellant, contended that the liability imposed by
the New York State Act was not a liability in the nature of a penalty within the meaning of those provisions
of international law which prohibit courts of justice from enforcing penalties inflicted by the laws of a
foreign State. The action on the judgment obtained by the appellant accordingly was maintainable. The
judgment had been obtained in respect of a liability incurred by the respondent for all the debts of a
company under sect. 21 of the New York Act. That liability was in reality and under all the circumstances
contractual, and not by way of penalty, and the action in which it was enforced was not a penal action,
but one by which a private remedy was sought to be enforced. The appellant contracted with the
company, on the faith of the liability imposed in his favour as the respondent, by sect. 21. That liability
resulted in debt by the respondent. [LORD BRAMWELL: What provision as to limitation would have
applied to the case?] The ordinary provision with regard to [*152] debt. The action was a civil remedy to
enforce payment of debt, not to enforce a penalty due to the public, nor even for the recovery of damages.
By the law of the State of New York the action was not a penal action. Nor was it such by the law of the
Ontario Court, which ought to decide by the principles of English law whether an action on such a
judgment was maintainable against the respondent. By the law of England such action is maintainable;
being brought on a judgment of a Court of competent jurisdiction creating an obligation on the part of
the judgment debtor to pay the amount. Reference was made to Godard v. Gray [FN1]. With regard to
penal laws, Whartons Law Lexicon defines them as of three kinds: poena pecuniaria, poena corporalis,
and poena exilii, all prohibiting an act, and imposing a penalty for the commission of it. Penal actions are
those brought by a common informer, or by the public authority, to redress a public wrong; remedial
actions are those brought by the party injured to redress a private wrong. See Bones v.
Booth [FN2]; Hussey v. More [FN3]; Earl Spencer v. Swannell [FN4]; and for American
authorities, Merchants Bank v. Bliss [FN5]; Stokes v. Stickney [FN6]. Reference was also made to the
judgments of the two dissentient judges in Attrill v. Huntington [FN7]; Steam Engine Company v.
Hubbard [FN8]; Flash v. Conn [FN9].

The Attorney General (Sir R. Webster), Goreand Ackwith, for the respondent, contended that, according
to principles of international law, the judgment sued on created no obligation on the part of the
respondent which a foreign State will recognise. The Courts of the country where the judgment is sued on
must judge for themselves as to the nature of the judgment, although in doing so they will pay great
regard to any decisions of the Courts of the country where the judgment was passed, and to the reasons
on which such decisions proceed. It was contended that this judgment was of a punitive or penal nature,
and as such was enforceable only by the Courts of New York. Here, [*153] by universal consent of all the
Courts of the country where the Act and the judgment were passed, an action of this kind has been treated
as penal. They held that a liability of the kind sought to be enforced in this case is in the nature of a penalty,
that it bears no relation to the actual loss or damage sustained by the party to whom the action is given,
that it is punitive in its nature and is inflicted upon grounds of public policy. Reference was made
to Merchants Bank v. Bliss [FN10]; Wiles v. Suydam [FN11]; Easterly v. Barber [FN12]; Knox v.
Baldwin [FN13]; Veeder v. Baker [FN14]. In those and other cases, causes of action of this nature have
been held to be within a New York Statute of Limitationapplicable solely to actions for penalties.
Reference was also made to Jones v. Jones [FN15]; Hobbs v. Hudson [FN16]; Attrill v.
Huntington [FN17]; First National Bank of Plymouth v. Price [FN18]; Steam Engine Company v.
Hubbard [FN19]; State of Wisconsin v. Pelican Insurance Company [FN20]; De Brimont v.
Penniman [FN21]; Robinson v. Currey [FN22]; The Halley [FN23].

[1892 Feb. 17.] The judgment of their Lordships was delivered by

LORD WATSON:

The appellant, in June, 1880, became a creditor for money lent to the Rockaway Beach Improvement
Company, Limited, which carried on business in the State of New York, being incorporated pursuant to
Chapter 611 of the State laws of 1875.

Sect. 21 of the Act provides that: If any certificate or report made, or public notice given, by the officers
of any such corporation, shall be false in any material representation, all the officers who shall have signed
the same shall be jointly and severally liable for all the debts of the corporation contracted while they are
officers thereof.

[*154] The respondent was, in June, 1880, a director, and in that capacity an officer of the company within
the meaning of the statute. On the 30th of that month he, along with other officers of the company,
signed and verified on oath, as prescribed by sect. 37, a certificate setting forth that the whole capital
stock had, at its date, been paid up in cash.

In the year 1883, the appellant instituted a suit against the respondent before the Supreme Court of New
York State for the unpaid balance of his loan to the company, alleging that the certificate contained
representations which were material and false, and that the respondent had incurred personal
responsibility for the debt as provided by sect. 21. The respondent defended the action; but, a verdict
having been found against him, the Court, on the 15th of June, 1886, gave final judgment, ordering him
to pay to the appellant the sum of $100,240.

Having failed to recover payment, the appellant, in September, 1886, brought an action upon his decree
in the Common Pleas Division of the High Court of Justice for the Province of Ontario, where the
respondent resided. The only plea stated in defence was to the effect that the judgment sued on was for
a penalty inflicted by the municipal law of New York; and that the action being one of a penal character
ought not to be entertained by the Courts of a foreign State.

