Conflict of Law:

Rules on Property and

Succession

By

Alfar, Shaneen Ray Manla

Batocail, Hazel Joy Virador
Closas, Robert Jones Hondanero
Pulvera, Seymour Binanay
Tan, Charles Jason Gonzaga
Tinsay, Jeorgia Marie Te
Torayno, Marc Van Andrew
Villones, Hanzel Uy
Yap, Roselle Verdadero
College of Law
Xavier University Ateneo de Cagayan
Cagayan de Oro City, Philippines

13 August 2016

PART I: PROPERTY.................................................................3
Introduction................................................................................ 3
Chapter 1: Real Property.............................................................3
General Rule on Conflicts Rules on Real Property: Lex Situs.........4
Exceptions to the Rule in the Case of Real Property......................5
Chapter 2: Tangible Personal Property.........................................6
Personal Properties as Choses in Action or Possession.................6
Old Rule: Mobilia Senquntuur Personam.......................................6
Lex Situs Governs Personal Property.............................................7
Exceptions: When Lex Situs is Not Applied....................................8
Special Rules for Some Choses in Possession...............................8
A. Means of Transportation...........................................................8
B. Thing in Transitu.......................................................................9
Chapter 3: Intangible Personal Property........................................9
Administration of Debts...............................................................10
Negotiable Instruments................................................................11
Corporate Shares of Stock............................................................11
Franchise and Goodwill...............................................................12
Intellectual Properties..................................................................12
PART II: SUCCESSION............................................................12
Introduction.............................................................................. 12
Chapter 1: Validity of the Will....................................................12
Extrinsic validity of wills.............................................................13
Joint Wills; Philippine conflict rules.............................................14
Rules on the Intrinsic Validity......................................................14
Chapter 2: Revocation of Wills...................................................15

Chapter 3: Probate of the Will....................................................16

Chapter 4: Administration of the Deceased person.....................17
Administration of Estates.............................................................17
Rules on the distribution of residue.............................................18

Part I: Property
Introduction
With the globalization of the Philippine economy, Filipinos are
increasingly susceptible to at least one foreign element in their civil
or business transactions. Most, if not all, of these transactions
concern property of some form, whether it be land acquired by
succession, goods exported to other countries, or assignment of
patents and copyrights. Property, according to Philippine law,
pertains to any object susceptible of appropriation. Article 414 of
the New Civil Code enumerates two kinds of property, namely real
property and personal property, and the latter may be further
subdivided into tangible real property and intangible real property.
Upon dispute as to which law governs in transactions with foreign
elements concerning property, Conflict of Law rules applies.
Elementary requisites before a court may proceed with any
case, whether conflict of law or not, includes the acquisition of
jurisdiction over the subject matter, person of the accused, and the
res or thing. Absent such jurisdiction, the court has no alternative
but to dismiss the case; conversely, when the court has jurisdiction,
it may proceed. In conflicts of law cases, however, the court having
acquired jurisdiction may refuse to accept the case on the ground of
forum non conveniens, or proceed, applying the law of the forum or
lex fori, when it is expressly allowed in its conflicts rules. Property
in particular generally follows the rule of lex rei sitei or lex situs, or
the applicable law is the law where the property is located.
Laurel vs Garcia is a peculiar case concerning the Roppongi
property in Japan. In ruling against the application of lex situs, the
Supreme Court reiterated the principle that a conflict of law rule
does not apply when no such situation exists. The Roppongi

property was given to the Philippines by Japan as reparation for

damages done during the war. Despite being located in Japanese
territory, this property does not follow the law of the forum simply
because ownership of the Roppongi property is vested in the
Philippines. Title of the property was not in dispute, and since no
conflict situation exists, lex situs does not apply; hence, the law of
the Philippines shall govern.
Chapter 1: Real Property
Real property is any property attached directly to land as well
as the land itself.1 The Civil Code of the Philippines has no exact
definition of real property but Art415 of the said code provides for
the enumeration of what are immovable properties, which closely
resembles with the general definition of real property. Paras, citing
the case of Standard Oil Co. of New York v. Jaranillo, 44 Phil. 630,
explained that the enumeration in Art. 415 does not give an
absolute criterion as to which properties are real, and which are
personal.2
General Rule on Conflicts Rules on Real Property: Lex Situs
Every conflict rule consists of two parts: (1) the factual
situation consisting the set of facts presenting a conflict problem;
and (2) the point of contact or the connecting factor, that is the law
of the country with which the factual situation is most intimately
connected. With respect to real property, a conflict of law situation
arises only when: (1) there is dispute over the title or ownership of
an immovable, such that the capacity to take and transfer
immovable, the formalities of conveyance, the essential validity and
effect of the transfer, or the interpretation and effect of conveyance,
are to be determined; and (2) a foreign law on land ownership and
its conveyance is asserted to conflict with a domestic law on the
same matters. Hence, the need to determine which law should
apply.3
Since the situs of real property is fixed, inalienable, and
universal, traditionally and necessarily, real property has always
been governed by the lex situs or lex rei sitae, i.e., law of the
country where the property is situated .4 The reason for the rule is
obvious: real property forms part of the territorial jurisdiction of the
country where it is located, and therefore, it is logical that it shall

be subject to the law of the States where it is found. Contrary rules

in foreign states cannot certainly be given effect unless the situs so
allows.
The theory of lex situs applies when the intrinsic validity and
alienations, transfers, mortgages, capacity of the parties,
interpretation of documents, effects of ownership, co-ownership,
accession, usufruct, lease, easement, police power, eminent
domain, taxation, quieting of title, registration and prescription of
rights concerning real property is in question. 5
Swank vs Hufnagle illustrates a conflicts case applying lex
situs, where even if legal capacity is present according to law where
the contract was executed, the law where the property is situated
shall still govern. Therefore, mortgages over real property, when
considered void in the place where the real property is situated, is
void, regardless of law of the place where it was executed. Similarly,
if a foreigner executed a deed of sale abroad in favor of a Filipino
concerning a parcel of land found in the Philippines, lex situs or
Philippine law shall govern both the extrinsic and intrinsic validity
of the transaction.

