CONFLICT OF LAWS:

PROPERTY
Howard Santos
Thomas Co
Martin Santos
Patrick Rosales
 When Does Conflict Arise?
In property-related matters, a conflict of law situation arises only when:

1) There is a dispute over the title or ownership of an immovable, such that the capacity to
take and transfer immovables, the formalities of conveyance, the essential validity &
effect of the transfer or the interpretation and effect of a conveyance are to be
determined; and

2) A foreign law on land ownership and its conveyance is asserted to conflict with a
domestic law on the same matters.

Otherwise, the problem only has a domestic character

 Illustrative case: Laurel vs. Garcia (187 SCRA 797,
1990)
Quick Facts:
Philippine Govt owned properties in Japan, including one in Roppongi which it wanted to
sell/dispose to non-Filipino buyers
Petitioners position: apply Philippine law to determine who can acquire said properties
Respondents position: apply Japanese law (following principle of lex loci rei sitae/lex situs)

Issue: W/N a conflict of law exists.

 Illustrative case: Laurel vs. Garcia (187 SCRA 797,
1990)
Held: None.
Issue is not validity of ownership or title, but (1) authority of respondents to validly dispose of
property belonging to the State and (2) validity of procedures adopted to effect its sale
No conflict of law: properties in question is part of public dominion (inalienable) and has not
been converted to patrimonial property
Why should we discuss who can acquire the Roppongi lot when there is no showing that it
can be sold?
RULE AS TO REAL AND
PERSONAL PROPERTY
Lex Rei Sitae
- The law of the place where the property is situated
- Article 16, Civil Code
- Applicable to BOTH Real and Personal property
- Although property may be situated in another jurisdiction, the
courts are not powerless from acquiring jurisdiction
Lex Rei Sitae - Pertinent Cases
- Tayag v. Benguet Consolidated
- the actual situs of shares of stock is in the Philippines when the corporation
is domiciled therein
- Roberts v. Locke
- Distinction between judgments calculated to affect title to property itself
from orders directing owners subject to their jurisdiction to take action
concerning property located outside its jurisdiction
- Litigants must plead and prove foreign laws they wish to take advantage of
Lex Rei Sitae - exceptions
- When the transaction involving the property does not affect transfer of ownership, title, or
alienation
- Where the transaction involves an obligation covered by the ordinary law of contract
- In intestate or testate succession which is the government of the national law of the decedent
applies whether the property is real or personal irrespective of the nature and location of the
property
- Liljedahl v. Glasgow
SPECIFIC RULES AS TO
OWNERSHIP OF REAL
PROPERTY
Co, Thomas. Rosales, Patrick.
Santos, Howard. Santos, Martin.
Section 7, Article XII, 1987 Constitution:

Save in cases of hereditary succession, no

private lands shall be transferred or
conveyed except to individuals,
corporations, or associations qualified to
acquire or hold lands of the public domain.
What are private lands?

Any land of private ownership.

Includes both lands owned by
private individuals and lands which
are patrimonial property of the State
or of municipal corporations.
Who are Individuals, corporations, or
associations qualified to acquire or hold
lands of the public domain?
1. Filipino Citizens
2. Filipino corporations and associations as defined in Section 2;
Batas Pambansa Blg. 68, otherwise known as The Corporation Code of the Philippines,
provides:
Sec. 36. Corporation powers and capacity.
7. To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and
otherwise deal with such real and personal property, including securities and bonds of other
corporations as the transaction of the lawful business of the corporation may reasonably and
necessarily require, subject to limitations prescribed by law and the Constitution;
3. By exceptions, aliens, but only by hereditary succession; and
4. A natural born citizen of the Philippines who has lost Philippine Citizenship (but only under
the terms of Section 8)
What is Hereditary Succession?