Mr. Justice Street, who tried the case, being of opinion that the enactments of sect. 21 were strictly
punitive and not remedial, dismissed the action with costs. The judges of the Appeal Court were equally
divided in opinion, the result being that the appeal taken from his decision was dismissed. The Chief
Justice (Hagarty) and Mr. Justice Osler were of opinion that the statutory remedy given to the appellant
as a creditor of the company being civil only, and not enforceable by the State or by the public, was not a
penal matter in the sense of international law. Mr. Justice Burton was of the same opinion, but held
himself precluded from giving effect to it for reasons which he thus explains: The Courts of the State of
New York have placed an interpretation upon this particular statute in which I should not have agreed;
but those decisions are the law of the State of New York, and with that we are dealing. I am of
opinion, [*155] therefore, that on that undisputed expert testimony this is a penal statute there, and the
judgment obtained upon it cannot be enforced here. In the conclusion thus stated, Mr. Justice
Maclennan expressed his concurrence. But the learned judge, in that respect agreeing with the Court of
First Instance and differing from the other members of the Court of Appeal, held that the enactment was
in itself undoubtedly penal, inasmuch as it was passed in the public interest, providing a punishment for
an offence, and that it makes no difference that what it exacts from the offender is given to persons
who are ordinary creditors of a company in payment of their respective debts.

Their Lordships cannot assent to the proposition that, in considering whether the present action was penal
in such sense as to oust their jurisdiction, the Courts of Ontario were bound to pay absolute deference to
any interpretation which might have been put upon the Statute of 1875 in the State of New York. They
had to construe and apply an international rule, which is a matter of law entirely within the cognizance of
the foreign Court whose jurisdiction is invoked. Judicial decisions in the State where the cause of action
arose are not precedents which must be followed, although the reasoning upon which they are founded
must always receive careful consideration, and may be conclusive. The Court appealed to must determine
for itself, in the first place, the substance of the right sought to be enforced; and, in the second place,
whether its enforcement would, either directly or indirectly, involve the execution of the penal law of
another State. Were any other principle to guide its decision, a Court might find itself in the position of
giving effect in one case and denying effect in another, to suits of the same character, in consequence of
the causes of action having arisen in different countries; or in the predicament of being constrained to
give effect to laws which were, in its own judgment, strictly penal.

The general law upon this point has been correctly stated by Mr. Justice Story in his Conflict of Laws,
and by other text writers; but their Lordships do not think it necessary to quote from these authorities in
explanation of the reasons which have induced courts of justice to decline jurisdiction in suits somewhat
loosely described as penal, when these have their origin in a [*156] foreign country. The rule has its
foundation in the well-recognised principle that crimes, including in that term all breaches of public law
punishable by pecuniary mulct or otherwise, at the instance of the State Government, or of some one
representing the public, are local in this sense, that they are only cognizable and punishable in the country
where they were committed. Accordingly no proceeding, even in the shape of a civil suit, which has for its
object the enforcement by the State, whether directly or indirectly, of punishment imposed for such
breaches by the lex fori, ought to be admitted in the Courts of any other country.

Their Lordships have already indicated that, in their opinion, the phrase penal actions, which is so
frequently used to designate that class of actions which, by the law of nations, are exclusively assigned to
their domestic forum, does not afford an accurate definition. In its ordinary acceptation, the word penal
may embrace penalties for infractions of general law which do not constitute offences against the State;
it may for many legal purposes be applied with perfect propriety to penalties created by contract; and it
therefore, when taken by itself, fails to mark that distinction between civil rights and criminal wrongs
which is the very essence of the international rule. The phrase was used by Lord Loughborough and by
Mr. Justice Buller in a well-known case (Folliott v. Ogden [FN24], and Ogden v. Folliott [FN25]), and also
by Chief Justice Marshall, who, in The Antelope [FN26], thus stated the rule with no less brevity than force:
The Courts of no country execute the penal laws of another. Read in the light of the context, the
language used by these eminent lawyers is quite intelligible, because they were dealing with the
consequences of violations of public law and order, which were unmistakably of a criminal complexion.
But the expressions penal and penalty, when employed without any qualification, express or implied,
are calculated to mislead, because they are capable of being construed so as to extend the rule to all
proceedings for the recovery of penalties, whether exigible by the State in the interest of the community,
or by private persons in their own interest.
 [*157] The Supreme Court of the United States had occasion to consider the international rule
in Wisconsin v. the Pelican Insurance Company [FN27]. By the statute law of the State of Wisconsin, a
pecuniary penalty was imposed upon corporations carrying on business under it who failed to comply
with one of its enactments. The penalty was recoverable by the commissioner of insurance, an official
entrusted with the administration of the Act in the public interest, one half of it being payable into the
State Treasury, and the other to the commissioner, who was to defray the costs of prosecution. It was
held that the penalty could not be enforced by the Federal Court, or the judiciary of any other State. In
delivering the judgment of the bench, Mr. Justice Gray, after referring to the text books, and the dictum
by Chief Justice Marshall already cited, went on to say:

The rule that the Courts of no country execute the law of another applies not only to prosecutions and
sentences for crimes and misdemeanors, but to all suits in favour of the State for the recovery of pecuniary
penalties for any violation of statutes for the protection of its revenue or other municipal laws, and to all
judgments for such penalties.

