Part IV.
FOREIGN LAW
Ascertainment and Proof of Foreign Law; Doctrine of Processual Presumption
1) SY JOC JIENG vs SY QUIA
Plaintiffs: Sy Joc Jieng, Sy Yoc Chay, Sy Jui Niu and Sy Chua Niu
Defendants: Petronila Encarnacion, Gregorio Sy Quia, Pedro Sy Quia, Juan Sy Quia, Generoso
Mendoza Sy Quia
Citation: GR No. 4718
Date of Promulgation:March 19, 1910
Ponente: Torres
FACTS:
 December 4, 1905: SY JOC LIENG, SY JOC CHAY, SY JUI AND SY CHUA NIU FILED AN
AMENDED COMPLAINT AGAINST THE SAID DEFENDANT, ALLEGING THAT:
1. Sy Quia known here as Vicente Romero Sy Quia
- Born in China
- 1847: married in Amoy, China to Yap Puan Niu
 2 male children:
a. Sy By Bo
b. Sy By Guit
2. 1882: Sy By Bo died intestate in China, leaving as his only legitimate heirs, plaintiffs, Sy Yoc
Chay and Sy Jui Niu
3. 1880: Sy By Guit died inestate im China, leaving as is only legitimate heirs the other plaintiffs, Sy
Joc Jieng and Sy Chua Niu
4. 1881: Yap Puan Niu died intestate in China, leaving her suriviving husband, Sy Quia and her
grandchildren, who are plaintiffs in this case
5. 1894: Vicente Romero Sy Quia died intestate in Manila, leaving his surviving grandchildren, the
plaintffs, as his only legitimate heirs
6. Vicente Romero Sy Quia: acquired the ff properties:
- RP and PP in PH, mostly located in Manila = amounting to 1M
7. August 3, 1900: Defendants illegally, without any rights, and in the absence of Plaintiffs herein,
took possession of all the said personal and real property left by Sy Quia, and since then gave
managed and administered the same, alleging to be owners thereof
8. Since then, Defendants and each of them have converted and are converting said property to
their own use and benefit
PRAYERS:
a) They are the only descendants and legitimate heirs of Sy Quia
b) They are entitled to the possession of all the property of his estate
c) Since the properties have been wrongfully appropriated, it became impossible for them
to ascertain and discover the amount of rents and profits, all of which said properties
are in danger of being lost, to the irreparable damage of the plaintiff, unless and except
a receiver is appointed to take charge of the preservation and custody of the same to
protect their interests
d) It is necessary for the defendants to be required to render detailed accounts of the real
property and rents and profits of the estate, and that it be ascertained by the sworn
statements of the defendants
 DEFENDANTS’ ANSWERS:
1. Denied the paternity and status of plaintiffs, and those which relate to the succession and actual
condition of the estate of Sy Quia
2. Prior to 1852, Vicente Ruperto Romero Sy Quia was an infidel known only by the name of Sy
Quia. Having resided in PH for many years
3. In 1852, Sy Quia was converted to the Christian Religion, and was baptized at San Vicente
Parish Church in Ilocos Sur under the name “Vicente Ruperto Romero Sy Quia”, as indicated in
his Certificate of Baptism
4. Sy Quia contracted a canonical marriage in 1853 under the laws of PH with Defendant Petronila
Encarnacion, a native of Vigan, Ilocos Sur
5. Sy Quia and Petronila fixed their residence and conjugal domicile in PH until the dissolution of
their conjugal partnership caused by Sy Quia’s death on January 9, 1894
6. At the time of the marriage, Sy Quia brought no property to the marriage, but the wife brought a
small capital which was the foundation of the subsequent fortune acquired by spouses by their
labor and industry of their 5 children (Apolinaria, Maria, Gregorio, Pedro, Juan)
7. 5 children: have always been in continuous possessin of the status of legitimate children, in
lawful wedlock begotten of Sy Quia and Petronilla
8. Since Sy Quia’s death, defendants have been in quiet, peaceful and uninterrupted possession as
owners in good faith and with just title of the properties which constitutes the estate of Sy Quia
9. Their possession have never been disturbed by the plaintiffs
10. all the property included in the inventory made at the time of the partition of the state of the
deceased Sy Quia, was acquired by him subsequent to the year 1853, when he married the
defendant Petronila Encarnacion;
11. that a great portion of the real property included in the said inventory was acquired by Petronila
Encarnacion after the death of her husband, and that in the title deeds of a considerable portion
of the property bought during the lifetime of Sy Quia, Petronila Encarnacion appears as the
vendee, wherefore the defendants Pedro Sy Quia, Juan Sy Quia, and Petronila Encarnacion,
prayed the court that they be acquitted of the complaint, with the costs against the plaintiffs, and
that they, the defendants, be granted such other and further relief as might be just and equitable.
 DEFENDANT GREGORIO SY QUIA’S ANSWER:
1. Denied the allegations, specifically the marriage of Sy Quia in 1847 at Amoy, China with Yap
Puan Niu
2. Prior to 1952, Sy Quia was baptized in PH as Catholic
3. Sy Quia contracted marriage with Petronila, who after their marriage, continuously resided in PH
until Jan. 9, 1894
4. Sy Quia brought no property to the marriage
5. CFI Quiapo declared the 5 children of Sy Quia as his surviving children, and his intestate heirs
6. plaintiffs at the time of the death of Vicente Romero Sy Quia had knowledge of his demise, and
had notice that the defendants had petitioned to the court for a declaration, which they obtained,
to the effect that they were the heirs of the said Vicente Romero Sy Quia, deceased;
7. At no time were the plaintiffs or their parents recognized or considered by the said Vicente
Ruperto Romero Sy Quia as his descendants, heirs or relatives; wherefore defendant prayed that
judgment be entered declaring that the plaintiffs had no right or interest to or in the estate of the
deceased Vicente Romero Sy Quia, and that the defendants are the only legitimate heirs of the
said Sy Quia, taxing the costs against the plaintiffs
 DEFENDANT GENEROSO MENDOZA SY QUIA’S ANSWER:
1. Denied each allegations, also Sy Quia’s alleged marriage in Amoy, China and the claim of the
plaintiffs that they are the legitimate heirs of Sy Quia
2. Same allegations with GREGORIO

 PLAINTIFF’S REPLY TO THE ANSWERS:
1. Denied everything
2. The pretended marriage between Sy Quia and Petronilla was not a lawful marriage, but a false
and fraudulent one
3. Cert of Marriage was false and fraudulent
4. Sy Quia continued to be the husband of Yap Puan Niu until 1891, when the latter died
5. Sy Quia did not married after Yap Puan NIu’s death
6. Defendants (5 children) were not and never had been Sy Quia’s legitimate heirs
 June 19, 1906: counsel for Petronila notified the court of her death last June 6, 1906
 Counsel of other defendants (Pedro, Juan): moved that an order be made directing that the action
be proceeded with in the name of the administrator of her estate, Pedro Sy Quia -- granted
 August 20, 1906: deposition in China
 November 8, 1906: court was informed of the death of Plaintiff Sy Jui NIu in Amoy China on July 28,
1906
- Died intestate;C. W Brian: special administrator
 CFI: rendered a judgment declaring:
1. that the plaintiffs and the defendants, and the heirs of the deceased Petronila Encarnacion,
represented by one of the defendants, Pedro Sy Quia, as the administrator of the property, were
the heirs of the property of the estate of Vicente Romero Sy Quia, now deceased, consisting of
one-half of the property distributed by the order of the Court of First Instance of the district of
Quiapo of the 3rd of August, 1900
2. Defendants are required to render an accounting of the rents and profits of all the property
3. Appointment of receiver
 Counsel for Defendants, by himself and as administrator of the estate: duly excepted and by a
motion, presented to the court asked that the said judgment be set aside and that new trial be
granted, on the ground that the evidence was insufficient to justify the decision in favor of the plaintiffs
- Motion was overruled
- Filed thereafter a BILL OF EXCEPTIONS = granted, court then directed that the execution
of judgment be not stayed in so far as it required the defendants to submit a statement
showing the property received by them, and to render an account of all the rents and profits
upon giving a bond
 CFI: appointed Gregorio Sy Quia as receiver
- Bond: 400k
 Plaintiffs: upon being notified of the judgment, requested in court, in writing to modify its decision,
and declare Plaintiffs as the only heirs of the deceased
ISSUES AND HELD:
1. W/N the marriage contracted by Sy Quia in Vigan produced legal effects under the laws in
force in PH in 1853?
Therefore, even assuming that the second marriage which was contracted by Sy Quia at Vigan was void,
while a former marriage alleged to have been performed at Amoy, China, was still in full force and effect,
and upon which the plaintiffs in this case base their contention, the second marriage, however, produced
civil effects under the laws here in force in 1853, the time when it was performed.
The Civil Code has merely reproduced with certain modifications the provisions of the old legislation in
force in 1853 as to the civil effects of a void marriage where both parties married in good faith, as well as
where only one of them acted in good faith, for whether one or both married in good faith, the marriage will
produce civil effects only in favor of the innocent spouse, and of the children born of this void marriage.
If in all the acts of life good faith is to be presumed unless the contrary is proven, it cannot be denied that
Petronila Encarnacion acted in good faith when she married Vicente Romero Sy Quia in 1853, since there
is no evidence in the record to the effect that she knew before or after her marriage that the said Vicente
Romero Sy Quia was married in China to another woman.
