I.

Introduction – Property Defined

Under Article 414 of the New Civil Code, “All things which are or may be the
object of appropriation are considered either (1) Immovable or real property or (2)
Movable or personal property. Stated differently, a property is any object which may be
appropriated. An object is capable of appropriation when the thing can be object of a
juridical relation. Consequentially, things that belong to everyone (Res Communes) are
not considered property because they may not be appropriated.

Property can be real or personal property. Real property, as may be inferred from
Article 415 of the New Civil Code, are those (1) Immovable by nature; (2) Immovable by
destination; (3) Immovable by incorporation; and (4) Immovable by analogy. Personal
property are those excluded from the definition of a real property or any property if by its
nature, it can be moved from one place to another.

II. When Conflict Arises

Conflict of law arises in the area of property when a foreign element is involved in
the case. The foreign element may be in the form of a foreigner owning property in
another country or there is a foreign law on land ownership that is in conflict with
domestic law. When a foreign element is involved, there is a need to determine the
applicable law governing the problem. Otherwise, the problem has only a domestic
character where Philippine law applies.1

The Supreme Court likewise held in the case of Laurel vs. Garcia2 that a conflict
of law situation arises only when:

1
Conflict of Laws, Pe Benito, p. 247 (2016)
2
187 SCRA 797 (1990)

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

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

LEX LOCI REI SITAE DOES NOT APPLY WHEN THERE IS NO CONFLICT OF
LAWS SITUATION

Laurel vs. Garcia

G.R. No. 92013, July 25, 1990

FACTS:
The Roppongi Property is one of the four properties in Japan acquired by the Philippine
government under the Reparations Agreement, as part of the indemnification to the
Filipino people for their losses in life and property and their suffering during WWII. The
Roppongi property became the site of the Philippine Embassy until the latter was
transferred to another site when the Roppongi building needed major repairs. Due to
the failure of our government to provide necessary funds, the Roppongi property has
remained undeveloped since that time. After many years, the Aquino administration
advanced the sale of the reparation properties, which included the Roppongi lot. This
move was opposed on the ground that the Roppongi property is public in character. For
their part, the proponents of the sale raised that Japanese law should apply, following
the doctrine of lex loci rei sitae.

ISSUE: Whether or not the conflict of law rule on lex loci rei sitae should apply

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HELD:
We see no reason why a conflict of law rule should apply when no conflict of law
situation exists. A conflict of law situation arises only when: (1) There is a dispute over
the title or ownership of an immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity and effect of the
transfer, or the interpretation and effect of a conveyance, are to be determined (See
Salonga, Private International Law , 1981 ed., pp. 377-383); 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. In the instant
case, none of the above elements exists. The issues are not concerned with validity of
ownership or title. There is no question that the property belongs to the Philippines. The
issue is the authority of the respondent officials to validly dispose of property belonging
to the State. And the validity of the procedures adopted to effect its sale. This is
governed by Philippine Law. The rule of lex situs does not apply. The assertion that the
opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is
misplaced. The opinion does not tackle the alienability of the real properties procured
through reparations nor the existence in what body of the authority to sell them. In
discussing who are capable of acquiring the lots, the Secretary merely explains that it
is the foreign law which should determine who can acquire the properties so that the
constitutional limitation on acquisition of lands of the public domain to Filipino citizens
and entities wholly owned by Filipinos is inapplicable. We see no point in be laboring
whether or not this opinion is correct. Why should we discuss who can acquire the
Roppongi lot when there is no showing that it can be sold?

III. General Rule on Real and Personal Property

As a general rule, the Philippines adhere to the rule of lex rei sitae. The doctrine
of LEX REI SITAE states that the law of the place where the thing or subject matter is
situated shall govern the specific property. This means that the title to realty or question
of real estate law can be affected only by the law of the place where the property may
be found. This rule is evidenced by Article 16 of the New Civil Code which states that

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

By virtue of Article 16, the Philippines has abandoned the doctrine of Mobilia
sequuntur personam when it comes to personal property/movables. The doctrine of
Mobilia sequuntur personam states that the movables follow the law of the person.
Under this doctrine, the personal property is given artificial status in such a way that the
personal property held by a person is governed by the same law that governs that
person. This doctrine is still applied on taxation law but in all other matters Article 16
shall govern.

While it is true that real and personal properties are subject to the laws of the
place where they are situated, there are ways where a court in another jurisdiction may
actually subject the property to its power and authority. So long as the court has
jurisdiction over the parties, it can order the parties to perform any act affecting the title
to or ownership of the property thereby effectively subjecting the property to its power
and tutelage. Such was in the case in Tayag vs. Benguet Consolidated when a local
court considered as lost stock certificates being held by a domiciliary administrator who
refused to turn over the same to the ancillary administrator.