Exceptions to the Rule in the Case of Real Property

The general rule of lex situs concerning real property admits
four notable exceptions: (a) successional rights; (b) capacity to
succeed; (c) contract which do not delve into title of property; and
(d) contracts where real property is given as security.
The first exemption means that successional rights to real
property should be govern by the national law of the deceased. The
applicable provision of law is Article 16(2) of the New Civil Code
which provides:
However, intestate and testamentary succession, both
with respect to the order of succession and to the amount of
successional rights and intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the
nature of the property and regardless of the country wherein
said property may be found.

Likewise, the second exemption can be correlated with Article

1039 of the New Civil Code which provides that capacity to succeed
is governed by the national law of the deceased. Thus, if a citizen of
a country whose law provides that a child is not a compulsory heir
and he died in a country whose law is different from his, then by
applying the said provision of law any child of the decedent cannot
inherit by intestate succession.
On the other hand, the rule concerning contracts involving
real property which do not deal with the title of real property is not
necessarily governed by the lex situs. Instead the rule of lex loci
voluntatis or the lex loci intentionis should be regarded as
controlling. This rule is exemplified when a Filipino landowner hires
a Japanese landscape architect to convert a parcel of land located
in the Philippines into a tropical garden, by applying the said rule
the proper law that shall govern is not lex situs but the contract
between parties.
As for the last exception, the principal contracts where real
property is given by way of security is governed by the proper law of
the contract while the accessory contract, is governed by the law of
the state where the real property is situated. Thus, when a Filipino
citizen obtain a loan from a Turkish national and by way of security
the former mortgage his land located in the Philippines to the latter,
the law which governs the contract of loan is determined by the
proper law of the contract but the mortgage contract is governed by
the Philippine law.

Chapter 2: Tangible Personal Property

The Civil Code of the Philippines fails to provide for a definition
of what is a personal property so in lieu of a concrete definition,
Article 416 and Article 417 of the New Civil Code enumerates what
constitutes movable property, respectively. Moreover, a movable or
personal property can be further classified as tangible or intangible
properties. Article 416 enumerates tangible personal properties
which are also referred to as choses in possession, while Article 417
enumerates intangible personal properties which are also known as
choses in action.
Choses in Possession
6

A chose in possession is a movable thing of which one has

possession.1 It is not confined merely to stagnant objects but also
those who have a naturally changing situs, such as goods in
transitu and vessels or other means of transportation. 2 As
mentioned, Article 416 of the Civil Code provides for the following
enumeration of choses in possession.
Article 416. The following things are deemed to be personal
property:
(1) Those movables susceptible of appropriation which
not included in the preceding article;

are

(2) Real property which by any special provision of law is

considered as personalty;
(3) Forces of nature which are brought under control by
science; (4) In general, all things which can be transported from
place
to place without impairment of the real property to which
they are fixed.
Old Rule: Mobilia Senquntuur Personam
The old rule regarding the determination of jurisdiction of
personal properties is embodied in the maxim mobilia senquntuur
personam which means that the movables follow the person of the
owner. The rule grew up in Middle Ages when movable property
could easily be carried from place to place. 3 The application of
mobilia senquntuur personam is justified primarily because a
personal property has no fixed situs thus an artificial one must be
established. Moreover, this artificial situs should be the personal
law of the owner. Another justification of the rule is simplicity for it
would apply wherever the location of the personalty. Lastly, mobilia
senquntuur personam is more stable, since the rule would remain
despite the change of location of the immovable. 4
The application of the rule led to some problem and as a result
most countries adopted lex situs in resolving issues concerning
personal properties, primarily because situs of the personal
1 Ibid
2 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 330.
3 Pullman's Palace Car Co v Comm. of Pennsylvania 141 US 1882 as quoted in
Paras p.327
4 Story Commentaries on Conflict of Laws p.376 as quoted in Paras, p.327

property can be determined easily. Thus, the rule of mobilia

sequntuur personam was then finally abandoned.
Lex Situs Governs Personal Property
As in real property, Article 16 of the New Civil Code applies to
personal property, the general rule that the law of the state where
the property is located at the time of the transaction in question
determines the creation and the transfer of interests in choses in
possession.5 This means that when chattel is delivered as a part of
the transaction, the situs is clearly the focal point of the
transaction. The situs of the personal property is easily
ascertainable, making it convenient and fair for both the immediate
parties and third persons who may be affected by the rights in rem
in the property.6 Corollary to the adoption of the rule of lex situs in
movable properties, the general rule and exceptions applicable to
real property is also true to the former.
Moreover, the Second Restatement, with respect to voluntary
transfers of interest in chattels and acquisitions of title by operation
of law, holds that in the absence of an effective choice of law by the
parties, greater weight will be usually given to the lex situs of the
chattel at the time of the conveyance.7 The reason for this, as stated
by Salonga, is that the State where a chattel is situated has the
dominant interest in determining the circumstances under which
an interest in the chattel may be acquired by operation of law. 8
Exceptions: When Lex Situs is Not Applied
Other than the four known exception of lex situs the said rule
also does not apply to choses in possession concerning transactions
of future delivery where location of the chattel bears little effect
until delivery. In which case, the conflicts rule to be followed is the
law most significantly related to the issue, a rule generally
applicable in conflicts situations relating to contracts. 9
5 Ibid, 491
6 M. Wolff. Private International Law (Oxford University Press, 1950); Goodrich
Conflict of Laws p.470 as quoted in Paras, p.328
7 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995), 493
8 Ibid
9 Ibid