The marriage contracted by a Christian Chinese at the time when Sy Quia was married in the Philippine,
was proceeded by such formalities, and so many requisites had first to be complied with, that it was
difficult, not to say impossible, that in the natural and ordinary course of things the marriage could have
been performed if there were any impediment at all thereto. In the case of Sy Quia, not only for many
years was he considered in the city of Vigan by the community at large as a bachelor, his name appearing
as such in the municipality census, but it must be fairly assumed that when he instituted the proceedings
before the civil authorities, and ecclesiastical proceedings in the ecclesiastical court of Vigan, in order to
secure permission and authority to marry in accordance with the various decrees then in force, among
them the decree of the 20th of December, 1849, he must have positively said then that he was a bachelor,
and this fact must have appeared from the summary investigation conducted by the ecclesiastical
authority of Vigan for the purpose of ascertaining whether or not he was a bachelor and free to marry, and
when at last the parish priest of Vigan was authorized to proceed with the marriage ceremony, there is
little room for doubt that Petronila Encarnacion, as well as her family, relying upon the result of both
proceedings, and upon the license or authority granted by the government, and the authority given by the
vicar-general in the name of the bishop, for the performance of the marriage, they consented thereto in
the best of good faith, particularly Petronila Encarnacion, to the latter’s union to Vicente Romero Sy Quia
in lawful wedlock.
If, on the contrary, it were true that Sy Quia had married in China many years before, there is no doubt
that he acted in bad faith by deceiving his wife Petronila Encarnacion, as well as the civil and
ecclesiastical authorities of this country, perjuring himself. And upon the assumption that the marriage with
Petronila Encarnacion was void by reason of the existence of a prior undissolved marriage, the second
marriage, nevertheless, produced its civil effects in favor of the deceived spouse, and of the children born
to them, who, notwithstanding the nullity of the second marriage, are in the eyes of the law legitimate, as
though they had been born of parents lawfully married.
Therefore, assuming that Vicente Romero Sy Quia acted in bad faith by concealing the fact of his first
marriage at the investigation made by the authorities for the purpose of determining whether or not he was
a bachelor and free to marry, one of the civil effects produced by the marriage thus rendered void was the
Sy Quia thereby absolutely forfeited all this rights and interest to one-half of the conjugal property
appearing in the instrument of partition. Exhibit A. F., and by operation of law all the property which would
otherwise have belonged to him, became the property of his wife, Petronila Encarnacion, in accordance
with the provisions of the Civil Code applicable to the came in conformity with rule 3 of the transitory
provisions.
2. W/N the Plaintiffs have a right to claim the inheritance from the conjugal partnership of Sy
Quia and Petronila? What law shall govern their claims?
It should be borne in mind that on account of the unexplained silence of Yap Puan Niu during her lifetime,
and the silence of the plaintiffs during Sy Quia’s lifetime, the conjugal partnership constituted in 1853
between Sy Quia and Petronila Encarnacion was dissolved in 1894 by the death of the husband, and only
then, when the Civil Code was already in operation, would their presumptive heirs have acquired a right to
claim the inheritance, for the right to expectancy, and not until after the deceased of the person whose
succession is in concern can such a right be said exist or to be duly acquired.
However, as a matter of fact the action instituted by plaintiffs in 1905, claiming the property left by Sy Quia
at the time of his death, is based especially upon the alleged nullity of the second marriage on account of
the existence of the former performed in China. Therefore, the rights claimed by the plaintiffs should be
determined in accordance with the provisions of the Civil Code which has been in operation since 1889
and under which the rights now asserted by the plaintiffs might have sprung and been acquired by them,
this assuming that the alleged first marriage was actually performed in China and that the claimants were
in fact the issue of the said pretended marriage of Sy Quia and Yap Puan Niu.
Since the 9th of June, 1853, when Vicente Romero Sy Quia married Petronila Encarnacion, the conjugal
partnership commenced to exist between the two spouses. All the property acquired by them up to the
time of the dissolution of the said partnership on account of the death of Sy Quia on January 9, 1894,
belonged to this partnership.
During Sy Quia’s lifetime the validity of his marriage with Petronila Encarnacion, as has been said before,
was never questioned, no one having indicated any defect which rendered the same void. It was only after
his death that the plaintiffs ventured to attack the validity of the same by claiming that they were his
legitimate heirs and as such entitled to his estate.
The Laws of the Partidas above cited, as well as the Civil Code, both recognize as a fact that a marriage
contracted in good faith, by one at least of the parties to the same, produces the same civil effects as a
valid marriage with reference to the innoncent spouse and the children born of such marriage, even
though the same be subsequently declared null and void.
It can not be denied that Petronila Encarnacion married Sy Quia in the best of good faith, there being not
the slightest proof to the contrary so far as the record shows. Therefore, being innocent, she must be held
to have acquired all the rights to which a wife is ordinarily entitled, and neither she nor her children can be
made to suffer the consequences of the nullity of such marriage, this, assuming that the marriage was
void; nor can they in any event be made to suffer the consequences of the bad faith of her husband Sy
Quia.
The nullity of the marriage, once declared by the courts, may deprive the partnership created by the
marriage of the alleged spouses of its otherwise legal character, but can not destroy the legal
consequences of the marital union while it existed. Consequently the children are considered legitimate,
and the innocent spouse is unquestionably entitled to one-half of the conjugal property acquired during the
marriage.
From the legal provisions above cited, especially the sections of the Civil Code referred to, it necessarily
follows that the half of the conjugal property to which Vicente Romero Sy Quia would have been otherwise
entitled, on account of the alleged nullity of his marriage with Petronila Encarnacion and of his bad faith in
contracting the same, was forfeited by him and by operation of the law passed to the other spouse,
Encarnacion; and the plaintiffs, in their alleged capacity as legitimate descendants of the said Sy Quia,
deceased, can not now claim the said property, as the decedent, by the express provisions of the law,
absolutely forfeited his right to the said half of the property acquired during the marriage. Such marriage
must be considered null and void if it is true, as alleged by the plaintiffs, that Sy Quia’s marriage with Yap
Puan Niu was still in full force and effect when he married Petronila Encarnacion.
3. W/N the Sy Quia is a subject of the Chinese empire, as alleged by the Plaintiffs?
It is proven and undeniable fact that Sy Qua resided on the Philippines for more than fifty years, he having
only absented of immediately returning to the Islands; and it is also a fact that in various documents and
public instrument executed before notaries public, which have been introduced in evidence marked as
"Exhibits 1, 2, and 3," said Vicente Romero Sy Quia has uniformly stated that he was a resident of the
district of Binondo, having declared in one of the said documents that he was a freeholder. Of the
Chinaman Vicente Romero Sy Quia on account of his continuous residence in these Islands for a period
of more than fifty years, and by virtue of the fact that he had permanently established himself in this
country, living in a house of his own, with his wife and children, and having acquired real estate therein,
did become a domiciled denizen under the laws then in force,
In another judgment of the 29th of August of the same year the same year the said supreme court of
Spain held that under the provisions of law 3, title 11, book 6, of the Novisima Recopilacion, there should
be considered as domiciled denizens of Spain all foreigners who, being self-supporting, established their
domicile in the country; the double inscription in the registry, as required by the royal decree of the 17th of
November, 1852, being no obstacle thereto.
Continuous and permanent residence in the country for a period of years, and the rights thereby acquired
as a denizen of any town, were always taken into consideration by the Spanish legislators in determining
the rights of a foreigner residing in Spanish territory.
It becomes necessary to refer to the Spanish laws which were applicable or in operation in these Islands
at the time that Vicente Romero Sy Quia gained residence and acquired the status of a domiciled denizen
of the municipality of Vigan and subsequently of this city of Manila, for the reason that they were the only
laws regulating his personal rights.
4. W/N the PH laws shall govern the estate of Sy Quia?
The foregoing will clearly show that Vicente Romero Sy Quia gained residence in these Islands under the
laws of the Novisima Recopilacion. Therefore the questions raised by those who now claim to be his
descendants should be decided in accordance with the laws in force in the Philippines to which Sy Quia
submitted himself from the time he applied for a resident’s license and abstained from registering in 1870
as a foreigner. Most of the property left by him being real, the same is subject to the laws of the country in
which it is located.
The plaintiffs in this case have invoked certain provisions of the Chinese laws as one of the grounds of the
action by them instituted and now contend that the estate of Vicente Romero Sy Quia, deceased, should
be distributed in accordance with the laws of that country. Even disregarding the fact that the plaintiffs
should have, but have not, alleged in their complaint, as one of the facts constituting their cause of action,
the existence of a law passed and promulgated in China, the existence of which law, being foreign, should
have been alleged in the complaint, the fact remains that there is absolutely no evidence in the record as
to the existence of the Chinese laws referred to by plaintiffs in their subsequent pleadings, the evidence of
this character introduced by them consisting of books or pamphlets written in Chinese characters and
marked "Exhibits AH, AI, AJ, and AK,’ which they claim contain a compilation of the laws of China, being
useless and of no value.
It may be that contain, as plaintiff claim, the laws of China, but we have no Spanish translation of them,
they being in the Chinese language, and written with characters which are absolutely unknown to this
court and to the defendants. Further, the plaintiffs have not prescribed by section 292 of the Code of Civil
Procedure, and, finally, there is no evidence that these four books or pamphlets were printed by authority
of the Chinese Government or that they have been duly authenticated by the certificate of competent
authorities or that they are properly sealed with the seal of the nation to which they belong. For this reason
the said books or pamphlets can not, under any circumstances, be considered as documentary proof of
the laws of China.
Section 300 of the Code of Civil Procedure reads as follows:
"Books printed or published under the authority of the United States, or of one of the States of the United
States, or a foreign country, and purporting to contain statutes, codes, or other written law of such State or
country, or proved to be commonly admitted in the tribunals of such State or country as evidence of the
written law thereof, are admissible in the Philippine Islands as evidence of such law."
Section 301 of the same code provides:
"A copy of the written law, or other public writing of any State or country, attested by the certificate of the
officer having charge of the original, under the seal of the State or country, is admissible as evidence of
such law or writing."
Section 302 provides as follows:
"The oral testimony of witnesses, skilled therein, is admissible as evidence of the unwritten law of the
United States or of any State of the United States, or foreign country, as are also printed and published
books of reports of decisions of the courts of the United States or of such State or country, or proved to be
commonly admitted in such courts."
The jurisprudence of American and Spanish tribunals is uniform on this subject. For the purposes of this
decision however it will be sufficient to refer to the judgment of the supreme court of Spain of the 26th of
May, 1887, where in it is said:
"Whenever a foreign law is invoked in our tribunals, its existence must be satisfactory established as any
other fact.