Their Lordships do not hesitate to accept that exposition of the law, which, in their opinion, discloses the
proper test for ascertaining whether an action is penal within the meaning of the rule. A proceeding, in
order to come within the scope of the rule, must be in the nature of a suit in favour of the State whose
law has been infringed. All the provisions of Municipal Statutes for the regulation of trade and trading
companies are presumably enacted in the interest and for the benefit of the community at large; and
persons who violate these provision are, in a certain sense, offenders against the State law, as well as
against individuals who may be injured by their misconduct. But foreign tribunals do not regard these
violations of statute law as offences against the State, unless their vindication rests with the State itself,
or with the community which it represents. Penalties may be attached to them, but that circumstance will
not bring them within the rule, except in cases where these penalties are recoverable at the instance of
the State, or of an [*158] official duly authorized to prosecute on its behalf, or of a member of the public
in the character of a common informer. An action by the latter is regarded as an actio popularis pursued,
not in his individual interest, but in the interest of the whole community.

The New York Statute of 1875 provides for the organization and regulation of corporations formed for the
purpose of carrying on all kinds of lawful business with the exception of certain branches therein specified.
It confers rights and privileges upon persons who choose to form a trading association, and to become
incorporated under its provisions, with full or with limited liability; and, in either case, it varies and limits
the rights and remedies which, under the common law, would have been available to creditors of the
association, as against its individual members. On the other hand, for the protection of those members of
the public who may deal with the corporation, the Act imposes upon its directors and officers various
stringent obligations, the plain object of which is to make known, from time to time, to all concerned, the
true condition of its finances. Thus they are required (sect. 18) to publish an annual report stating the
amount of capital, the proportion actually paid in, the amount and nature of existing assets and debts,
the names of the shareholders and the dividends, if any, declared since last report; and (sect. 37) to certify
the amount of capital stock paid in within thirty days after payment of the last instalment. In both cases
the consequence of the report or certificate being false in any material representation, is that every
director or officer who vouched its accuracy becomes, under sect. 21, liable personally for all the debts of
the corporation contracted during his period of office.
The provisions of sect. 21 are in striking contrast to the enactments of sect. 34, which inflicts a penalty of
$100 upon every director or officer of a corporation with limited liability, who authorises or permits the
omission of the word limited from its seal, official publications, or business documents. In that case, the
penalty is recoverable in the name of the people of the State of New York by the district attorney of the
county in which the principal office of such corporation is located, and the amounts recovered shall be
paid over to the proper [*159] authorities for the support of the poor of such county. It does not admit
of doubt that an action by the district attorney would be a suit in favour of the State, and that neither the
penalty, nor the decree of a New York Court for its amount, could be enforced in a foreign country.

In one aspect of them, the provisions of sect. 21 are penal in the wider sense in which the term is used.
They impose heavy liabilities upon directors, in respect of failure to observe statutory regulations for the
protection of persons who have become or may become creditors of the corporation. But, in so far as
they concern creditors, these provisions are in their nature protective and remedial. To use the language
of Mr. Justice Osler, they give a civil remedy only to creditors whose rights the conduct of the companys
officers may have been calculated to injure, and which is not enforceable by the State or the public. In
the opinion of their Lordships, these enactments are simply conditions upon which the Legislature permits
associations to trade with corporate privileges, and constitute an implied term of every contract between
the corporation and its creditors.

A number of American authorities were cited in the course of the argument, which may be briefly noticed,
seeing that they were made the subject of comment in both Courts below. With one exception, they do
not appear to their Lordships to have a direct or material bearing upon the point raised in this appeal.

In Steam Engine Company v. Hubbard [FN28] the facts were these. The law of Connecticut, in the event
of the president and secretary of a corporation intentionally neglecting to issue a certain certificate, made
them jointly and severally liable for all debts contracted during the period of such neglect. Under that
provision an action was brought by a creditor of the corporation against its president, for a debt
contracted before the period of neglect began, which remained unpaid during its continuance. There was
no question as to enforcing the claim in another State. The Supreme Court of the States held that the
enactment was penal, and, therefore, to be strictly [*160] construed; and also that the president was not
liable, inasmuch as the debt was not contracted during the period of his default. The decision appears to
be absolutely right; but their Lordships apprehend that the canon of construction applied in that case
would be equally applicable to the case of penalty stipulated by bond, or in a mercantile contract.

Flash v. Conn [FN29], another decision of the Supreme Federal Court, was relied on by the appellant. In
that case a New York Statute of 1848 had provided that, until the whole capital stock of the corporation
was paid up, every stockholder should be liable to its creditors to an amount equal to the amount of stock
held by them. It was decided that the claim of a creditor under that provision was contractual and not
penal, and might therefore be enforced by an action at law. The result appears to be inevitable, because
the liability was not imposed in respect of failure to perform any duty prescribed by the Act; but it throws
no light upon the present question.