Special Rules for Some Choses in Possession

However, the problem with lex situs, according to Salonga and
Sempio-Diy, is that it fails to consider two forms of movable
property: property whose situs naturally changes, such as vessels
or goods in transitu, and intangible personal property. To enforce
lex situs over vessels and goods in transitu, one has to consider a
multiplicity of possibilities which could be complicate the
application of the said rule. This is now where the special rules
choses in possession apply.
Special Rule: Means of Transportation
Property with naturally changing situs, particularly vessels,
are constantly presented with foreign elements. In view of its
inherent movability, the generally accepted rule for the situs of
vessels is the law of the flag or the law of the place of registry. 10
Therefore, the law of the flag governs alienation, mortgage, and
other contracts affecting vessels, even when sold or mortgaged in
the high seas. Thus, if a ship registered under Philippine Law
bearing its flag is sold while in transit the law applicable is
Philippine laws regardless if it is in international waters or high
seas.
However, a different rule is applicable when the ship or vessel
is docked in a foreign port. In this case a question arise what law
shall be applicable between the law of the flag and the law of the
foreign port but, it has been held that the law of the foreign port is
controlling.
Special Rule: Thing in Transitu.
With regard to the goods in transitu, different transactions are
governed by different conflict rules.
According to Article 1753 of the New Civil Code, loss,
destruction or deterioration of foreign bound goods in transitu are
governed by the law of the country of destination. If there is a
change in course, the law of the new destination shall govern. Thus,
when a truck load of rice is to be exported to Africa and during its
voyage the said good was destroyed, the African law shall determine
10 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 330

the liabilities of the common carrier and the rights of the shipper
concerning the damage goods. However, goods that were never
shipped, are governed by the lex situs rule.
Due to the attachment of a temporary situs, validity and
seizure of goods in transitu are governed by the law of the place
where they were seized.11 An example is when an American
creditors seized the goods owned by a Filipino merchant while in
transit, the law of the place where the said goods are actually seized
governs whether the seizure was lawful, or whether a lien or other
similar right was acquired.
As to disposition or alienation of goods, the owner may choose
between several legal systems.12 Generally, the law of the place
voluntarily agreed upon, otherwise known as lex loci voluntatis, or
the law of the place intended by the parties, otherwise known as lex
loci intentionis, may govern, since, being a contractual obligation 13,
the general conflict rules of contracts applies. However, sale or
mortgage of goods in transit may be governed by the law governing
temporary resting places. Ownership may also pass by mere
consent, pursuant to lex loci actus, despite the law of the place
having more stringent requirements. Law of the country of
destination may also be stipulated, provided that the goods actually
arrive there.14
However, where the seller or mortgagor of goods in transit is
neither an owner or a person authorized to enter into the
transaction, the validity of the disposition shall be governed by lex
situs, or the law of the place where the goods are actually situated
at the time of alienation.15
Chapter 3: Intangible Personal Property
An intangible personal property is also known as chose in
action. It refers to the right to personal things of which the owner
11 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 331
12 Ibid, 495
13 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 331
14 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995), 494
15 Ibid, 494

10

has no possession, but merely a right of action for their

possession16. This means any or all of the following:17(a) right of
proceeding in a court of law to procure payment of sum of money, or
right to recover a personal chattel or a sum of money, or right to
recover a personal chattel or sum of money by action; (b) personal
right not reduced into possession, but recoverable by a suit of law;
(c) a right to personal things of which the owner has not the
possession, but merely a right of action for their possession; (d) the
phrase "chose in action" includes all personal chattels which are not
in possession, and all property in action which depends entirely on
contracts express or implied; (e) right to receive or recover debt,
demand, or damages on cause of action ex-contractu or for a tort or
omission of a duty.18 The Civil Code of the Philippines also provides
for an enumeration of intangible personal properties:
Article 417. The following are also considered as personal
property:
(1) Obligations and actions which have for their object
movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial
entities, although they may have real estate
The concept of Intangible property is not widely understood for
it has no physical manifestation and is not subject to a persons
senses. The application of Lex Situs rule with regards to Intangible
property seems to be troublesome since in general intangibles have
no actual location. The determination of situs of the intangible
property is essential in resolving conflict issues, thus they have
been given an artificial location. However, the question as to which
situs attaches is a problem in itself, which has been subject to often
conflicting theories.
Debts

16 Blacks Law Dictionary 2nd Ed.

17 Edgardo L. Paras, Civil Code of the Philippines Annotated Vol. II Arts. 414773 Property: 17th Edition (Manila, Philippines: Rex Printing Company Inc.,
2013), 329.
18 Black's Law Dictionary