If the pamphlets or books, written in Chinese characters, do not satisfactory establish the existence of
certain Chinese laws invoked by the plaintiffs, not only because such pamphlets or books lack the
aforesaid formalities and requisites, but further because there is no evidence as to the nature of the laws
contained in those books or pamphlets and the subjects with which they deal; on the other hand, the two
witnesses whose testimony was introduced for the purpose of establishing the authenticity of the laws
which, according to the plaintiffs, are contained in the said books, were unable to say positively at least
that the book marked Exhibit AH contains an exact copy of the original. And the Chinese consul of this
city, Sy Int Chu, after stating that he had never made a regular study of the laws of his country, simply
consulting the same in connection with his official reports, admitted that he had never read or seen the
original copy of this alleged compilation, the books not being duly certified, adding that he could not say
whether the book marked. "Exhibit AH" was an exact copy of the original.
The testimony of the witness Ly Ung Bing, the interpreter, as to the written and unwritten laws of China,
does not show, as required by the Code of Civil Procedure, that he knew such laws or that he was
acquainted with the nature of the laws alleged to be contained in the said books. He merely confined
himself to expressing his own opinion with reference to the two classes of laws. He, not being an expert
on the subject throughly conversant with the laws of China, his testimony, considering the manner in
which laws of China, his testimony, considering the manner in which he testified, can not even be
accepted as a partial evidence that the said four books really contain the written and unwritten laws of
China.
From the foregoing facts and provisions of law referred to we conclude:
First. That it has not been duly established in this case that the Chinaman Sy Quia, married in 1847 at Am
Thau, Amoy, China, the woman Yap Puan Niu, or that the plaintiffs are the descendants of the said Sy
Quia, for the reason that the marriage of Sy By Bo, Sy By Guit and Sy Jui, respectively, the affiliation and
parentage of the latter and of Sy Chua Niu and Sian Han, and the adoption of Sy Yoc Chay have not been
proven.
Second. That, even assuming that Sy Quia actually married Yap Puan Niu in 1847, and that the second
marriage with Petronila Encarnacion in 1853 is, therefore, void, Sy Quia having contracted this second
marriage in bad faith by concealing the fact that his former wife was still living, his half of the property of
the conjugal partnership between him and his second wife, who married him in good faith, was forfeited by
operation of law in favor of his said second wife, for although the law recognizes civil effects to a void
marriage, it, nevertheless, deprives the party who married in bad faith of his share in the community
property acquired during the existence of the marriage up to the time of its annulment.
Third. That, as a consequence of the foregoing conclusion and under the same hypothesis, the plaintiffs,
as the descendants of Sy Quia by his first marriage, have no right to claim Sy Quia’s share in conjugal
property acquired during his second marriage with Petronila Encarnacion for the reason that by the
express provision of the law the half of the said conjugal property which would have otherwise belonged to
the husband was transmitted to Petronila Encarnacion, together with the other half of the said property to
which she was rightfully entitled under the law as the deceived wife.
Fourth. That, under the same hypothesis that the marriage of Sy Quia with Petronila Encarnacion is void,
his former marriage not having been dissolved when he married the said Petronila Encarnacion, the
children by the second marriage are, nevertheless, legitimate, this being one of the civil effects of as
marriage contracted in good faith, as in this case, at least on the part of one of contracting parties,
Petronila Encarnacion.
Fifth. That Vicente Romero Sy Quia, having become a regularly domiciled denizen under the laws above
cited by reason of his long residence in this country for more than fifty years and by reason of the further
fact that he married a native woman, established himself in this city with a home of his own, acquired real
property and engaged in business generally, most of the property left by him at the time of his death real
property, the questions raised by plaintiffs’ petition must be determined in accordance with the laws of the
Philippines to which Sy Quia submitted himself when he came to the Islands and secured a residence
therein, and not in accordance with any other foreign or unknown law.
Sixth. that, aside from the fact that it does not specifically appear form the record what are the Chinese
laws applicable to the issues of this case, there is no proof of the existence of the Chinese laws referred to
by the plaintiffs, nor is there anything to show what the books or pamphlets introduced by them in
evidence contain any specific laws of the Celestial Empire.
The foregoing disposes explicitly or implicitly, affirmatively or otherwise, of all the questions raised by the
various assignments or error submitted by both parties; and in our opinion it is not necessary to dispose of
each of them in detail in view of the conclusion at which the court has arrived in this most important
litigation.
For the reasons hereinbefore stated, we are of the opinion, and so hold, that the judgment of the trial
court, appealed from by both parties, should be reversed, and that we should, and do hereby, absolve the
defendants of the complaint upon which this action was instituted, without any special order as to the
costs of both instances. The bond given by the receiver, Gregorio Sy Quia, is hereby discharged and the
petition heretofore made for the appointment of a new receiver is hereby denied. It is so ordered.
2) IN THE MATTER OF THE ESTATE OF EMIL H. JOHNSON
G.R. No. L-12767
Applicant: EBBA INGEBORG JOHNSON
Date of Promulgation:November 16, 1918
Ponente: Street, J.
Facts: On February 4, 1916,Emil H. Johnson, a native of Sweden and a naturalized citizen of the United
States, died in the city of Manila, leaving a holographic will, the value of which, as estimated by him, was
P231,800.
On February 9, 1916, A petition was presented in the CFI Manila for the probate of this will, on the ground
that Johnson was at the time of his death a citizen of the State of Illinois, United States of America; that
the will was duly executed in accordance with the laws of that State; and hence could properly be
probated here pursuant to section 636 of the Code of Civil Procedure. This section reads as follows:
Will made here by alien. — A will made within the Philippine Islands by a citizen or subject of another
state or country, which is executed in accordance with the law of the state or country of which he is a
citizen or subject, and which might be proved and allowed by the law of his own state or country, may
be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if
executed according to the laws of these Islands.
By the will in question the testator gives to his brother Victor one hundred shares of the corporate stock in
the Johnson-Pickett Rope Company; to his father and mother in Sweden, the sum of P20,000; to his
daughter EbbaIngeborg, the sum of P5,000; to his wife, Alejandra Ibañez, the sum of P75 per month, if
she remains single; to SimeonaIbañez, spinster, P65 per month, if she remains single. The rest of the
property is left to the testator's five children — Mercedes, Encarnacion, Victor, Eleonor and Alberto.
Emil H. Johnson was born in Sweden, from which country he immigrated to the United States and lived in
Chicago, Illinois, from 1893 to 1898. On May 9, 1898, at Chicago, he was married to Rosalie Ackeson,
and immediately thereafter embarked for the Philippines as a soldier in the Army of the United States. As
a result of relations between Johnson and Rosalie Ackeson a daughter, named EbbaIngeborg, was born.
After Johnson was discharged as a soldier from the service he continued to live in the Philippines, and on
November 20, 1902, the wife, Rosalie Johnson, was granted a decree of divorce from him in Illinois.
Johnson appeared in the United States on a visit and on January 10, 1903, procured a certificate of
naturalization at Chicago. Then the deceased returned to Manila, where he prospered in business and
continued to live until his death.
In this city he appears to have entered into marital relations with Alejandra Ibañez, by whom he had three
children, to wit, Mercedes, Encarnacion and Victor. The other two children mentioned in the will were
borne to the deceased by SimeonaIbañez.
On June 12, 1916, or about three months after the will had been probated, the attorneys for EbbaIngeborg
Johnson entered an appearance in her behalf and noted an exception to the other admitting the will to
probate.
Issues: (1) WON being a resident of manila invalidates his citizenship which affects the probate of the will
under the law of state of illinois
(2) WON the will was executed in conformity with the statutes of the State of Illinois
Held: No,the certificate of naturalization supplies incontrovertible proof that the testator became a citizen
of the United States, and also said State. Although he remained in the Philippines for sometime after
receiving his discharge, no evidence was adduced showing that at the time he returned to the United
States, he had then abandoned Illinois as the State of his permanent domicile, and on the contrary the
certificate of naturalization itself recites that at that time he claimed to be a resident of Illinois.
There is no law in force by virtue of which any person of foreign nativity can become a naturalized citizen
of the Philippine Islands; and it was, therefore, impossible for the testator, even if he had so desired, to
expatriate himself from the United States and change his political status from a citizen of the United States
to a citizen of these Islands. This being true, it is to be presumed that he retained his citizenship in the
State of Illinois along with his status as a citizen of the United States. It would be novel doctrine to
Americans living in the Philippine Islands to be told that by living here they lose their citizenship in the
State of their naturalization or nativity.
We are not unmindful of the fact that when a citizen of one State leaves it and takes up his abode in
another State with no intention of returning, he immediately acquires citizenship in the State of his new
domicile. This is in accordance with that provision of the Fourteenth Amendment to the Constitution of the
United States which says that every citizen of the United States is a citizen of the State where in he
resides. The effect of this provision necessarily is that a person transferring his domicile from one State to
another loses his citizenship in the State of his original above upon acquiring citizenship in the State of his
new abode. The acquisition of the new State citizenship extinguishes the old. That situation, in our
opinion, has no analogy to that which arises when a citizen of an American State comes to reside in the
Philippine Islands. Here he cannot acquire a new citizenship; nor by the mere change of domicile does he
lose that which he brought with him.
(2) Yes, the trial judge no doubt was satisfied that the will was properly executed by examining section
1874 of the Revised Statutes of Illinois, as exhibited in volume 3 of Starr & Curtis's Annotated Illinois
Statutes, 2nd ed., p. 426; and he may have assumed that he could take judicial notice of the laws of
Illinois under section 275 of the Code of Civil Procedure. If so, he was in our opinion mistaken. That
section authorizes the courts here to take judicial notice, among other things, of the acts of the legislative
department of the United States. These words clearly have reference to Acts of the Congress of the
United States; and we would hesitate to hold that our courts can, under this provision, take judicial notice
of the multifarious laws of the various American States. Nor do we think that any such authority can be
derived from the broader language, used in the same action, where it is said that our courts may take
judicial notice of matters of public knowledge "similar" to those therein enumerated. The proper rule we
think is to require proof of the statutes of the States of the American Union whenever their provisions are
determinative of the issues in any action litigated in the Philippine courts.