Intestate Succession
(refer to the case of
Ramirez vs. Vda. De
Ramirez)
RAMIREZ vs. VDA. DE RAMIREZ
G.R. No. L-27952 / February 15, 1982
The constitutional provision which enables aliens to
acquire private lands does not extend to
testamentary succession for otherwise the
prohibition will be for naught and meaningless.
Any alien would be able to circumvent the prohibition
by paying money to a Philippine landowner in
exchange for a devise of a piece of land.
MATTHEWS vs. TAYLOR
G.R. No. 164584 / June 22, 2009
The rule is clear and inflexible: aliens are absolutely not allowed to
acquire public or private lands in the Philippines, save only in
constitutionally recognized exceptions.
Even if the alien spouse provided the funds for an acquisition of
private lands in the Philippines, he acquires no right whatsoever
thereto.
If the property acquired by an alien and his or her Filipino spouse were
to be declared conjugal, this would accord the alien a substantial
interest and right over the land, as he would then have a decisive vote
as to its transfer or disposition. This is a right that the Constitution
does not permit him to have.
CHEESMAN vs. IAC
G.R. No. 74833 / January 21, 1991
The fundamental law prohibits the sale to aliens of
residential land.
An alien who buys property with his Filipino spouse acquires
no right whatever over the property by virtue of that
purchase
If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and
right over land, as he would then have a decisive vote as to
its transfer or disposition. This is a right that the
Constitution does not permit him to have.
LLANTINO vs. CO LIONG CHONG
G.R. No. L-29663 / August 20, 1990
A lease to an alien for a reasonable period is valid.
So is an option giving an alien the right to buy real property
on condition that he is granted Philippine citizenship.
Aliens are not completely excluded by the Constitution from
use of lands for residential purposes.
The only instance where a contract of lease may be
considered invalid is, if there are circumstances attendant
to its execution, which are used as a scheme to circumvent
the constitutional prohibition.
Section 8, Article XII, 1987 Constitution

Notwithstanding the provisions of

Section 7 of this Article, a natural-born
citizen of the Philippines who has lost
his Philippine citizenship may be a
transferee of private lands, subject to
limitations provided by law.
RA No. 7042, as amended by RA 8179, aka
Foreign Investment Act
SEC. 10. Other Rights of Natural Born Citizen Pursuant to the Provisions of Article XII, Section 8 of the
Constitution. - Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to
enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of five
thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land to be
used by him for business or other purposes. In the case of married couples, one of them may avail of the
privilege herein granted: Provided, That if both shall avail of the same, the total area acquired shall not exceed
the maximum herein fixed.
In the case the transferee already owns urban or rural land for business or other purposes, he shall still be
entitled to be a transferee of additional urban or rural land for business or other purposes which when added
to those already owned by him shall not exceed the maximum areas herein authorized.
A transferee under this Act may acquire not more than two (2) lots which should be situated in different
municipalities or cities anywhere in the Philippines: Provided, That the total land area thereof shall not exceed
five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land
for use by him for business or other purposes. A transferee who has already acquired urban land shall be
disqualified from acquiring rural land and vice versa.
Can foreign individuals own Condominium Units in the
Philippines?
Yes, A condominium building owned by a condominium corporation is subject to
ownership requirements which would permit foreigners to purchase such units. The
condominium corporation, in order to validly sell, must comply with the 60-40% rule
of the ownership ratio with the majority of ownership given to Filipino Citizens in
Accordance with the Condominium Act or otherwise known as RA 4726 sec. 5
which provides:

where the common areas in the condominium project are owned by the owners of
separate units as co-owners thereof, no condominium unit therein shall be
conveyed or transferred to persons other than Filipino Citizens, or corporations at
least 60% of the capital stock of which belong to Filipino citizens, except in cases
of hereditary succession. Where the common areas in a condominium project are
held by a corporation, no transfer or conveyance of a unit shall be valid if the
concomitant transfer in the corporation will cause the alien interest in such
corporation to exceed the limits imposed by existing laws.
SEC-OGC Opinion 12-11
A foreign individual or a foreign corporation can own an interest in a condominium
project subject to certain conditions:

Interests in a condominium, which may be in the form of ownership, lease or any

other real rights, are subject to the following rules:

1.If the condominium is set up on leased land, the corresponding condominium

corporation may be established by a corporation which is wholly owned by a foreign
firm.
2.Where the condominium corporation is a Filipino corporation which owns the land on
which the condominium project is situated, no interest in the condominium may be
transferred to aliens; or, when the common areas are held by a condominium corporation,
the transfer to aliens of units in the project may be made only up to the point where the
concomitant transfer of stockholdings in the condominium corporation would not cause
the alien interest in such corporation to exceed 40% of its entire stock.
In the case of Jacobus Bernhard Hulst v. PR Builders, Inc.:

The law provides that no condominium unit can be sold without at the same time
selling the corresponding amount of rights, shares or other interests in the
condominium management body, the Condominium Corporation; and no one can buy
shares in a Condominium Corporation without at the same time buying a
condominium unit. It expressly allows foreigners to acquire condominium units and
shares in condominium corporations up to not more than 40% of the total and
outstanding capital stock of a Filipino-owned or controlled corporation. Under this set
up, the ownership of the land is legally separated from the unit itself. The land is
owned by a Condominium Corporation and the unit owner is simply a member in this
Condominium Corporation.As long as 60% of the members of this Condominium
Corporation are Filipino, the remaining members can be foreigners.