11

Debts and other obligations or interests arising from contracts

are generally considered intangible properties by operation of law.
Recovery or involuntary attachment of such debts is generally
governed by the law of the place where summons may be effectively
served, which is usually the domicile of the debtor. An example of
applying this rule is when a Turkish national, who is domiciled in
India, owes a Filipino in Manila an amount of money, the action
against the debtor must be instituted in India because it is where
the debtor is found and where the debt is payable and recoverable.
Furthermore, garnishment of property to satisfy judgment
debts must be filed in the court where the service of summons may
be validly effected. These rules are somehow in line with Section 2,
Rule 4 of the Philippine Rules of Court regarding actions in
personam:
Section 2. Venue of personal actions. All other actions
may be
commenced and tried where the plaintiff or any of
the principal plaintiffs resides, or where the defendant or any of
the principal defendants resides,
or in the case of a nonresident defendant where he may be found, at the election of
the plaintiff.
Therefore in action personam (for the collection of debt), the action
shall be filed in the Debtors place or in case of garnishment, the
garnishees place.
In general the validity and effectiveness of a voluntary
assignment of a debt depends on the lex loci voluntatis or the lex loci
intentionis; or, the proper law of the contract controls. 19 To illustrate
the rule, a Filipino residing in Cagayan De Oro City entered into a
credit transaction in Manila City with a Korean domiciled in Japan.
Their contract that the payment is to be made in Japan and the
Filipino voluntarily assigns his credit in favor of a Japanese, also
domiciled in Japan, the applicable law to determine the validity and
the effectiveness of the assignment must be the Chinese Law, for it
is apparent from their contract that it is this law that the parties
intended to be applicable (lex loci intentionis).
Justice Paras, in his book on Conflict of laws further explained
that voluntary assignment of debts is subject to a number of
theories:

19 Paras, Conflict of Laws., p.332

12

One theory is that the controlling law is the national law

of the debtor and the creditor if the forum adheres to the
nationality principle; and the domiciliary law of the debtor and
creditor if the forum is guided by the domiciliary principle.
This theory was criticized as complicated and not viable
for application as when the personal law of each party differs
from one another. It would seem difficult to determine which
between the two laws should govern the case. On the other
hand, in case of domiciliary principle, the application would
also be impractical where the parties are domiciled in different
State.
Another theory insists on the lex loci celebrationis of the
assignment, that is, the law of the place where the voluntary
assignment of the credit was made. (Goodrich, Conflict of laws,
pp426-427; American Restatement).
Finally there is the theory that is the lex loci volutantis
( the law of the place of performance or law of the place where
payment may be asked of the debtor) that is controlling.
(Westlake, A Treatise on Private International Law).
The last two theories were also criticized as defective on
the ground that in case of lex loci celebrationis, the assignment
may only be purely accidental to the transaction and could not
be considered as a factor in the determination of the situs.
Regarding lex loci voluntatis, the inherent defect of this theory
is the fact that there are many places where performance may
be sought, namely, any state where the debtor may be served
with summons.
For the purposes of taxation, in determining the situs of
intangibles in general, the old rule of mobilia sequntuur personam
is still applicable. Intangibles are taxed at the domicile of the owner
or creditor, since the legal title to the debt is present at his domicile
and is therefore taxable if the State so declares. Furthermore, in
administering of debts, the situs is the place where the assets of the
debtor are actually situated. An assignee in insolvency, for example,
is required to take hold of the assets of the debtor for eventual

13

distribution among creditors; it is obvious that the lex situs of the

properties will be the determining law.
Negotiable Instruments
A negotiable instrument is a document guaranteeing the
payment of a specific amount of money, either on demand, or at a
set time, with the payer named on the document. 20 Different aspects
of negotiable instruments are governed by different conflict rules.
Negotiability or the non-negotiability of such instruments are
determined by the law which gives rise to the right embodied in the
instrument,21 i.e. the negotiability of Philippine checks are governed
by Philippine laws, and Swedish bills of exchange governed by
Swedish laws. The United States, however, adopts a different view,
where the law where the instrument was executed governs. 22 The
US Supreme Court in Spears v. Wilson Sewing Machine Co.
explained that the obligation that gave rise to a negotiable
instrument is embodied in the instrument itself, hence transfer of
the instrument also transfers the right to demand fulfillment of the
obligation. Being analogous to transfer of chattels, the conflicts rule
concerning transfer, delivery, or negotiation of the instrument must
be governed by the law of the place of the instrument at the time of
negotiation. 23
Corporate Shares of Stock
Corporate stock is defined as an instrument that signifies an
ownership position, or equity, in a corporation, and represents a
claim on its proportionate share in the corporation's assets and
profits.24
Conflict rules governing corporate shares of stock wholly
depend on the type of transaction concerned. Transactions affecting
corporations themselves, such as sale of corporate shares and
taxation of dividends, are governed by the law where the
corporation was created. Contracts between parties, such as sale of
corporate shares, is governed by lex loci voluntatis or lex loci
intentionis, generally the place where the certificate is delivered. 25
20 Blacks Law Dictionary
21M. Wolff. Private International Law (Oxford University Press, 1950)
22 Section 348, American Restatement
23 50 Mich 534
24 Blacks Law Dictionary
25 Cheshire, Private International Law