Nevertheless, even supposing that the trial court may have erred in taking judicial notice of the law of
Illinois on the point in question, such error is not now available to the petitioner, first, because the petition
does not state any fact from which it would appear that the law of Illinois is different from what the court
found, and, secondly, because the assignment of error and argument for the appellant in this court raises
no question based on such supposed error. Though the trial court may have acted upon pure conjecture
as to the law prevailing in the State of Illinois, its judgment could not be set aside, even upon application
made within six months under section 113 of the Code of Civil procedure, unless it should be made to
appear affirmatively that the conjecture was wrong. The petitioner, it is true, states in general terms that
the will in question is invalid and inadequate to pass real and personal property in the State of Illinois,
but this is merely a conclusion of law. The affidavits by which the petition is accompanied contain no
reference to the subject, and we are cited to no authority in the appellant's brief which might tent to raise a
doubt as to the correctness of the conclusion of the trial court. It is very clear, therefore, that this point
cannot be urged as of serious moment.
But it is insisted in the brief for the appellant that the will in question was not properly admissible to
probate because it contains provisions which cannot be given effect consistently with the laws of the
Philippine Islands; and it is suggested that as the petitioner is a legitimate heir of the testator she cannot
be deprived of the legitime to which she is entitled under the law governing testamentary successions in
these Islands. Upon this point it is sufficient to say that the probate of the will does not affect the intrinsic
validity of its provisions, the decree of probate being conclusive only as regards the due execution of the
will.
If, therefore, upon the distribution of this estate, it should appear that any legacy given by the will or other
disposition made therein is contrary to the law applicable in such case, the will must necessarily yield
upon that point and the law must prevail. Nevertheless, it should not be forgotten that the intrinsic validity
of the provisions of this will must be determined by the law of Illinois and not, as the appellant apparently
assumes, by the general provisions here applicable in such matters; for in the second paragraph of article
10 of the Civil Code it is declared that "legal and testamentary successions, with regard to the order of
succession, as well as to the amount of the successional rights and to the intrinsic validity of their
provisions, shall be regulated by the laws of the nation of the person whose succession is in question,
whatever may be the nature of the property and the country where it may be situate."
It follows that the trial court committed no error in denying the relief sought. The order appealed from is
accordingly affirmed with costs. So ordered.
3) IN THE MATTER ESTATE OF EDWARD RANDOLPH HIX
G.R. No. L-32636; DATE: March 17, 1930
A.W. Fluemer (petitioner-appellant) v. Annie Coushing Hix (oppositor-appellee)
PONENTE: J. Malcolm
FACTS: The special administrator of the estate of Edward Randolph Hix (deceased) appealed from a
decision of the CFI denying the probate of the document alleged to be the last will and testament of the
deceased. Fluemer claimed that the purported will was executed in Elkins, West Virginia, on 3 November
1925, by the deceased who had his residence in that jurisdiction. He further alleged the laws of West
Virginia Code, as annotated by Hogg, Charles E., and as certified to by the Director of the National
Library.
ISSUE: W/N the CFI is correct in denying the probate of the document alleged to be the last will and
testament of the deceased.
HELD: Yes. The laws of a foreign jurisdiction do not prove themselves in the courts of the
Philippines. PH courts are not authorized to take American Union. Such laws must be proved as facts.
And in this case, the requirements of the law were not met. There was no printed or published copy under
the authority of the State of West Virginia, as provided in section 300 of the Code of Civil Procedure. Nor
was the extract from the law attested by the certificate of the officer having charge of the original, under
the sale of the State of West Virginia, as provided in section 301 of the Code of Civil Procedure. No
evidence was introduced to show that the extract from the laws of West Virginia was in force at the time
the alleged will was executed.
In addition, the due execution of the will was not established. The only evidence on this point is to be
found in the testimony of Fluemer. Aside from this, there was nothing to indicate that the will was
acknowledged by the testator in the presence of two competent witnesses, and that these witnesses
subscribed the will in the presence of the testator and of each other as the law of West Virginia seems to
require. On the supposition that the witnesses to the will reside without the Philippine Islands, it would
then the duty of Fluemer to prove execution by some other means, provided in section 633 of the Code of
Civil Procedure. Moreover, it was also necessary for Fluemer to prove that the deceased had his domicile
in West Virginia.
DISPOSITIVE PORTION: For all the foregoing, the judgment appealed from will be affirmed, with the
costs of this instance against the appellant.
4) WILLAMETTE IRON & STEEL WORKS, plaintiff-appellee, vs.A.H. MUZZAL, defendant-appellant.
G.R. No. L-42538 May 21, 1935
This case involves the liability of the defendant ( A. H. Muzzal), a former resident of the State of California,
now residing in the Philippine Islands, for obligations contracted by a Meyer-Muzzal Company , California
corporation of which he was a stockholder at the time said obligations were contracted with the Willamette
Iron, the plaintiff-appellee in this case.
The section of the Civil Code of California under which the plaintiff seeks to recover reads:
SEC. 322. Each stockholder of a corporation is individually and personally liable for such proportion of all
its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of stock
or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation.
Any creditor of the corporation may institute joint or several actions against any of its stockholders, for the
proportion of his claim payable by each, and in such action the court must (1) ascertain the proportion of
the claim or debt for which each defendant is liable, and (2) a several judgment must be rendered against
each, in conformity therewith. If any stockholder pays his proportion of any debt due from the corporation,
incurred while he was such stockholder, he is relieved from any further personal liability for such debt, and
if an action has been brought against him upon such debt, it must be dismissed, as to him, upon his
paying the costs, or such proportion thereof as may be properly chargeable against him. The liability of
each stockholder is determined by the amount of stock or shares owned by him at the time the debt or
liability was incurred; and such liability is not released by any subsequent transfer of stock.
CFI Zamboanga: judgment in favor of plaintiff.
ISSUE: Whether the lower court erred in enforcing the law of California
HELD:
At the time the obligation was incurred by the defendant, Muzzal owned 1,433 shares of stock of the
corporation Meyer-Muzzal Company when it contracted the obligations alleged in the complaint.
The herein defendant is chargeable with notice of the law of California as to the liability of stockholders for
debt of a corporation proportionate to their stock holdings, in view of the fact that he was one of the
incorporators of the Meyer-Muzzal Company in the year 1924 and was still a stockholder in that company
in the year 1928. Exhibit 10 of the plaintiff is a certified company of the articles of incorporation of Meyer-
Muzzal Company in which it appears that that company was incorporated on August 22, 1924, and that
the incorporators were A.H. Muzzal, Leo W. Meyer and James Rolph, Jr., "all of whom are residents and
citizens of the State of California." The defendant cannot now escape liability by alleging that the
California law is unjust and different from the inconsistent with the Philippine Corporation Law.
The judgment of the trial court is affirmed with costs in both instances against the defendant-appellant.
5) CIR VS. FISHERG.R. No. L-11622 January 28, 1961
THE COLLECTOR OF INTERNAL REVENUE, petitioner,
vs.
DOUGLAS FISHER AND BETTINA FISHER, and the COURT OF TAX APPEALS, respondents.
x---------------------------------------------------------x
G.R. No. L-11668 January 28, 1961.
DOUGLAS FISHER AND BETTINA FISHER, petitioner,
vs.
THE COLLECTOR OF INTERNAL REVENUE, and the COURT OF TAX APPEALS, respondents.
DOCTRINE:
“Reciprocity must be total. If any of the two states collects or imposes or does not exempt any transfer, death, legacy
or succession tax of any character, the reciprocity does not work.”
FACTS:
Walter G. Stevenson was born in the Philippines of British parents, married in Manila to another British
subject, Beatrice. He died in 1951 in California where he and his wife moved to. In his will, he instituted
Beatrice as his sole heiress to certain real and personal properties, among which are 210,000 shares
of stocks in Mindanao Mother Lode Mines (Mines). Ian Murray Statt (Statt), the appointed ancillary
administrator of his estate filed an estate and inheritance tax return. He made a preliminary return to
secure the waiver of the CIR on the inheritance of the Mines shares of stock. In 1952, Beatrice assigned
all her rights and interests in the estate to the spouses Fisher. Statt filed an amended estate and
inheritance tax return claiming ADDITIOANL EXEMPTIONS, one of which is the estate and inheritance
tax on the Mines’ shares of stock pursuant to a reciprocity proviso in the NIRC, hence, warranting a refund
from what he initially paid. The collector denied the claim. He then filed in the CFI of Manila for the said
amount.
CFI ruled that (a) the ½ share of Beatrice should be deducted from the net estate of Walter, (b) the
intangible personal property belonging to the estate of Walter is exempt from inheritancetax pursuant to
the reciprocity proviso in NIRC.
ISSUE/S:
Whether or not the estate can avail itself of the reciprocity proviso in the NIRC granting exemption from
the payment of taxes for the Mines shares of stock?
RULING:NO.
Reciprocity must be total. If any of the two states collects or imposes or does not exempt anytransfer,
death, legacy or succession tax of any character, the reciprocity does not work.
In the Philippines, upon the death of any citizen or resident, or non-resident with properties, there are
imposed upon his estate, both an estate and an inheritance tax but, under the laws of California,
only inheritance tax is imposed.
Also, although the Federal Internal Revenue Code imposes an estate tax, it does not grant exemption on
the basis of reciprocity. Thus, a Filipino citizen shall always be at a disadvantage. This is not what the
legislators intended.