The respondent, in his argument, placed great reliance upon Merchants Bank v. Bliss [FN30], which was
decided in 1866. The statute of 1848, already referred to, required the trustees of the corporation to make
a report at a stated period, and, in the event of their failure to do so, rendered them jointly and severally
liable for all its debts then existing, or which might be contracted before the report was actually made.
The suit was by a creditor against a defaulting trustee, and the only question raised was this - whether the
action was for a liability created by statute, other than penalty or forfeiture, within the meaning of the
Statute of Limitations, or for a penalty or forfeiture, when action is given to the party aggrieved? The
Supreme Court of New York decided that the liability belonged to the second category, and that suit was
consequently barred by the lapse of three years. In another case, Wiles v. Suydam [FN31], the same Court
held that a similar claim by a creditor, being for a statutory penalty or forfeiture, could not be joined in a
declaration with a claim upon contract. Their Lordships see no reason to question the propriety of these
decisions, but [*161] it is hardly necessary to say that a delict may give rise to a purely civil remedy, as
well as to criminal punishment. Although a right of action is given to the party aggrieved, it does not follow
that the law of nations must regard his action as a suit in favour of the State.

Attrill v. Huntington [FN32] is, however, an authority upon the very point raised in this appeal. During the
dependence of the present action, the appellant preferred a bill in equity, before the Supreme Court of
the State of Maryland, to set aside certain transfers of stock by the respondent, upon the allegation that
they were fraudulently made in order to defeat his claims under the decree of June, 1886. The primary
judge granted the relief craved, but the Court of Appeal, by a majority of five judges against two, reversed
his decision and dismissed the bill, holding that the decree, being for a penalty, could not be enforced
beyond the limits of the State of New York. Their Lordships are constrained to differ from the reasons
assigned by Mr. Justice Bryan in delivering the judgment of the majority, which do not appear to them
sufficiently to recognize the distinction, from an international point of view, between a suit for penalty by
a private individual in his own interest, and a suit brought by the government or people of a state for the
vindication of public law. The distinction is clearly pointed out in the opinion of the dissentient judges as
expressed by Mr. Justice Stone, in whose reasoning their Lordships concur.

FN32 70 Maryland, 191.

Being of opinion that the present action is not, in the sense of international law, penal, or, in other words,
an action on behalf of the government or community of the State of New York, for punishment of an
offence against their municipal law, their Lordships will humbly advise Her Majesty to reverse the
judgments appealed from, and to give decree in favour of the appellant, with costs in both Courts below.
The appellant must have the costs of this appeal.

Bellis vs Bellis, G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased, PEOPLES BANK & TRUST COMPANY,
executor, MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants, VS.
EDWARD A. BELLIS, ET. AL., heir-appellees
G.R. No. L-23678 June 6, 1967

FACTS:
Amos Bellis, born in Texas, was a citizen of the State of Texas and of the United States. He had 5 legitimate
children with his wife, Mary Mallen, whom he had divorced, 3 legitimate children with his 2nd wife, Violet
Kennedy and finally, 3 illegitimate children.
Prior to his death, Amos Bellis executed a will in the Philippines in which his distributable estate should
be divided in trust in the following order and manner:

a. $240,000 to his 1st wife Mary Mallen;

b. P120,000 to his 3 illegitimate children at P40,000 each;
c. The remainder shall go to his surviving children by his 1st and 2nd wives, in equal shares.

Subsequently, Amos Bellis died a resident of San Antonio, Texas, USA. His will was admitted to probate in
the Philippines. The Peoples Bank and Trust Company, an executor of the will, paid the entire bequest
therein.

Preparatory to closing its administration, the executor submitted and filed its Executors Final Account,
Report of Administration and Project of Partition where it reported, inter alia, the satisfaction of the
legacy of Mary Mallen by the shares of stock amounting to $240,000 delivered to her, and the legacies of
the 3 illegitimate children in the amount of P40,000 each or a total of P120,000. In the project partition,
the executor divided the residuary estate into 7 equal portions
for the benefit of the testators 7 legitimate children by his 1st and 2nd marriages.

Among the 3 illegitimate children, Mari Cristina and Miriam Palma Bellis filed their respective opposition
to the project partition on the ground that they were deprived of their legitimates as illegitimate children.

The lower court denied their respective motions for reconsideration.

ISSUE:
Whether Texan Law or of Philippine Law must apply.

RULING:
It is not disputed that the decedent was both a national of Texas and a domicile thereof at the time of his
death. So that even assuming Texan has a conflict of law rule providing that the same would not result in
a reference back (renvoi) to Philippine Law, but would still refer to Texas Law.

Nonetheless, if Texas has conflict rule adopting the situs theory (lex rei sitae) calling for the application of
the law of the place where the properties are situated, renvoi would arise, since the properties here
involved are found in the Philippines. In the absence, however of proofs as to the conflict of law rule of
Texas, it should not be presumed different from our appellants, position is therefore not rested on the
doctrine of renvoi.

The parties admit that the decedent, Amos Bellis, was a citizen of the State of Texas, USA and that under
the Laws of Texas, there are no forced heirs or legitimates. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional rights has to be determined under Texas Law, the
Philippine Law on legitimates can not be applied to the testate of Amos Bellis.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied by
this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent
where the decedent is a national of one country, and a domicile of another. In the present case, it is not
disputed that the decedent was both a national of Texas and a domicile thereof at the time of his
death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary system (law
of the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law,
but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex
rei sitae) calling for the application of the law of the place where the properties are situated, renvoi would
arise, since the properties here involved are found in the Philippines. In the absence, however, of proof
as to the conflict of law rule of Texas, it should not be presumed different from ours.3 Appellants position
is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in
their arguments. Rather, they argue that their case falls under the circumstances mentioned in the third
paragraph of Article 17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in
intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the
amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity to
succeed. They provide that