14

As for the issue concerning taxation of corporate share the

case of Wells Fargo vs. Collector of Internal Revenue, GR 46720, 28
June 1940, is instructional on the matter. In the said case, Birdie
Lillian Eye, a resident and domicile of Los Angeles, California, left a
will which is duly admitted to probate in California. In the said will,
Wells Fargo bank and Union Trust Co. was duly appointed as
trustee of her shares of stock in the Benguet Consolidated Mining
Co., a partnership organized under the law of Philippines. The
Federal and California States imposed an inheritance taxes upon
the estate of Ms. Eye and it was then duly paid. Nevertheless, the
Collector of Internal Revenue of the Philippines sought to subject
the shares of stock to inheritance tax, to which Wells Fargo
objected. The Supreme court ruled that the actual situs of the
shares of stock is in the Philippines, the corporation being
domiciled therein. The certificates of stock remained in the
Philippines up to the time when the deceased died in California.
Even if the owner is residing in California but her activities with
respect to her intangibles availed the protection and benefit of
Philippine laws. Accordingly, the jurisdiction of the Philippine
Government to tax must be upheld. Based on the said case, it is
therefore necessary to determine whether the taxing state has
sufficient contact with the personal property before it can justify an
imposition of tax.
Franchise and Goodwill
A franchise is special privilege conferred by government upon an
individual or corporation, which does not belong to the citizens of
the country general,y as a common right. 26 A well-settled rule in
conflict of laws, franchises are subject to the law of the place that
granted them. As an illustration, Jollibee being one of the largest
fast food chains in the Philippines is operating nationwide with
more than 750 stores. The company has also embarked on an
aggressive international expansion plan in the USA, Vietnam, Hong
Kong, Saudi Arabia, Qatar and Brunei. Branches of Jollibee in the
Philippines, with regards to their rights and duties based on the
issued franchise, are governed by the law of the Philippines.
However, conflict cases may arise with regards to other branches
located outside the Philippines. Pursuant to the general rule
concerning franchise, they are still subject to the applicable laws of
the Philippines. A grantee shall, at all times during the term of a
26 Black's Law Dictionary, 8th ed., 2004.

15

franchise, be subject to all lawful exercise of the police power by the

country and to such lawful regulations as the country shall
hereafter enact.
Goodwill, on the other hand, is defined as the advantage acquired
by any product or firm because of general encouragement and
patronage of the public. Its elements are: place, name, and
reputation. Article 521 of the New Civil Code provides that goodwill
of a business is property and may be transferred together with the
right to use the name under which the business is conducted.
Although goodwill is contemplated as a property and provided in
Article 521 of the New Civil Code; it is not an independent property
which is separable from the firm or business which owns it.
Therefore, the goodwill of a business shall be governed by and
construed in accordance with the laws of the place where the
business is carried on. This includes any dispute arising out of or
relating to goodwill of a business and taxation and the transactions
contemplated. 27

Intellectual Properties
Intellectual
copyrights.

Properties

consist

of

patents,

trademarks

and,

Patent refers to any technical solution to any problem in any

field of human activity. Its requisites are: A) Novelty, meaning that
the invention must be new. B) Inventive step,, meaning that the
invention must not be obivious to a person skilled in the art. And C)
Utility, meaning it must have an industrial applicability or a
practical use in any industry.
Conflicts of law issue in patents usually arises in the
application of the first to file rule and the right of priority rule. 28
The first to file rule dictates that a between two or more inventors,
the one who filed an application owns the patent thereto, and if
there be more than one application, the applicant with the earliest
filing date or priority date owns the patent. While, the right of
priority rule states that a patent application filed by one who has
previously applied for the same invention in another country that
affords similar privileges to Filipinos shall be considered filed as of
27 Edgardo L. Paras, Philippine Conflict of Laws,. 6th ed., (Manila, Philippines:
Rex Printing Company, Inc., 1984)
28 Crescencio P. Co Untian, Commercial Law Reviewer, 2012.

16

the date of filing application.29 Thus, when X filed his patent

application before the IPO on March 15 2010 on his invention
completed on October 15 2009. While, Y filed his patent application
before the IPO on April 20, 2010 on his invention that was also
applied for patent in France on July 1, 2009. Applying the rule
above, between X and Y, Y application shall be preferred because it
was applied in France, a country which affords similar privileges to
Filipinos and is thus considered filed as of July 1, 2009 while X
application is considered filed only on March 15, 2010.
A Trademark is a symbol, sign, slogan or name used to mark a
product in order to distinguish it from other products. If used to
distinguish a service rendered from other sevices, it is a service
mark. And if used to distinguish an enterprise from other
enterprise, it is a tradename. 30 Similar with patents, trademarks
need to be registered to enjoy protection.
Problem arises when a domestic corporation has the same or
similar trademarks with a foreign corporation. In such cases, the
following rules are observed:
1)

In case of similar or identical goods, a trademark which

is identical with, or confusingly similar to or
constitutes a translation of, an internationally and
locally well known mark, whether or not registered in
the Philippines are generally refused registration.
Subject to the defense that in determining whether a
mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather
than of the public at large.

Ex. There is no confusing similarity between fruit of the loom and

fruit of the eve both dealing with womens panties. 31
2)

In case of non-competing goods and services, two

requisites are required to constitute infringement, and
these are: 1) its use would indicate a connection
between the two marks and 2) the interest of the owner
of the registered mark are likely to be damaged by such
use.