Tayag vs. Benguet Consolidated, Inc.

G.R. No. L-23145, Nov. 29, 1968

FACTS:
Idonah Slade Perkins, an American citizen who died in New York City, left among
others, two stock certificates evidencing 33,002 shares of Benguet Consolidated, a
corporation domiciled in the Philippines. As ancillary administrator of Perkins’ estate in
the Philippines, Tayag now wants to take possession of these stock certificates but
County Trust Company of New York, the domiciliary administrator, refused to part with
them. Thus, the probate court of the Philippines was forced to issue an order declaring
the stock certificates as lost and ordering Benguet Consolidated to issue new stock

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certificates representing Perkins’ shares. Benguet Consolidated appealed the order,
arguing that the stock certificates are not lost as they are in existence and currently in
the possession of County Trust Company of New York.

ISSUE: Whether or not Philippine courts have power and authority over shares of stock
held by domiciliary administrator

HELD:
Yes. Administration, whether principal or ancillary, certainly extends to the assets of a
decedent found within the state or country where it was granted. It is often necessary to
have more than one administration of an estate. When a person dies intestate owning
property located in the country of his domicile as well as in a foreign country,
administration is had in both countries. That which is granted in the jurisdiction of
decedent’s last domicile is termed the principal administration, while any other
administration is termed the ancillary administration. The reason for the latter is
because a grant of administration does not ex proprio vigore have any effect beyond the
limits of the country in which it is granted. Hence, an administration appointed in a
foreign state has no authority in the Philippines. The ancillary administration is proper,
whenever a person dies, leaving in a country other than that of his last domicile,
property to be administered in the nature of the deceased’s liable for his individual debts
or to be distributed among his heirs.

Since there is refusal, persistently adhered to by the domiciliary administration in New

York, to deliver the shares of stocks of appellant corporation owned by the decedent to
the ancillary administration in the Philippines, there was nothing unreasonable or
arbitrary in considering them lost and requiring the appellant to issue new certificates in
lieu thereof. Thereby the task incumbent under the law on the ancillary administration
could be discharged and his responsibility fulfilled.

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Probate court has authority to issue the order enforcing the ancillary administrator’s
right to the stock certificates when the actual situs of the shares of stocks is in the
Philippines. It would follow then that the authority of the probate court to require that
ancillary administrator's right to "the stock certificates covering the 33,002 shares
outstanding in her name in the books of [appellant] Benguet Consolidated, Inc...." be
respected is equally beyond question. For appellant is a Philippine corporation owing
full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune from lawful court orders. A
corporation as known to Philippine jurisprudence is a creature without any existence
until it has received the imprimatur of state according to law. It is logically inconceivable
therefore it will have rights and privileges of a higher priority than that of its creator,
more than that, it cannot legitimately refuse to yield obedience to acts of its state
organs, certainly not excluding the judiciary, whenever called upon to do so.

Our holding in Wells Fargo Bank and Union v. Collector of Internal Revenue finds
application. "In the instant case, the actual situs of the shares of stock is in the
Philippines, the corporation being domiciled [here]." To the force of the above
undeniable proposition, not even appellant is insensible. It does not dispute it. Nor could
it successfully do so even if it were so minded.

Exceptions to the Rule on Lex Rei Sitae with respect to Real Properties

There are four exceptions to the general rule. The following exceptions are as
follows; (1) Succession (2) Capacity to Succeed (3) Contracts involving real property
but do not deal with title or real rights over the property, (4) In contracts where real
property is given as security by way of mortgage to secure a principle contract.

Successional rights specifically regarding the order of succession and amount of

successional rights are governed by the national law of decedent. Thus, when it comes
to inheritance, the law of the property shall not govern but the national law of the
decedent.

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 The same is true for the person’s capacity to succeed. Under Article 1039 of the
New Civil Code, “the capacity to succeed is governed by the law of the nation of the
decedent.” Thus, in determining whether or not a person may inherit a certain property
or not, the national law of the decedent shall be applied instead of the law where the
property is found.

The third exception covers contracts wherein the issue being the contractual
rights and liabilities of parties although the subject matter of the contract is a real
property. These contracts shall be governed by the law intended by the parties.

The last exception involves the principal contract (usually loan) which is
governed by the proper law of the contract which is the intended law of the parties. It is
worthy to note that the mortgage itself is governed by lex rei sitae. There is a
possibility that the principal contract is valid but the mortgage is void; or it may be the
other way around. If the principal contract is void, the mortgage will also be void (for
lack of proper cause or consideration), although by itself, the mortgage could have been
valid.