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the
amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated
by the national law of the person whose succession is under consideration, whatever may be the nature
of the property and regardless of the country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that

Prohibitive laws concerning persons, their acts or property, and those which have for their object public
order, public policy and good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely,
Congress deleted the phrase, notwithstanding the provisions of this and the next preceding article when
they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while reproducing without
substantial change the second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must have
been their purpose to make the second paragraph of Art. 16 a specific provision in itself which must be
applied in testate and intestate succession. As further indication of this legislative intent, Congress added
a new provision, under Art. 1039, which decrees that capacity to succeed is to be governed by the national
law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our System of
legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it has
specifically chosen to leave, inter alia, the amount of successional rights, to the decedents national law.
Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills one to govern his Texas estate
and the other his Philippine estate arguing from this that he intended Philippine law to govern his
Philippine estate. Assuming that such was the decedents intention in executing a separate Philippine will,
it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigners will to the effect that his properties shall be distributed in accordance with Philippine law and
not with his national law, is illegal and void, for his national law cannot be ignored in regard to those
matters that Article 10 now Article 16 of the Civil Code states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that
under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of
the provision of the will and the amount of successional rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.

WHEREFORE, the order of the probate court is hereby AFFIRMED in toto, with costs against appellants.
So ordered.

SPOUSES ZALAMEA and LIANA ZALAMEA vs. CA and TRANSWORLD AIRLINES, INC.
G.R. No. 104235 November 18, 1993

FACTS:

Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and their daughter, Liana purchased 3 airline
tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight to New York to Los
Angeles. The tickets of petitioners-spouses were purchased at a discount of 75% while that of their
daughter was a full fare ticket. All three tickets represented confirmed reservations.

On the appointed date, however, petitioners checked in but were placed on the wait-list because the
number of passengers who had checked in before them had already taken all the seats available on the
flight. Out of the 42 names on the wait list, the first 22 names were eventually allowed to board the flight
to Los Angeles, including petitioner Cesar Zalamea. The two others were not able to fly. Those holding
full-fare tickets were given first priority among the wait-listed passengers. Mr. Zalamea, who was holding
the full-fare ticket of his daughter, was allowed to board the plane; while his wife and daughter, who
presented the discounted tickets were denied boarding.

Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be accommodated
because it was also fully booked. Thus, they were constrained to book in another flight and purchased
two tickets from American Airlines. Upon their arrival in the Philippines, petitioners filed an action for
damages based on breach of contract of air carriage before the RTC- Makati. The lower court ruled in
favor of petitioners . CA held that moral damages are recoverable in a damage suit predicated upon a
breach of contract of carriage only where there is fraud or bad faith. Since it is a matter of record that
overbooking of flights is a common and accepted practice of airlines in the United States and is specifically
allowed under the Code of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith could
be imputed on respondent TransWorld Airlines. Thus petitioners raised the case on petition for review on
certiorari.

ISSUE;
WON TWZ acted with bad faith and would entitle Zalameas to Moral and Examplary damages.

RULING:
The U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign laws do not
prove themselves nor can the courts take judicial notice of them. Like any other fact, they must be alleged
and proved. Written law may be evidenced by an official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his deputy, and accompanied with a certificate that
such officer has custody. The certificate may be made by a secretary of an embassy or legation, consul
general, consul, vice-consul, or consular agent or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer service agent, in
her deposition that the Code of Federal Regulations of the Civil Aeronautics Board allows overbooking.
No official publication of said code was presented as evidence. Thus, respondent courts finding that
overbooking is specifically allowed by the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to the case at
bar in accordance with the principle of lex loci contractus which require that the law of the place where
the airline ticket was issued should be applied by the court where the passengers are residents and
nationals of the forum and the ticket is issued in such State by the defendant airline. Since the tickets
were sold and issued in the Philippines, the applicable law in this case would be Philippine law.

Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the passengers
concerned to an award of moral damages. In Alitalia Airways v. Court of Appeals, where passengers with
confirmed bookings were refused carriage on the last minute, this Court held that when an airline issues
a ticket to a passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and
the passenger has every right to expect that he would fly on that flight and on that date. If he does not,
then the carrier opens itself to a suit for breach of contract of carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of their seats in case all of them would
show up for the check in. For the indignity and inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral damages.

For a contract of carriage generates a relation attended with public duty a duty to provide public service
and convenience to its passengers which must be paramount to self-interest or enrichment.

Respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it could breach
the contract of carriage even if they have confirmed tickets if there was overbooking. Respondent TWA
should have incorporated stipulations on overbooking on the tickets issued or to properly inform its
passengers about these policies so that the latter would be prepared for such eventuality or would have
the choice to ride with another airline.

Respondent TWA was also guilty of not informing its passengers of its alleged policy of giving less priority
to discounted tickets. Neither did it present any argument of substance to show that petitioners were
duly apprised of the overbooked condition of the flight or that there is a hierarchy of boarding priorities
in booking passengers. It is evident that petitioners had the right to rely upon the assurance of respondent
TWA, thru its agent in Manila, then in New York, that their tickets represented confirmed seats without
any qualification. The failure of respondent TWA to so inform them when it could easily have done so
thereby enabling respondent to hold on to them as passengers up to the last minute amounts to bad faith.
Evidently, respondent TWA placed its self-interest over the rights of petitioners under their contracts of
carriage. Such conscious disregard of petitioners rights makes respondent TWA liable for moral damages.
To deter breach of contracts by respondent TWA in similar fashion in the future, we adjudge respondent
TWA liable for exemplary damages, as well.