29 Ibid.
30 Ibid.
31 Fruit of the loom, Inc vs IAC G.R. No. L-32747, November 29, 1984.

17

Ex. There is no confusing similarities between Brut

for toilet articles and Brute for briefs, the two
products are so dissimilar that a purchaser of one
would not be mistaken into buying the other. 32
It should be noted that under the Paris Convention, a foreign
national, even if not licensed to do or not actually doing business in
the Philippines may file an action for infringement, provided: a) Its
mark is registered in the Philippines, or in the case of a trade name,
it has continuously been used in commerce in the Philippines and
b) Its country extends reciprocal rights to nationals of the
Philippines or is a member of the Paris Convention. 33
Copyright is the protection afforded by law to the author of an
original intellectual creation. They are protected from the moment of
creation. Section 177 of the IPC enumerates the exclusive rights or
economic rights of the owner over his copyrighted works as follows:
1) The right to reproduce, 2) the right to prepare derivative works, 3)
the right to distribute, 4) the right to display, 5) the right to
perform. WIPO treaty and TRIPS treaty further added 6) the right to
transmit and 7) the right of rental. As a general rule, copyrights like
patent, trademarks, and trade names are, in the absence of a treaty
are protected only by the state that granted or recognized them. 34
In sum, intellectual property being a personal property without a
definite situs must consequently follow the place of its registration
or protection.

Part II: Succession

Introduction
In the Philippines, succession is defined as a mode of
acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are
transmitted through his death to another or others either by his will
or by operation of law. This may be effected either by will or testate,
or by operation of law or intestate. When confronted with a conflict
32 Faberge Inc. vs. IAC G.R. No. 71189, November 4, 1992.
33 Crescencio P. Co Untian, Commercial Law Reviewer, 2012.
34 Martin Wolff, Private International Law, 1950.

18

rule, it is imperative to first resolve what law should be applied in

transmission of successional rights upon the death of the person.
There are two recognized theories in determining the proper
law for the transmission of successional rights: the unitary or
single system and the split or scission system.
Under the first theory, unitary or single system, there is only
one law that determines transmission whether real or personal
properties. An example of which is when the national law of the
deceased, otherwise known as national theory, or the domicile of
the deceased, otherwise known as domiciliary theory, is followed in
the transmission of both real and personal properties. On the
second theory, the split or scission system, the transmission of real
property is governed by the lex situs or the law of the place where
the property is located while transmission of personal property is
governed by the domicile of the deceased at the time of his death.
In our jurisdiction we follow the first theory or the unitary or
single system in transmission of properties regardless of the
character of the property and where the property be found.
Chapter 1: Validity of the Will
According to Article 783 of the New Civil Code, a will is an act
whereby a person is permitted, with formalities prescribed by law, to
control a certain degree of the disposition of his estate, to take
effect after his death. Being a personal, solemn, revocable, and free
act of disposition, wills are considered to embody his last wishes of
the testator. Taking effect only after death, a testator may revoke
and change it at any time, if he so desires, before his death.
In our jurisdiction, there are two kinds of wills: the notarial
will and holographic will. Notarial wills are those made with the aid
of a notary public and attesting witnesses, and holographic wills are
those entirely handwritten, dated and signed by the testator. In
both cases, a will must be probated to check its validity.
When we talk of validity, we refer to both its extrinsic and
intrinsic validity of wills. Extrinsic validity deals with forms and
solemnities in the making of the will. Intrinsic validity concerns
itself with the substance of the will.
Extrinsic validity of wills

19

With respect to time, extrinsic validity of a will, as a general

rule, depends on law in force at the time it was made. Imposition of
more stringent rules cannot invalidate wills previously declared
valid. Likewise, subsequent leniency of formal rules does not
validate a will void when it was created.
As to location, the conflicts situations concerning extrinsic
validity of wills is, in summary, governed by lex nationalii, lex loci
celebrationis, lex domicilii, or the law of the forum. Such conflict
situations include wills made by Filipinos abroad, by aliens abroad,
and by aliens in the Philippines.
If a Filipino makes a will abroad, extrinsic validity may be
governed by either lex nationalii or lex loci celebrationis; he may
comply with the formalities of either Philippine law or the law of the
country where the will was executed. To illustrate, Filipinos
temporarily residing in Japan may execute a will in accordance with
the laws of either Philippines or Japan. Therefore, if the will was
executed in accordance with the form required by the laws of
Japan, his will may be probated in the Philippines.
If an alien makes a will abroad, extrinsic validity may be
governed by lex nationalii, lex loci celebrationis, or lex domicilii, the
law of the place where he is domiciled. To illustrate, on his way to
the Philippines, a Korean national domiciled in America executed a
will in Japan. Such will may be probated in the Philippines if it is
made in accordance to the law of Korea, applying lex nationalii,
America, applying lex domicilii, Philippines applying the law of the
forum, or Japan, applying lex celebrationis.
Whether executed in or out of the Philippines, holographic
wills are subject to no other form other than being entirely written,
dated, and signed by the hand of the testator himself. In case of
doubt, the substantial compliance rule applies. Hence, any
holographic will made by any person, citizen or not, may be
probated in the Philippines if it is written, dated, and signed by the
testator himself or so long as its authenticity is established.
Joint Wills; Philippine conflict rules
The only exception to the rule that a Filipino can execute a will
abroad, as expressly provided in Article 819 of the New Civil Code,
is the prohibition of making a joint will. A joint will is defined as a
single testamentary instrument which contains the wills of two or