SPECIFICALLY:
Section122 of the NIRC provides that “No tax shall be collected under this Title in respect of intangible
personal property (a) if the decedent at the time of his death was a resident of a foreign country which at
the time of his death did not impose a transfer of tax or death tax of any character in respect of
intangible personal property of citizens of the Philippines not residing in that foreign country, or
(b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a
similar exemption from transfer taxes or death taxes of every character in respect of intangible personal
property owned by citizens of the Philippines not residing in that foreign country."On the other hand, Section
13851 of the California Inheritance Tax Law provides that intangible personal property is exempt from tax
if the decedent at the time of his death was a resident of a territory or another State of the United States or
of a foreign state or country which then imposed a legacy, succession, or death tax in respect to intangible
personal property of its own residents, but either:
(1)Did not impose a legacy, succession, or death tax of any character in respect to intangible personal
property of residents of this State, OR
(2)Had in its laws a reciprocal provision under which intangible personal property of a non-resident was
exempt from legacy, succession, or death taxes of every character if the Territory or other State of the
United States or foreign state or country in which the nonresident resided allowed a similar exemption in
respect to intangible personal property of residents of the Territory or State of the United States or foreign
state or country of residence of the decedent."
In all other respects, the decision of the Court of Tax Appeals is affirmed.
Respondent's claim for interest on the amount allegedly overpaid, if any actually results after a
recomputation on the basis of this decision is hereby denied in line with our recent decision
in Collector of Internal Revenue v. St. Paul's Hospital (G.R. No. L-12127, May 29, 1959) wherein we
held that, "in the absence of a statutory provision clearly or expressly directing or authorizing
such payment, and none has been cited by respondents, the National Government cannot be
required to pay interest."
WHEREFORE, as modified in the manner heretofore indicated, the judgment of the lower court is
hereby affirmed in all other respects not inconsistent herewith. No costs. So ordered.
6) PARDO V REPUBLIC (1950)
FACTS
Vicente Rosal Pardo is a Spanish citizen born in Spain, residing in the Philippines, and at present
employed in Manila. He has been adjudged by the Court of First Instance as entitled to become a Filipino
citizen. (Side issue: That he is unable to speak and write any of the principal Filipino languages is the first
ground of appeal by the Government)
Pardo introduced a certificate signed by the Consul General of Spain in the Philippines, stating that in
accordance with articles 17 and 25 of the Spanish Civil Code, Filipinos are eligible to Spanish citizenship
in Spain. Article 17 provides that foreigners who have obtained a certificate of naturalization and those
who have not obtained such certificate but have acquired domicile in any town of the Monarchy are
Spaniards. No discrimination being made in these provisions, they apply to persons of any nationality.
ISSUE: Whether the certification of the supposed naturalization laws of Spain made by the Spanish
Consul General constitutes competent proof of that law.
HELD
(Side issue: The fact that Pardo has lived in the Philippines for 44 years continuously, mingling and
dealing by reason of his work with people who use Tagalog in their daily intercourse, lends credence to
his testimony that he has acquired a good working knowledge of that language)
As the Spanish Civil Code has been and still is "the basic code in force in the Philippines," articles 17 et
seq. thereof may be regarded as matters known to judges of the Philippines by reason of their judicial
functions and may be judicially recognized by them without the introduction of proof. (Section 5, Rule 123)
Moreover, in a number of decisions mere authentication of the Chinese Naturalization Law by the Chinese
Consulate General of Manila has been held to be competent proof of that law. (Yap vs. Solicitor General)
We realize that a copy of a foreign law certified only by the local consul of the applicant's country does not
conform to the requirement concerning the certification and authentication of such law (Sec. 41, Rule
123). But the case at bar is not governed by the Rules of Court. Rule 182, entitled "Applicability of the
Rules," provides that "These rules shall not apply to land registration, cadastral and election cases,
naturalization and insolvency proceedings, and other cases not herein provided for, except by analogy or
in a suppletory character and whenever practicable and convenient." By reason of this provision, literal
adherence to the Rules of Court, which include rules of evidence, is not obligatory in a proceeding like that
under consideration. While naturalization proceeding under the Philippine law is judicial in character, and
strict compliance with the process prescribed by statute, if there were one, would be essential, yet when,
as here, no specific procedure is indicated in the premises, it is only necessary that the merits of the
petition be passed on and a decision reached on a fair consideration of the evidence on satisfactory proof.
Accordingly, evidence of the law of a foreign country on reciprocity regarding the acquisition of
citizenship, although not meeting the prescribed rule of practice by Section 41 of Rule 123, may be
allowed and used as basis for a favorable action if, in the light of all the circumstances, the court
is satisfied of the authenticity of the written proof offered.
Judgment affirmed. Motion for reconsideration denied.
7) PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK (PCIB) v ESCOLIN (1974)
FACTS:
Linnie Jane Hodges an American (Texas) citizen left a will executed in November 1952. She died in 1957
in the Philippines (Iloilo City) where she was also domiciled at that time. In her will, she left ALL her estate
in favor of her husband, Charles Newton Hodges after all debts and funeral expenses had first been paid
out of her estate. She also stated in her will that she is bequeathing and devising in equal distribution the
remaining of her estate once Charles Hodges later die in favor of her 7 siblings. Linnie likewise appointed
Charles as the executor of her estate.
Atty. Leon Gellada represents Charles in the probate proceeding of Linnie's estate. When Charles died in
1962, there was still an ongoing probate of Linnie's will. Hence, Charles died without liquidating Lennie's
estate. Consequently Atty. Gellada filed a motion before the probate court to have Avelina Magno
appointed as the administratix of the estate. Magno had been under employ of spouses Linnie and
Charles for around 30 years and is known to be the most trusted. Manifested in the same motion was the
fact that Charles had left a will but was kept in an iron truck in Charle's office. The probate court through
Judge Escolin appointed Magno as the Administratrix of Linnie's estate and Special Administratrix
of Charle's estate.
Later Harold Davies (representative of Charles’ heirs in the US) was designated Co-Special Administrator,
who was then replaced by one Joe Hodges, Charles’nephew. One Atty. Mirasol was also appointed as co-
administrator, and an order of probate and letters of administration were issued to Hodges and Mirasol.
At this point, the SC was already very much confused about the gaps in the facts, convinced that the
parties representing both estates had cooked up a modus operandi to settle money matters (a settlement
with records the Court never saw)— which, however, went awry, with more and more heirs from the US
flocking to the Iloilo shores, and lawyers filing their respective claims for retainer fees. Much much later,
PCIB became the administrator of Charles’ estate, asserting a claim to all of his estate, including those
properties/assets that passed to him upon Linnie Jane’s death. Avelina naturally opposed this, as Linnie
Jane’s other heirs (the HIGDONS) would be prejudiced, so she continued acting in her capacity as
administrator (entering into sales and other such conveyances). For these acts, the PCIB dismissed her
as an employee of Charles’ estate, to which she responded by locking up the premises being used by
PCIB as offices, which were among the estate’s properties.
PCIB was claiming that Linnie's will should be governed by Philippine law, with respect to the order of
succession, the amoutn of successional rights and the intrinsic validity of its testamentary provisions.
ISSUE: Whether or not Philippine law governs the partition and liquidation of Linnie's estate.
HELD: Remanded
The parties were in disagreement as to how Article 16 of the Civil Code should be applied. On the one
hand, PCIB claimed that inasmuch as Linnie was a resident of the Philippines at the time of her death,
under said Article 16, construed in relation to the pertinent laws of Texas and the principle of renvoi, what
should be applied here should be the rules of succession under the Civil Code, and, therefore, her estate
could consist of no more than one-fourth of the said conjugal properties, the other fourth being, as already
explained, the legitime of her husband (Art. 900) which she could not have disposed of nor burdened with
any condition (Art. 872). On the other hand, Magno denied that Linnie died a resident of the Philippines,
since allegedly she never changed nor intended to change her original residence of birth in Texas, United
States of America, and contends that, anyway, regardless of the question of her residence, she being
indisputably a citizen of Texas, under said Article 16 of the Civil Code, the distribution of her estate is
subject to the laws of said State which, according to her, do not provide for any legitime, hence, Linnie’s
brothers and sisters are entitled to the remainder of the whole of her share of the conjugal partnership
properties consisting of one-half thereof. Magno further maintained that, in any event, Charles had
renounced his rights under the will in favor of his coheirs, as allegedly proven by the documents touching
on the point already mentioned earlier, the genuineness and legal significance of which PCIB questioned.
The Court cannot decide on the claims, though, for neither the evidence submitted by the parties
appeared to be adequate enough for it to render an intelligent comprehensive and just resolution.
No clear and reliable proof of what in fact the possibly applicable laws of Texas are, was presented
(Remember judicial notice in case of foreign laws). Then also, the genuineness of documents
relied upon by Magno is disputed. In Justice, therefore, to all the parties concerned, these and all
other relevant matters should first be threshed out fully in the trial court in the proceedings
thereafter to be held for the purpose of ascertaining and adjudicating and/or distributing the estate
of Linnie to her heirs in accordance with her duly probated will.
DISPOSITION:
Remand for determination of proper application of Art. 16, CC (renvoi), and of Charles’ alleged
renunciation of his inheritance under Linnie’s will. Magno remains to be the administrator of Linnie’s
estate. The said estate consists of ¼ of the community properties of the said spouses, as of the time of
Linnie’s death on May 23, 1957, minus whatever the husband had already gratuitously disposed of in
favor of third persons from said date until his death, provided, first, that with respect to remunerative
dispositions, the proceeds thereof shall continue to be part of the wife's estate, unless subsequently
disposed of gratuitously to third parties by the husband, and second, that should the purported
renunciation be declared legally effective, no deductions whatsoever are to be made from said estate.
PCIB and Magno should act thenceforth always conjointly, never independently from each other,
as administrators.
8) ZALAMEA VS. CA AND TRANSWORLD AIRLINES INC.
G.R. No. 104235 (November 18, 1993)
FACTS: Spouses Cesar and SuthiraZalamea, and their daughter, purchased three (3) airline tickets
from the Manila agent of respondent TransWorld Airlines, Inc. (TWA) for a flight from New York to Los
Angeles on June 6, 1984. The tickets of the spouses were purchased at a discount of 75% while that of
their daughter was a full fare ticket. All three tickets represented confirmed reservations.