In the case of Alitalia Airways v. Court of Appeals, this Court explicitly held that a passenger is entitled to
be reimbursed for the cost of the tickets he had to buy for a flight to another airline. Thus, instead of
simply being refunded for the cost of the unused TWA tickets, petitioners should be awarded the actual
cost of their flight from New York to Los Angeles.

WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court of Appeals is
hereby MODIFIED

( I did not bother this one to digest because the case is quite short and all issues are related to our
subject matter).

G.R. No. 138322 October 2, 2001

GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner,

vs.

REDERICK A. RECIO, respondents.

DECISION

PANGANIBAN, J.:

A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid
according to the national law of the foreigner. However, the divorce decree and the governing personal
law of the alien spouse who obtained the divorce must be proven. Our courts do not take judicial notice
of foreign laws and judgment; hence, like any other facts, both the divorce decree and the national law of
the alien must be alleged and proven according to our law on evidence.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to nullify the January 7,
1999 Decision1 and the March 24, 1999 Order2 of the Regional Trial Court of Cabanatuan City, Branch 28,
in Civil Case No. 3026-AF. The assailed Decision disposed as follows:

WHEREFORE, this Court declares the marriage between Grace J. Garcia and Rederick A. Recio solemnized
on January 12, 1994 at Cabanatuan City as dissolved and both parties can now remarry under existing and
applicable laws to any and/or both parties.3

The assailed Order denied reconsideration of the above-quoted Decision.

The Facts
Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in Malabon, Rizal, on
March 1, 1987.4 They lived together as husband and wife in Australia. On May 18, 1989,5 a decree of
divorce, purportedly dissolving the marriage, was issued by an Australian family court.

On June 26, 1992, respondent became an Australian citizen, as shown by a Certificate of Australian
Citizenship issued by the Australian government.6 Petitioner a Filipina and respondent were married
on January 12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan City.7 In their application for a
marriage license, respondent was declared as single and Filipino.8

Starting October 22, 1995, petitioner and respondent lived separately without prior judicial dissolution of
their marriage. While the two were still in Australia, their conjugal assets were divided on May 16, 1996,
in accordance with their Statutory Declarations secured in Australia.9

On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage10 in the court a quo,
on the ground of bigamy respondent allegedly had a prior subsisting marriage at the time he married
her on January 12, 1994. She claimed that she learned of respondents marriage to Editha Samson only in
November, 1997.

In his Answer, respondent averred that, as far back as 1993, he had revealed to petitioner his prior
marriage and its subsequent dissolution.11 He contended that his first marriage to an Australian citizen
had been validly dissolved by a divorce decree obtained in Australian in 1989;12 thus, he was legally
capacitated to marry petitioner in 1994.

On July 7, 1998 or about five years after the couples wedding and while the suit for the declaration of
nullity was pending respondent was able to secure a divorce decree from a family court in Sydney,
Australia because the marriage ha[d] irretrievably broken down.13

Respondent prayed in his Answer that the Complained be dismissed on the ground that it stated no cause
of action.14 The Office of the Solicitor General agreed with respondent.15 The court marked and admitted
the documentary evidence of both parties.16 After they submitted their respective memoranda, the case
was submitted for resolution.17

Thereafter, the trial court rendered the assailed Decision and Order.

Ruling of the Trial Court

The trial court declared the marriage dissolved on the ground that the divorce issued in Australia was valid
and recognized in the Philippines. It deemed the marriage ended, but not on the basis of any defect in an
essential element of the marriage; that is, respondents alleged lack of legal capacity to remarry. Rather,
it based its Decision on the divorce decree obtained by respondent. The Australian divorce had ended the
marriage; thus, there was no more martial union to nullify or annual.

Hence, this Petition.18

Issues

Petitioner submits the following issues for our consideration:

1
The trial court gravely erred in finding that the divorce decree obtained in Australia by the respondent ipso
facto terminated his first marriage to Editha Samson thereby capacitating him to contract a second
marriage with the petitioner.

The failure of the respondent, who is now a naturalized Australian, to present a certificate of legal capacity
to marry constitutes absence of a substantial requisite voiding the petitioner marriage to the respondent.

The trial court seriously erred in the application of Art. 26 of the Family Code in this case.

The trial court patently and grievously erred in disregarding Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family
Code as the applicable provisions in this case.

The trial court gravely erred in pronouncing that the divorce gravely erred in pronouncing that the divorce
decree obtained by the respondent in Australia ipso facto capacitated the parties to remarry, without first
securing a recognition of the judgment granting the divorce decree before our courts.19

The Petition raises five issues, but for purposes of this Decision, we shall concentrate on two pivotal ones:
(1) whether the divorce between respondent and Editha Samson was proven, and (2) whether respondent
was proven to be legally capacitated to marry petitioner. Because of our ruling on these two, there is no
more necessity to take up the rest.

The Courts Ruling

The Petition is partly meritorious.

First Issue:

Proving the Divorce Between Respondent and Editha Samson

Petitioner assails the trial courts recognition of the divorce between respondent and Editha Samson.
Citing Adong v. Cheong Seng Gee,20 petitioner argues that the divorce decree, like any other foreign
judgment, may be given recognition in this jurisdiction only upon proof of the existence of (1) the foreign
law allowing absolute divorce and (2) the alleged divorce decree itself. She adds that respondent
miserably failed to establish these elements.