20

more persons, jointly executed by them, either for their reciprocal

benefit or for the benefit of a third person. 35 Filipinos cannot
execute joint wills, even if it is valid in the country where it was
executed. The rationale behind is to avoid the possibility of
committing parricide. However, the rule may vary if it is made by
foreigner abroad and made here in the Philippines.
Joint wills made by aliens abroad shall be considered as valid
in the Philippines if valid according to lex nationalii, lex domicilii, or
lex loci celebrationis. A joint will executed by an alien and a Filipino
citizen abroad will be valid as to the alien applying lex nationalii, lex
domicilii, or lex celebrationis but void as to the Filipino, the same
being against our public policy on joint wills.
Joint wills made by aliens in the Philippines are void even if
valid under their lex nationalii or lex domicilii because our public
policy on joint wills may not be militated against.
Rules on the Intrinsic Validity
Similar to the rule on extrinsic validity, from the viewpoint of
time, intrinsic validity is governed by the law in force at the time of
death. This is because at death, successional rights have become
vested rights, and no subsequent law may alter such vested rights.
With regard to location, different countries follow one of the
two rules of intrinsic validity: lex nationalii or lex domicilii. Lex
nationalii states that successional rights are governed by the
national law of the decedent whereas in lex domicilii, the law where
the decedent was domiciled. The Philippines follows lex nationalii,
as expressly provided in Article 16 of the New Civil Code, and
applied by the Supreme Court in Miciano vs. Brimo, Bellis vs.
Bellis, and Cayetano vs. Leonidas.
However, in Aznar vs Garcia, the law of the Philippines was
applied despite the decedent being a foreign national. In the case,
the decedent was a citizen of California yet domiciled in the
Philippines. Upon his death, lex nationalii of the decedent was
applied to determine the successional rights of his heirs. Upon
investigation however, the decedents national law, or the laws of the
state of California adheres to lex domicilii, directing the application

35 Desiderio P. Jurado. Comments and Jurisprudence on Succession. (Manila,

Philippines: Rex Printing Company, 2009), 106.

21

of Philippine laws. This peculiar situation led to the application of

Philippine laws, despite the decedent being a foreign national.

Chapter 2: Revocation of Wills

Revocation, in succession, refers to the act of withdrawal or
declaring void a will previously made36. Wills may be revoked by the
testator at any time before his death, and any waiver or restriction
of this right is void37. Despite having numerous choices as to which
law governs the validity of the creation and enforcement of wills,
revocation is generally governed by lex domicilii, or the law of the
place where the testator is domiciled. As such, if the testator is
domiciled in the Philippines, revocation must be done in accordance
with Philippine laws, regardless of his nationality and the place of
revocation.
If the act of revocation takes place in the Philippines, it must
be done in accordance with Philippine laws, regardless whether the
testator is domiciled in this country or not.
If the revocation takes place abroad by a testator who is not
domiciled in the Philippines, it must be done either in accordance
with the laws of the place where the testator had his domicile at the
time of revocation or the law of the place where the will was made. 38
However, according to Salonga, the rules on revocation leaves a
number of loose ends and doubts.
The provision seems to imply that the place of revocation is of
no importance. If construed strictly, the Philippines may not
recognize revocation done abroad by a non-domiciliary of the
Philippines in accordance with the laws of the place of revocation,
as opposed to revocation in accordance with the law of his domicile
or the execution of the will. This conclusion runs counter to the
principle of lex loci celebrationis, whose primacy is espoused in
Article 17(1) of the New Civil Code. Furthermore, such
interpretation impairs the will of the testator.
36 Black Law Dictionary
37 Art. 828, New Civil Code of the Philippines
38 Mison, Wills and Succession Better Explained, 2010

22

The shift from lex nationalii to lex domicilii as a test factor or point
of contact is questionable. It seems antithetical to completely
abandon lex nationalii, the law governing the creation of wills, in
determining the principal point of contact in revocation. Where
several points of contact are recognized in the creation of wills by
aliens abroad, limiting the point of contact for revocation to lex loci
celebrationis and lex domicilii seems illogical.
Likewise, there is apparently no provision with reference to
aliens domiciled in the Philippines who executed the act of
revocation abroad. On the other hand, a will made by an alien
abroad, wherever his domicile may be, will be considered formally
valid in the Philippines if formally valid accordance to his national
law, or to the law of his domiciled, or to the law of the place where it
is made, it is also formally valid if made according to the
requirements of Philippine Law39.
Summarily, the conflict rules in determining validity of the act of
revocation of the will may be subject to further legislative
enhancement to avoid existence of doubt.
Chapter 3: Probate of the Will
Probate is the act or proceeding of establishing a last will and
testament before a competent court as valid, done by competent
testator, and executed in the form provided for by law, for the
purpose of certifying the document as valid and binding. The proper
probate of a will, pursuant to the Rules of Court, is necessary to
pass on real and personal property of the deceased. Public policy
dictates that neither estoppel nor prescription may hinder the
probate of a validly executed will.
Wills validly executed abroad may be probated in the
Philippines, provided that they have not yet been admitted to
probate in a foreign court. In which case, the procedure shall be
governed by the rules in the Philippines, hence due execution and
testamentary capacity must be proved.
Wills duly and validly probated in a foreign country may be
allowed, filed, and recorded by the proper RTC in the Philippines,
under Rule 77 of the Rules of Court. Similar to the procedure of
enforcing of a foreign judgment, a copy of the will and order of
39 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995)