While in New York, on June 4, 1984, the spouses Zalamea and their daughter received a notice of
reconfirmation of their reservations for said flight. On the appointed date, however, the spouses Zalamea
and their daughter checked in at 10:00 am, an hour earlier than the scheduled flight at 11:00 am but were
placed on the wait-list because the number of passengers who 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 Cesar Zalamea. The two others, on the other hand, being ranked lower than 22,
were not able to fly. As it were, those holding full-fare ticket 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 full booked. Thus, they were constrained to book in another flight and purchased two
tickets from American Airlines.
Upon their arrival in the Philippines, the spouses Zalamea filed an action for damages based on
breach of contract of air carriage before the RTC of Makati which rendered a decision in their favor
ordering the TWA to pay the price of the tickets bought from American Airlines together with moral
damages and attorney’s fees. On appeal, the 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. It further stated
that 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, neither fraud nor bad faith could be imputed on TWA.
ISSUE: Whether or not the CA erred in accepting the finding that overbooking is specifically allowed by
the US Code of Federal Regulations and in holding that there was no fraud or bad faith on the part of
TWA. (Yes)
HELD: There was fraud or bad faith on the part of TWA when it did not allow Mrs. Zalamea and her
daughter to board their flight for Los Angeles in spite of confirmed tickets. The US law or regulation
allegedly authorizing overbooking has never been proved.
Foreign laws do not prove themselves nor can the court 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 officers having 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 Phil. stationed in the foreign country in which the record is kept and authenticated by
the seal of his office.
Here, TWA relied solely on the testimony of its customer service agent in her deposition that the Code
of Federal Regulations of the Civil Aeronautic Board allows overbooking. Aside from said statement, no
official publication of said code was presented as evidence. Thus, the CA’s 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.
Likewise, existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
the passengers concerned to an award of moral damages.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court of
Appeals is hereby MODIFIED to the extent of adjudging respondent TransWorld Airlines to pay damages
to petitioners.
9) MANUFACTIRERS HANOVER TRUST VS. GUERRERO (2005)
10) CRESCENT PETROLEUM, LTD. vs. M/V “LOK MAHESHWARI,” THE SHIPPING CORPORATION
OF INDIA, and PORTSERV LIMITED – G.R. No. 155014 November 11, 2005
FACTS:
Respondent M/V “Lok Maheshwari” (Vessel) is an oceangoing vessel of Indian registry that is owned by
respondent Shipping Corporation of India (SCI), a corporation organized and existing under the laws of
India and principally owned by the Government of India. It was time-chartered by respondent SCI to Halla
Merchant Marine Co. Ltd. (Halla), a South Korean company. Halla, in turn, sub-chartered the Vessel
through a time charter to Transmar Shipping, Inc. (Transmar). Transmar further sub-chartered the Vessel
to Portserv Limited (Portserv). Both Transmar and Portserv are corporations organized and existing under
the laws of Canada.
On or about November 1, 1995, Portserv requested petitioner Crescent Petroleum, Ltd. (Crescent), a
corporation organized and existing under the laws of Canada that is engaged in the business of selling
petroleum and oil products for the use and operation of oceangoing vessels, to deliver marine fuel oils
(bunker fuels) to the Vessel. Petitioner Crescent granted and confirmed the request through an advice via
facsimile dated November 2, 1995. As security for the payment of the bunker fuels and related services,
petitioner Crescent received two (2) checks in the amounts of US$100,000.00 and US$200,000.00. Thus,
petitioner Crescent contracted with its supplier, Marine Petrobulk Limited (Marine Petrobulk), another
Canadian corporation, for the physical delivery of the bunker fuels to the Vessel.
By November 4, 1995, Marine Petrobulk delivered the bunker fuels amounting to US$103,544 inclusive of
barging and demurrage charges to the Vessel at the port of Pioneer Grain, Vancouver, Canada. The Chief
Engineer Officer of the Vessel duly acknowledged and received the delivery receipt. Marine Petrobulk
issued an invoice to petitioner Crescent for the US$101,400.00 worth of the bunker fuels. Petitioner
Crescent issued a check for the same amount in favor of Marine Petrobulk, which check was duly
encashed.
Having paid Marine Petrobulk, petitioner Crescent issued a revised invoice dated November 21, 1995 to
"Portserv Limited, and/or the Master, and/or Owners, and/or Operators, and/or Charterers of M/V ‘Lok
Maheshwari’" in the amount of US$103,544.00 with instruction to remit the amount on or before December
1, 1995. The period lapsed and several demands were made but no payment was received. Also, the
checks issued to petitioner Crescent as security for the payment of the bunker fuels were dishonored for
insufficiency of funds. As a consequence, petitioner Crescent incurred additional expenses of
US$8,572.61 for interest, tracking fees, and legal fees.
On May 2, 1996, while the Vessel was docked at the port of Cebu City, petitioner Crescent instituted
before the RTC of Cebu City an action "for a sum of money with prayer for temporary restraining order
and writ of preliminary attachment" against respondents Vessel and SCI, Portserv and/or Transmar.
On May 3, 1996, the trial court issued a writ of attachment against the Vessel with bond at P2,710,000.00.
Petitioner Crescent withdrew its prayer for a temporary restraining order and posted the required bond.
On May 18, 1996, summonses were served to respondents Vessel and SCI, and Portserv and/or
Transmar through the Master of the Vessel. On May 28, 1996, respondents Vessel and SCI, through
Pioneer Insurance and Surety Corporation (Pioneer), filed an urgent ex-parte motion to approve Pioneer’s
letter of undertaking, to consider it as counter-bond and to discharge the attachment. On May 29, 1996,
the trial court granted the motion; thus, the letter of undertaking was approved as counter-bond to
discharge the attachment.
RTC: In favor of Crescent - respondents declared in default
CA: Dismissed the case for want of jurisdiction - on the ground of forum non conveniens considering that
the parties are foreign corporations which are not doing business in the Philippines.
ISSUE:
Whether the Philippine court has or will exercise jurisdiction and entitled to maritime lien under our laws
on foreign vessel docked on Philippine port and supplies furnished to a vessel in a foreign port? (No.
Case should be dismissed. PH has no jurisdiction)
RULING:
(This case was decided in two-tier: 1) based on forum non conveniens, and 2) based on the doctrine of
processual presumption)
In a suit to establish and enforce a maritime lien for supplies furnished to a vessel in a foreign port, SO ORDERED.
whether such lien exists, or whether the court has or will exercise jurisdiction, depends on the law of the
country where the supplies were furnished, which must be pleaded and proved. 11) EDI-Staff Builders int’l vs. NLRC - FAUSTINO

The Lauritzen-Romero-Rhoditis (see note in the next paragraph) trilogy of cases, which replaced such
single-factor methodologies as the law of the place of supply. The multiple-contact test to determine, in
the absence of a specific Congressional directive as to the statute’s reach, which jurisdiction’s law
should be applied. The following factors were considered: (1) place of the wrongful act; (2) law of the
flag; (3) allegiance or domicile of the injured; (4) allegiance of the defendant shipowner; (5) place of
Exceptions To The Application Of Foreign Law
contract; (6) inaccessibility of foreign forum; and (7) law of the forum. This is applicable not only to
personal injury claims arising under the Jones Act but to all matters arising under maritime law in general.
12) DACANAY VS. FLORENDO (1950)
Note:
1. Lauritzen vs. Larsen – Multiple contact test: (1) place of the wrongful act; (2) law of the flag; (3) FACTS: Isabel V. Florendo having died, her surviving spouse Tirso Dacanay is seeking to probate said
allegiance or domicile of the injured; (4) allegiance of the defendant shipowner; (5) place of joint and reciprocal will, which provides in substance that whoever of the spouses, joint testators, shall
contract; (6) inaccessibility of foreign forum; and (7) law of the forum. survive the other, shall inherit all the properties of the latter, with an agreement as to how the surviving
2. Romero v. International Terminal Operating Co. – the factors first announced in the case of spouse shall dispose of the properties in case of his or her demise. The relatives of the deceased Isabel
Lauritzen were applicable not only to personal injury claims arising under the Jones Act but to all
V. Florendo opposed the probate of said will on various statutory grounds
matters arising under maritime law in general.
3. Hellenic Lines, Ltd. v. Rhoditis – The U.S. Supreme Court observed that of the seven factors listed in
the Lauritzen test, four were in favor of the shipowner (in that case) and against jurisdiction. the list of Trial Court: petition for probate was dismissed on the ground that said will is null and void ab initio as
seven factors in Lauritzen was not intended to be exhaustive. x x x [T]he shipowners base of having been executed in violation of article 669 of the Civil Code.
operations is another factor of importance in determining whether the Jones Act is applicable; and
there well may be others.
ART. 669. Two or more persons cannot make a will conjointly or in the same instrument, either
for their reciprocal benefit or for the benefit of a third person.