Petitioner adds that, based on the first paragraph of Article 26 of the Family Code, marriages solemnized
abroad are governed by the law of the place where they were celebrated (the lex loci celebrationis). In
effect, the Code requires the presentation of the foreign law to show the conformity of the marriage in
question to the legal requirements of the place where the marriage was performed.

At the outset, we lay the following basic legal principles as the take-off points for our discussion. Philippine
law does not provide for absolute divorce; hence, our courts cannot grant it.21 A marriage between two
Filipinos cannot be dissolved even by a divorce obtained abroad, because of Articles 15 22 and 1723 of the
Civil Code.24 In mixed marriages involving a Filipino and a foreigner, Article 2625 of the Family Code allows
the former to contract a subsequent marriage in case the divorce is validly obtained abroad by the alien
spouse capacitating him or her to remarry.26 A divorce obtained abroad by a couple, who are both aliens,
may be recognized in the Philippines, provided it is consistent with their respective national laws.27

A comparison between marriage and divorce, as far as pleading and proof are concerned, can be
made. Van Dorn v. Romillo Jr. decrees that aliens may obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid according to their national law.28 Therefore, before a foreign
divorce decree can be recognized by our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it.29 Presentation solely of the divorce decree is
insufficient.

Divorce as a Question of Fact

Petitioner insists that before a divorce decree can be admitted in evidence, it must first comply with the
registration requirements under Articles 11, 13 and 52 of the Family Code. These articles read as follows:

ART. 11. Where a marriage license is required, each of the contracting parties shall file separately a sworn
application for such license with the proper local civil registrar which shall specify the following:

xxx xxx xxx

(5) If previously married, how, when and where the previous marriage was dissolved or annulled;

xxx xxx xxx

ART. 13. In case either of the contracting parties has been previously married, the applicant shall be
required to furnish, instead of the birth of baptismal certificate required in the last preceding article, the
death certificate of the deceased spouse or the judicial decree of annulment or declaration of nullity of
his or her previous marriage. x x x.

ART. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution
of the properties of the spouses, and the delivery of the childrens presumptive legitimes shall be recorded
in the appropriate civil registry and registries of property; otherwise, the same shall not affect their
persons.

Respondent, on the other hand, argues that the Australian divorce decree is a public document a written
official act of an Australian family court. Therefore, it requires no further proof of its authenticity and due
execution.

Respondent is getting ahead of himself. Before a foreign judgment is given presumptive evidentiary value,
the document must first be presented and admitted in evidence.30 A divorce obtained abroad is proven
by the divorce decree itself. Indeed the best evidence of a judgment is the judgment itself.31 The decree
purports to be a written act or record of an act of an officially body or tribunal of a foreign country.32

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a public
or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested33 by
the officer having legal custody of the document. If the record is not kept in the Philippines, such copy
must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated
by the seal of his office.34

The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an
Australian family court.35 However, appearance is not sufficient; compliance with the aforemetioned rules
on evidence must be demonstrated.

Fortunately for respondents cause, when the divorce decree of May 18, 1989 was submitted in evidence,
counsel for petitioner objected, not to its admissibility, but only to the fact that it had not been registered
in the Local Civil Registry of Cabanatuan City.36 The trial court ruled that it was admissible, subject to
petitioners qualification.37Hence, it was admitted in evidence and accorded weight by the judge. Indeed,
petitioners failure to object properly rendered the divorce decree admissible as a written act of the Family
Court of Sydney, Australia.38

Compliance with the quoted articles (11, 13 and 52) of the Family Code is not necessary; respondent was
no longer bound by Philippine personal laws after he acquired Australian citizenship in
1992.39 Naturalization is the legal act of adopting an alien and clothing him with the political and civil rights
belonging to a citizen.40 Naturalized citizens, freed from the protective cloak of their former states, don
the attires of their adoptive countries. By becoming an Australian, respondent severed his allegiance to
the Philippines and the vinculum juris that had tied him to Philippine personal laws.

Burden of Proving Australian Law

Respondent contends that the burden to prove Australian divorce law falls upon petitioner, because she
is the party challenging the validity of a foreign judgment. He contends that petitioner was satisfied with
the original of the divorce decree and was cognizant of the marital laws of Australia, because she had lived
and worked in that country for quite a long time. Besides, the Australian divorce law is allegedly known
by Philippine courts: thus, judges may take judicial notice of foreign laws in the exercise of sound
discretion.

We are not persuaded. The burden of proof lies with the party who alleges the existence of a fact or
thing necessary in the prosecution or defense of an action.41 In civil cases, plaintiffs have the burden of
proving the material allegations of the complaint when those are denied by the answer; and defendants
have the burden of proving the material allegations in their answer when they introduce new
matters.42 Since the divorce was a defense raised by respondent, the burden of proving the pertinent
Australian law validating it falls squarely upon him.

It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws.43 Like any
other facts, they must be alleged and proved. Australian marital laws are not among those matters that
judges are supposed to know by reason of their judicial function.44 The power of judicial notice must be
exercised with caution, and every reasonable doubt upon the subject should be resolved in the negative.