23

decree of allowance thereof, both duly authenticated, shall be filed

with a petition for allowance in the Philippines.
Probate proceedings are proceedings in rem, and therefore
notice or publication to all interest persons is necessary. According
to In re Testate of Jose Suntay, a will probated by a foreign court
cannot be accepted in the Philippines, where there was neither
proof of notice or publication to interest parties, proof that the court
was a probate court, nor proof that the proceeding was a probate
proceeding.40
Chapter 4: Administration of the Deceased person
Administration is the process of determining and realizing the
assets of a deceased person, the payment of the debts of the estate,
and the actual distribution of the residue to the heirs. Being
procedural in nature, administration is governed by lex fori or the
law of the country where the action is brought.
Administration of Estates
In the Philippines as well as other civil law countries,
executors and administrators are appointed either by the testator
through the will or by the court. The rights, powers and obligations
of the executor or administrator are coextensive with the territorial
jurisdiction of the court that qualified or appointed him. Hence, it is
important to determine what court has the power to appoint him.
Under our jurisdiction, if the decedent was an inhabitant of the
Philippines at the time of this death, regardless whether he is an
alien or a citizen, the Regional Trial Court of the province in which
he was residing at the time of his death shall have the probate
jurisdiction; or , if the decedent was an inhabitant of a foreign
country at the time of his death, it is the Regional Trial Court where
he may have his property and the first to take cognizance thereof
excludes all others41. Therefore, an executor or administrator
qualified or appointed by a Philippine court has jurisdiction only
over the properties of the deceased located in the Philippines.
Since administration extends only to property within the
territorial jurisdiction of the State granting such authority, an
40 In re Testate of Jose B. Suntay, 95 Phil 500 (1954)
41 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995)

24

administrator appointed in one State or country has no power over

property in another country. To administer property situated in a
foreign State, the administrator must be reappointed by that State 42.
Property left by a decedent in both his country of domicile and
in foreign countries must be distributed in separate administration
proceedings, giving rise to two kinds of administration: (a) principal
domiciliary administration, or administration of property within his
country of domicile; and (b) ancillary administration, or
administration of property located abroad.
In view of these independent administrative proceedings, it is
conceivable, therefore, that administration may be done
simultaneously by different administrators in their respective
jurisdictions, which may give rise to complications in the scope of
each administrator. Although such predicament may be avoided by
the designation of the estate as a single unit for the purposes of
administration, such designation cannot be done without
disregarding the sovereignty of the different states 43. Be that as it
may, pertinent provisions of the New Civil Code subscribe to this
principle, when wills are proved and allowed in a foreign country
are presented in the Philippines for execution, the court shall grant
letters of testamentary or letters of administration with a will
annexed and shall extend to all the estate of the testator in the
Philippines.
Rules on the distribution of residue
Administration proceedings, after payment of all liabilities,
determine whether an excess of assets called residue exists. For the
distribution of the residue, should there be any, the general rule is
that the ancillary administrator shall remit the balance to the
domiciliary administrator for distributions.
If the testator is insolvent, then his estate in the Philippines
shall, as far as practicable, be disposed of in such a way that
creditors here and elsewhere may receive an equal share in
proportion to their respective debts44.When the administration of
the decedents estate, both ancillary and domiciliary, is completed,
the distribution of the remaining assets follows.
42 In re Testate Estate if Butler, Gr.no. L-3677
43 Jovito Salonga, Private International Law (Manila, Philippines: Rex Printing
Company, Inc., 1995)
44 Ibid

25

To reiterate, distribution of residue, if any, is separate from

administration, and is therefore regulated not according to the law
governing administration but according to the law on succession,
pursuant to Article 16(2) of the New Civil Code. An administrator in
his final accounting shall be held responsible for all assets that
have come to him anywhere, by reason of his local appointment,
and if the same person has served as administrator in more than
one State he must account separately for the properties received
under such appointment45.

Conclusion
Between real and personal property, conflicts of law rules are
ratiocinated on their inherent characteristics of immovability and
movability, respectively. Personal property in particular are
governed generally by conflicts rules on contracts, which give rise to
rights and obligations over them, excluding property with a
naturally changing situs and intangible property, which has no
physical existence. In formulating these conflict rules, it is evident
that each state or country respects the inherent sovereignty of the
other, and recognizes the complications arising from attempting to
apply laws and rules of other sovereign states in other countries.
45 Ibid

26

Lex situs and other applicable rules are the best way to avoid
misconstruction and misapplication of laws of which the court may
or may not possess expertise thereof.
Rights involving succession are subdivided into the different
stages of succession: execution of wills, revocation, probate, and
administration proceedings. Conflict of law rules cater to the
peculiar requisites of each stage, whether lex nationalii, lex
domicilii, lex loci celebrationis, or the law of the forum should be
applied. It is evident, however, that some established rules in
conflicts cases involving succession may be subject to further
legislative enhancement to avoid absurd rulings to meticulous
circumstances, for the purpose of the law is not to obstruct but to
facilitate the determination of the truth and further establish the
rights and obligations of parties in conflict.

27

BIBLIOGRAPHY
Goodrich, H. (1949). Handbook of the Conflict of Laws. St Paul: West
Publishing Co.
Jurado, D. P. (2009). Comments and Jurisprudence on Succession.
Manila: Rex Printing Company.
Paras, E. T. (2013). Civil Code of the Philippines Annotated (17th
Edition ed., Vol. II). Manila, Philippines: Rex Publishing
Company.
Rabuya, E. T. (2008). Property. Manila, Philippines: Rex Publishing
Company.
Salonga, J. (1995). Private International Law. Manila, Philippines:
Rex Printing Company.
Westlake, J. (1858). A Treatise on Private International Law - The
Conflict of Laws. London, England: C. Rowerth and Sons.
Pullman's Palace Car Co. vs Comm of Pennsylvania, 141 US 18
(1891).
Harris v Balk, 198 US 215 (1905).
In re Testate of Jose B. Suntay, 95 Phil 500 (1954).
In re Testate Estate of Basil Butler, GR No. L-3677 (1951).

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