The Court cannot sustain petitioner Crescent’s insistence on the application of P.D. No. 1521 or the Ship
Mortgage Decree of 1978 and hold that a maritime lien exists. Out of the seven basic factors listed in
the case of Lauritzen, Philippine law only falls under one – the law of the forum. All other elements Appellant Dacanay argues that article 669 of the Civil Code has been repealed by Code of Civil
are foreign – Canada is the place of the wrongful act, of the allegiance or domicile of the injured Procedure, Act. No. 190, which he claims provides for and regulates the extrinsic formalities of wills,
and the place of contract; India is the law of the flag and the allegiance of the defendant contending that whether two wills should be executed conjointly or separately is but a matter of extrinsic
shipowner. Applying P.D. No. 1521,a maritime lien exists would not promote the public policy behind the formality.
enactment of the law to develop the domestic shipping industry. Opening up our courts to foreign
suppliers by granting them a maritime lien under our laws even if they are not entitled to a maritime lien ISSUE: Whether or not Article 669 had been repealed
under their laws will encourage forum shopping. In light of the interests of the various foreign
elements involved, it is clear that Canada has the most significant interest in this dispute. The
HELD: No.
injured party is a Canadian corporation, the sub-charterer which placed the orders for the supplies is also
Canadian, the entity which physically delivered the bunker fuels is in Canada, the place of contracting and
negotiation is in Canada, and the supplies were delivered in Canada. The prohibition of article 669 of the Civil Code is directed against the execution of a joint will, or the
expression by two or more testators of their wills in a single document and by one act, rather than against
It is worthy to note that petitioner Crescent never alleged and proved Canadian law as basis for the mutual or reciprocal wills, which may be separately executed.
existence of a maritime lien. It is well-settled that a party whose cause of action or defense depends upon
a foreign law has the burden of proving the foreign law. Petitioner Crescents insistence on enforcing a The question now raised by appellant has recently been decided by this court adversely to him in In re Will
maritime lien before our courts depended on the existence of a maritime lien under the proper law. By of Victor Bilbao:
erroneously claiming a maritime lien under Philippine law instead of proving that a maritime lien exists
under Canadian law, petitioner Crescent failed to establish a cause of action. Even if foreign law applies,
since the same was not properly pleaded and proved, such foreign law must be presumed to be We cannot agree to the contention of the appellant that the provisions of the Code of Civil
the same as Philippine law pursuant to the doctrine of processual presumption. Procedure on wills have completely superseded Chapter I, Title III of the Civil Code on the same
subject matter.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. No. CV 54920, dated November
28, 2001, and its subsequent Resolution of September 3, 2002 are AFFIRMED. The instant petition for The provision of article 669 of the Civil Code prohibiting the execution of a will by two or more
review on certiorari is DENIED for lack of merit. Cost against petitioner. persons conjointly or in the same instrument either for their reciprocal benefit or for the benefit of
a third person, is not unwise and is not against public policy. The reason for this provision,
 especially as regards husband and wife, is that when a will is made jointly or in the same
instrument, the spouse who is more aggressive, stronger in will or character and dominant is
liable to dictate the terms of the will for his or her own benefit or for that of third persons whom he
or she desires to favor. And, where the will is not only joint but reciprocal, either one of the
spouses who may happen to be unscrupulous, wicked, faithless or desperate, knowing as he or
she does the terms of the will whereby the whole property of the spouses both conjugal and
paraphernal goes to the survivor, may be tempted to kill or dispose of the other.
Considering the wisdom of the provisions of this article 669 and the fact that it has not been
repealed, at least not expressly, as well as the consideration that its provisions are not
incompatible with those of the Code of Civil Procedure on the subject of wills, we believe and rule
that said article 669 of the Civil Code is still in force.
In view of the foregoing, the order appealed from is affirmed, with costs against the appellant.
13) YAO KEE, ET. AL. VS. SY-GONZALES (1988)
PETITIONERS:YAO KEE, SZE SOOK WAH, SZE LAI CHO, and SY CHUN YEN
RESPONDENTS: AIDA SY-GONZALES, MANUEL SY, TERESITA SY-BERNABE, RODOLFO SY, and
HONORABLE COURT OF APPEALS
DOCKET NO.: GR No. L-55960
DATE: November 24, 1988
PONENTE: Cortes, J.
FACTS:
• Sy Kiat, a Chinese national, residing in Caloocan City, died on January 17, 1977 leaving behind
properties here in the Philippinesworth P300,000.00 more or less.
• Thereafter, Aida Sy-Gonzales et al filed a petition for the grant of letters of administration alleging that;
(a) they are the children of the deceased with Asuncion Gillego;
(b) to their knowledge Sy Mat died intestate;
(c) they do not recognize Sy Kiat's marriage to Yao Kee nor the filiation of her children to him;
and,
(d) they nominate Aida Sy-Gonzales for appointment as administratrix of the intestate estate
• The petition was opposed by Yao Kee et al alleging that;
(a) Yao Kee is the lawful wife of Sy Kiat whom he married on January 19, 1931 in China;
(b) the other oppositors are the legitimate children of the deceased with Yao Kee; and,
(c) Sze Sook Wah is the eldest among them and is competent, willing and desirous to become
the administratrix of the estate of Sy Kiat
PROBATE COURT: rendered decision in favor of Yao Kee.
CA: Modified the decision.
(1) Declaring petitioners Aida Sy-Gonzales et. al. as acknowledged natural children of the deceased with
Asuncion Gillego, an unmarried woman with whom he lived as husband and wife without benefit of
marriage for many years:
(2) Declaring oppositors Sze Sook Wah et.al. as the acknowledged natural children of the deceased Sy
Kiat with Yao Kee, since the legality of the alleged marriage of Sy Mat to Yao Kee in China had not
been proven to be valid to the laws of the Chinese People's Republic of China
(3) Declaring the deed of sale executed by Sy Kiat to be valid and be excluded from the estate; and
(4) Affirming the appointment by the lower court of Sze Sook Wah as judicial administratrix of the estate of
the deceased.
Both parties moved for recon, questioning paragraphs (3) and (4) of the dispositive portion of the CA's
decision, but subsequently denied by SC.
This petition questions paragraphs (1) and (2) of the dispositive portion of the decision of CA. SC initially
denied the appeal but decided to give due course this petition upon motion for recon.
YAO KEE et al:Petitioners argue that the marriage of Sy Kiat to Yao Kee in accordance with Chinese law
and custom was conclusively proven. To buttress this argument they rely on the testimonial and
documentary evidence of Yao Kee herself, Gan Ching, a younger brother of Yao Kee, Asuncion Gillego,
and documents which states that Sy Kiat is married.
ISSUE #1: W/N the marriage of Sy Kiat with Yae Kee was duly proven to be valid in accordance with
Laws of China
HELD: These evidence may very well prove the fact of marriage between Yao Kee and Sy Kiat. However,
the same do not suffice to establish the validity of said marriage in accordance with Chinese law or
custom.
Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced) as a
social rule, legally binding and obligatory”. The law requires that "a custom must be proved as a fact,
according to the rules of evidence" [Article 12, Civil Code.] On this score the Court had occasion to state
that "a local custom as a source of right can not be considered by a court of justice unless such custom is
properly established by competent evidence like any other fact”. The same evidence, if not one of a higher
degree, should be required of a foreign custom.
The law on foreign marriages is provided by Article 71 of the Civil Code which states that:
Art. 71. All marriages performed outside the Philippines in accordance with the laws in force in
the country where they were performed and valid there as such, shall also be valid in this country,
except bigamous, Polygamous, or incestuous marriages, as determined by Philippine law.
Construing this provision of law the Court has held that to establish a valid foreign marriage two things
must be proven, namely: (1) the existence of the foreign law as a question of fact; and (2) the alleged
foreign marriage by convincing evidence.
In proving a foreign law the procedure is provided in the Rules of Court. With respect to an unwritten
foreign law, Rule 130 section 45 states that:
SEC. 45.Unwritten law.—The oral testimony of witnesses, skilled therein, is admissible as evidence
of the unwritten law of a foreign country, as are also printed and published books of reports of
decisions of the courts of the foreign country, if proved to be commonly admitted in such courts.
Proof of a written foreign law, on the other hand, is provided for under Rule 132 section 25, thus:
SEC. 25.Proof of public or official record.—An official record or an entry therein, when admissible
for any purpose, 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, if the record is
not kept in the Philippines, with a certificate that such officer has the custody. If the office in which
the record is kept is in a foreign country, the certificate may be made by a secretary of 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.
The Court has interpreted section 25 to include competent evidence like the testimony of a witness to
prove the existence of a written foreign law
In the case at bar petitioners did not present any competent evidence relative to the law and
custom of China on marriage. The testimonies of Yao and Gan Ching cannot be considered as
proof of China's law or custom on marriage not only because they areself-serving evidence, but
more importantly, there is no showing that they are competent to testify on the subject matter.
For failure to prove the foreign law or custom, and consequently, the validity of the marriage in
accordance with said law or custom, the marriage between Yao Kee and Sy Kiat cannot be
recognized in this jurisdiction.
ISSUE #2: W/N court may take Judicial Noticeof Laws of China
HELD:No. Well-established in this jurisdiction is the principle that Philippine courts cannot take judicial
notice of foreign laws. They must be alleged and proved as any other fact.In the absence of proof of the
Chinese law on marriage, it should be presumed that it is the same as ours
ISSUE #3: W/N the status of private respondents shall be an acknowledged natural children or legitimate
children.
HELD: Petitioners failed to establish the marriage of Yao Kee with Sy Mat according to the laws of China,
they cannot be accorded the status of legitimate children but only that of acknowledged natural children.
Petitioners are natural children, it appearing that at the time of their conception Yao Kee and Sy Kiat were
not disqualified by any impediment to marry one another [See Art. 269, Civil Code.] And they are
acknowledged children of the deceased because of Sy Kiat's recognition.
Private respondents on the other hand are also the deceased's acknowledged natural children with
Asuncion Gillego, a Filipina with whom he lived for twenty-five (25) years without the benefit of marriage.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED.
14) BANK OF AMERICA V. AMERICAN REALTY CORPORATION (1999)
BANK OF AMERICA, NT and SA, vs. AMERICAN REALTY CORPORATION and COURT OF
APPEALS
G.R. No. 133876, December 29, 1999
FACTS: Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing
institution duly licensed to do business in the Philippines, organized and existing under and by virtue of
the laws of the State of California, United States of America while private respondent American Realty
Corporation (ARC) is a domestic corporation. Bank of America International Limited (BAIL), on the other
hand, is a limited liability company organized and existing under the laws of England.
BANTSA & BAIL granted three major multi-million United States (US) Dollar loans to the
following corporate borrowers: (1) Liberian Transport Navigation, S.A.; (2) El Challenger S.A. and (3)
EshleyCompaniaNaviera S.A. (hereinafter collectively referred to as borrowers), all of which are existing
under and by virtue of the laws of the Republic of Panama and are foreign affiliates of private respondent.