Second Issue:

Respondents Legal Capacity to Remarry

Petitioner contends that, in view of the insufficient proof of the divorce, respondent was legally
incapacitated to marry her in 1994.
Hence, she concludes that their marriage was void ab initio.

Respondent replies that the Australian divorce decree, which was validly admitted in evidence, adequately
established his legal capacity to marry under Australian law.

Respondents contention is untenable. In its strict legal sense, divorce means the legal dissolution of a
lawful union for a cause arising after marriage. But divorces are of different types. The two basic ones are
(1) absolute divorce or a vinculo matrimonii and (2) limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second suspends it and leaves the bond in full force.45 There is no
showing in the case at bar which type of divorce was procured by respondent.

Respondent presented a decree nisi or an interlocutory decree a conditional or provisional judgment of

divorce. It is in effect the same as a separation from bed and board, although an absolute divorce may
follow after the lapse of the prescribed period during which no reconciliation is effected.46

Even after the divorce becomes absolute, the court may under some foreign statutes and practices, still
restrict remarriage. Under some other jurisdictions, remarriage may be limited by statute; thus, the guilty
party in a divorce which was granted on the ground of adultery may be prohibited from remarrying again.
The court may allow a remarriage only after proof of good behavior.47

On its face, the herein Australian divorce decree contains a restriction that reads:

1. A party to a marriage who marries again before this decree becomes absolute (unless the other party
has died) commits the offence of bigamy.48

This quotation bolsters our contention that the divorce obtained by respondent may have been restricted.
It did not absolutely establish his legal capacity to remarry according to his national law. Hence, we find
no basis for the ruling of the trial court, which erroneously assumed that the Australian divorce ipso
facto restored respondents capacity to remarry despite the paucity of evidence on this matter.

We also reject the claim of respondent that the divorce decree raises a disputable presumption or
presumptive evidence as to his civil status based on Section 48, Rule 3949 of the Rules of Court, for the
simple reason that no proof has been presented on the legal effects of the divorce decree obtained under
Australian laws.

Significance of the Certificate of Legal Capacity

Petitioner argues that the certificate of legal capacity required by Article 21 of the Family Code was not
submitted together with the application for a marriage license. According to her, its absence is proof that
respondent did not have legal capacity to remarry.

We clarify. To repeat, the legal capacity to contract marriage is determined by the national law of the
party concerned. The certificate mentioned in Article 21 of the Family Code would have been sufficient to
establish the legal capacity of respondent, had he duly presented it in court. A duly authenticated and
admitted certificate is prima facie evidence of legal capacity to marry on the part of the alien applicant
for a marriage license.50

As it is, however, there is absolutely no evidence that proves respondents legal capacity to marry
petitioner. A review of the records before this Court shows that only the following exhibits were presented
before the lower court: (1) for petitioner: (a) Exhibit A Complaint;51 (b) Exhibit B Certificate of
Marriage Between Rederick A. Recto (Filipino-Australian) and Grace J. Garcia (Filipino) on January 12, 1994
in Cabanatuan City, Nueva Ecija;52(c) Exhibit C Certificate of Marriage Between Rederick A. Recio
(Filipino) and Editha D. Samson (Australian) on March 1, 1987 in Malabon, Metro Manila;53 (d) Exhibit D
Office of the City Registrar of Cabanatuan City Certification that no information of annulment between
Rederick A. Recto and Editha D. Samson was in its records;54 and (e) Exhibit E Certificate of Australian
Citizenship of Rederick A. Recto;55 (2) for respondent: (Exhibit 1 Amended Answer;56 (b) Exhibit S
Family Law Act 1975 Decree Nisi of Dissolution of Marriage in the Family Court of Australia; 57 (c) Exhibit
3 Certificate of Australian Citizenship of Rederick A. Recto;58 (d) Exhibit 4 Decree Nisi of Dissolution
of Marriage in the Family Court of Australia Certificate;59 and Exhibit 5 Statutory Declaration of the
Legal Separation Between Rederick A. Recto and Grace J. Garcia Recio since October 22, 1995.60

Based on the above records, we cannot conclude that respondent, who was then a naturalized Australian
citizen, was legally capacitated to marry petitioner on January 12, 1994. We agree with petitioners
contention that the court a quo erred in finding that the divorce decree ipso facto clothed respondent
with the legal capacity to remarry without requiring him to adduce sufficient evidence to show the
Australian personal law governing his status; or at the very least, to prove his legal capacity to contract
the second marriage.

Neither can we grant petitioners prayer to declare her marriage to respondent null and void on the
ground of bigamy. After all, it may turn out that under Australian law, he was really capacitated to marry
petitioner as a direct result of the divorce decree. Hence, we believe that the most judicious course is to
remand this case to the trial court to receive evidence, if any, which show petitioners legal capacity to
marry petitioner. Failing in that, then the court a quo may declare a nullity of the parties marriage on the
ground of bigamy, there being already in evidence two existing marriage certificates, which were both
obtained in the Philippines, one in Malabon, Metro Manila dated March 1, 1987 and the other, in
Cabanatuan City dated January 12, 1994.

WHEREFORE, in the interest of orderly procedure and substantial justice, we REMAND the case to the
court a quo for the purpose of receiving evidence which conclusively show respondents legal capacity to
marry petitioner; and failing in that, of declaring the parties marriage void on the ground of bigamy, as
above discussed. No costs.