Due to the default in the payment of the loan amortizations, BANTSA and the corporate
borrowers signed and entered into restructuring agreements. As additional security for the restructured
loans, private respondent American Realty Corporation (ARC) as third party mortgagor executed two
real estate mortgages over its parcels of land including improvements thereon, located at Barrio Sto.
Cristo, San Jose Del Monte, Bulacan.
Eventually, the corporate borrowers defaulted in the payment of the restructured loans prompting
petitioner BANTSA to file civil actions before foreign courts for the collection of the principal loan, to wit:
a) In England, in its High Court of Justice, Queens Bench Division, Commercial Court
(1992-Folio No. 2098) against Liberian Transport Navigation S.A.,
EshleyCompaniaNaviera S.A., El Challenger S.A., Espriona Shipping Company
S.A., Eddie Navigation Corp., S.A., Eduardo KatipunanLitonjua and Aurelio
KatipunanLitonjua on June 17, 1992.
b) In England, in its High Court of Justice, Queens Bench Division, Commercial Court
(1992-Folio No. 2245) against El Challenger S.A., Espriona Shipping Company
S.A., Eduardo KatipuanLitonjua& Aurelio KatipunanLitonjua on July 2, 1992;
c) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4039 of
1992) against EshleyCompaniaNaviera S.A., El Challenger S.A., Espriona Shipping
Company S.A. Pacific Navigators Corporation, Eddie Navigation Corporation S.A.,
Litonjua Chartering (Edyship) Co., Inc., Aurelio KatipunanLitonjua, Jr. and Eduardo
KatipunanLitonjua on November 19, 1992; and
d) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4040 of
1992) against EshleyCompaniaNaviera S.A., El Challenger S.A., Espriona Shipping
Company, S.A., Pacific Navigators Corporation, Eddie Navigation Corporation S.A.,
Litonjua Chartering (Edyship) Co., Jr. and Eduardo KatipunanLitonjua on
November 21, 1992.
BANTSA then filed before the Office of the Provincial Sheriff of Bulacan, Philippines, an
application for extrajudicial foreclosure of real estate mortgage. After due publication and notice,
the mortgaged real properties were sold at public auction in an extrajudicial foreclosure sale, with
Integrated Credit and Corporation Services Co. (ICCS) as the highest bidder for the sum of
P24,000,000.00.
ARC filed before the RTC Pasig, Br. 159 an action for damages against the petitioner,
for the latters act of foreclosing extrajudicially the real estate mortgages despite the pendency of
civil suits before foreign courts for the collection of the principal loan.
In its Answer, petitioner BANTSA alleged that the rule prohibiting the mortgagee from
foreclosing the mortgage after an ordinary suit for collection has been filed, is not applicable in
the present case, claiming that:
 a) The plaintiff, being a mere third party mortgagor and not a party to the principal
restructuring agreements, was never made a party defendant in the civil cases filed
in Hongkong and England;
b) There is actually no civil suit for sum of money filed in the Philippines since the civil
actions were filed in Hongkong and England. As such, any decisions (sic) which
may be rendered in the abovementioned courts are not (sic) enforceable in the
Philippines unless a separate action to enforce the foreign judgments is first filed in
the Philippines, pursuant to Rule 39, Section 50 of the Revised Rules of Court.
c) Under English Law, which is the governing law under the principal agreements, the
mortgagee does not lose its security interest by filing civil actions for sums of
money.
ARC then filed a motion for suspension of the redemption period on the ground that it
cannot exercise said right of redemption without at the same time waiving or contradicting its
contentions in the case that the foreclosure of the mortgage on its properties is legally improper
and therefore invalid. The same was granted by the trial court.
Meanwhile, ICCS, the purchaser of the mortgaged properties at the foreclosure sale,
consolidated its ownership over the real properties. Thereafter, it sold the real properties to
Stateland Investment Corporation for P39,000,000.
After the trial for the action for damages filed by ARC, the trial court rendered a decision
it its favour, declaring that the filing in foreign courts by the defendant of collection suits against
the principal debtors operated as a waiver of the security of the mortgages. Consequently, the
plaintiff’s (ARC) rights as owner and possessor of the properties then covered by Transfer
Certificates of Title Nos. T-78759, T-78762, T-78763, T-78760 and T-78761, all of the Register of
Deeds of Meycauayan, Bulacan, Philippines, were violated when the defendant (BANTSA)
caused the extrajudicial foreclosure of the mortgages constituted thereon.
CA affirmed the TC decision prompting BANTSA to file an MR, which the appellate
court denied.
ISSUES:
1. WON the petitioner’s act of filing a collection suit against the principal debtors for the
recovery of the loan before foreign courts constituted a waiver of the remedy of
foreclosure
2. WON the award by the lower court of actual and exemplary damages in favor of private
respondent ARC, as third-party mortgagor, is proper
HELD:
1. NO.
According to petitioner, the mere filing of a personal action to collect the principal loan
does not suffice; a final judgment must be secured and obtained in the personal action
so that waiver of the remedy of foreclosure may be appreciated. To put it differently,
absent any of the two requisites, the mortgagee-creditor is deemed not to have waived
the remedy of foreclosure.
The SC does not agree.It upholds jurisprudence laid down in Bachrach Motor Co., Inc.
vs. Esteban Icarangal:
In the absence of express statutory provisions, a mortgage creditor may institute against
the mortgage debtor either a personal action for debt or a real action to foreclose the
mortgage. In other words, he may pursue either of the two remedies, but not both. By
such election, his cause of action can by no means be impaired, for each of the two
remedies is complete in itself. Thus, an election to bring a personal action will leave
open to him all the properties of the debtor for attachment and execution, even including
the mortgaged property itself. And, if he waives such personal action and pursues his
remedy against the mortgaged property, an unsatisfied judgment thereon would still
give him the right to sue for a deficiency judgment, in which case, all the properties of
the defendant, other than the mortgaged property, are again open to him for the
satisfaction of the deficiency. In either case, his remedy is complete, his cause of action
undiminished, and any advantages attendant to the pursuit of one or the other remedy
are purely accidental and are all under his right of election. On the other hand, a rule
that would authorize the plaintiff to bring a personal action against the debtor and
simultaneously or successively another action against the mortgaged property, would
result not only in multiplicity of suits so offensive to justice and obnoxious to law and
equity, but also in subjecting the defendant to the vexation of being sued in the place of
his residence or of the residence of the plaintiff, and then again in the place where the
property lies.
In our jurisdiction, the remedies available to the mortgage creditor are deemed
alternative and not cumulative. Notably, an election of one remedy operates as a
waiver of the other. For this purpose, a remedy is deemed chosen upon the filing of the
suit for collection or upon the filing of the complaint in an action for foreclosure of
mortgage, pursuant to the provision of Rule 68 of the 1997 Rules of Civil Procedure. As
to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor
upon filing of the petition not with any court of justice but with the Office of the Sheriff of
the province where the sale is to be made, in accordance with the provisions of Act No.
3135, as amended by Act No. 4118.
In the case at bench, private respondent ARC constituted real estate mortgages over its
properties as security for the debt of the principal debtors. By doing so, private
respondent subjected itself to the liabilities of a third party mortgagor. Under the law,
third persons who are not parties to a loan may secure the latter by pledging or
mortgaging their own property.Notwithstanding, there is no legal provision nor
jurisprudence in our jurisdiction which makes a third person who secures the
fulfillment of another’s obligation by mortgaging his own property, to be
solidarily bound with the principal obligor. The signatory to the principal contract
loan remains to be primarily bound. It is only upon default of the latter that the
creditor may have recourse on the mortgagors by foreclosing the mortgaged
properties in lieu of an action for the recovery of the amount of the loan.
In Bachrach, this Court resolved to deny the creditor the remedy of foreclosure after the
collection suit was filed, considering that the creditor should not be afforded plural
redress for a single breach of contract. For cause of action should not be confused with
the remedy created for its enforcement.
Incidentally, BANTSA alleges that under English Law, which according to petitioner is
the governing law with regard to the principal agreements, the mortgagee does not lose
its security interest by simply filing civil actions for sums of money.The SC ruled in the
negative.In the case at bench, Philippine law shall apply notwithstanding the evidence
presented by petitioner to prove the English law on the matter. In a long line of
 decisions, this Court adopted the well-imbedded principle in our jurisdiction that there is
no judicial notice of any foreign law. A foreign law must be properly pleaded and proved
as a fact. Thus, if the foreign law involved is not properly pleaded and proved, our
courts will presume that the foreign law is the same as our local or domestic or internal
law. This is what we refer to as the doctrine of processual presumption.

If two or more suits are instituted on the basis of the same cause of action, the filing of
one or a judgment upon the merits in any one is available as a ground for the dismissal
of the others.

Moreover, foreign law should not be applied when its application would work undeniable
injustice to the citizens or residents of the forum. To give justice is the most important
function of law; hence, a law, or judgment or contract that is obviously unjust negates
the fundamental principles of Conflict of Laws.

2. YES, but MODIFIED.

We hold that the private respondent is entitled to the award of actual or compensatory
damages inasmuch as the act of petitioner BANTSA in extrajudicially foreclosing the
real estate mortgages constituted a clear violation of the rights of herein private
respondent ARC, as third-party mortgagor.

Similarly, we affirm the grant of exemplary damages although the amount of

P5,000,000.00 awarded, being excessive, is subject to reduction. Exemplary or
corrective damages are imposed, by way of example or correction for the public good,
in addition to the moral, temperate, liquidated or compensatory damages. Considering
its purpose, it must be fair and reasonable in every case and should not be awarded to
unjustly enrich a prevailing party. In our view, an award of P50,000.00 as exemplary
damages in the present case qualifies the test of reasonableness.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The
decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION of the amount
awarded as exemplary damages. Accordingly, petitioner is hereby ordered to pay private
respondent the sum of P99,000,000.00 as actual or compensatory damages; P50,000.00 as
exemplary damage and the costs of suit.