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 Rules on Property

FACTUAL SITUATION POINT OF CONTACT

Real Property Lex Rei Sitae Art.

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

Successional Rights National Law of DECEDENT Art 16,

Paragraph 2 However, intestate
and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated
by the national law of the person whose succession is under
consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.

EXCEPTIONS

Capacity to Succeed National Law of DECEDENT Article

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

Contracts involving real property which Lex Loci Voluntatis or Lex Loci Intentionis
do not deal with the title thereto The Law intended will be the proper law of the contract.

IV. Specific Rules

A. As to Ownership of Real Property

A.1. Section 7, Article XII, 1987 Constitution

“Save in cases of hereditary succession, no private lands shall be transferred or

conveyed except to individuals, corporation, or associations qualified to acquire
or hold lands of the public domain.”

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 This constitutional provision aims to reserve land ownership to qualified
individuals only. This provision is a mechanism to implement the public policy against
foreign ownership of lands.There however an exception provided by the Constitution
itself which are in cases of hereditary succession. The hereditary succession
contemplated under this article is confined only to intestate succession. To hold
otherwise would be a circumvention on the prohibition against foreign ownership of
lands.

It must also be noted, that the prohibition only applies to transfer or conveyance
of private lands. The prohibition is not extended to lease of private lands but this is not
an absolute rule as well. The lease may be invalidated if it can be shown that the
agreement has the effect of divesting Filipinos of ownership of lands in favour of aliens.

Ramirez vs. Vda. De Ramirez

FACTS:
Jose Ramirez a Filipino, died in Spain leaving only his widow Marcelle Ramirez, a
French. In the project partition, the property was divided into 2 parts: 1st part to the
widow, and 2nd part to the grandnephews the naked ownership. Furthermore, as to the
usufruct of the 2nd part, 1/3 was given to the widow and 2/3 to Wanda de Wrobleski, an
Austrian. The grandnephews opposed on the ground that usufruct to Wanda is void
because it violates the constitutional prohibition against the acquisition of lands by
aliens.

ISSUE: Whether or not the the disposition was valid.

HELD:
The lower court upheld the usufruct thinking that the Constitution covers not only
succession by operation of law but also testamentary succession. The Supreme Court
is of the opinion that the transfer or conveyance in cases of hereditary succession does
not apply to testamentary succession for otherwise the prohibition will be for naught and

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meaningless. Any alien would circumvent the prohibition by paying money to a
Philippine landowner in exchange for a devise of a piece of land but an alien may be
bestowed USUFRUCTUARY RIGHTS over a parcel of land in the Philippines.
Therefore, the usufruct in favor of Wanda, although a real right, is upheld because it
does not vest title to the land in the usufructuary (Wanda) and it is the vesting of title to
land in favor of aliens which is proscribed by the Constitution.

Philip Matthews vs. Benjamin A. Taylor and Joselyn C. Taylor

FACTS:
On June 30, 1988, respondent Benjamin, a British subject, married Joselyn, a 17-year
old Filipina. On June 9, 1989, while their marriage was subsisting, Joselyn bought from
Diosa M. Martin a lot in Boracay. The sale was allegedly financed by Benjamin. Joselyn
and Benjamin, also using the latter’s funds, constructed improvements thereon and
eventually converted the property to a vacation and tourist resort known as the Admiral
Ben Bow Inn.

All required permits and licenses for the operation of the resort were obtained in the
name of Ginna Celestino, Joselyn’s sister. However, Benjamin and Joselyn had a falling
out, and Joselyn ran away with Kim Philippsen. On June 8, 1992, Joselyn executed a
SPA in favor of Benjamin, authorizing the latter to maintain, sell, lease, and sub-lease
and otherwise enter into contract with third parties with respect to their Boracay
property. Thereafter, on July 20, 1992, Joselyn as lessor and petitioner Philip Matthews
as lessee, entered into an Agreement of Lease involving the Boracay property for a
period of 25 years, with an annual rental of P12,000.00. Petitioner thereafter took
possession of the property and renamed the resort as Music Garden Resort. Claiming
that the Agreement was null and void since it was entered into by Joselyn without
Benjamin’s consent, Benjamin instituted an action for Declaration of Nullity of
Agreement of Lease with Damages against Joselyn and the petitioner.

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Benjamin claimed that his funds were used in the acquisition and improvement of the
Boracay property, and coupled with the fact that he was Joselyn’s husband, any
transaction involving said property required his consent.

ISSUE: Whether or not Benjamin has the right to nullify the lease agreement.

HELD:
No. Section 7, Article XII of the 1987 Constitution states that:

Section 7. Save in cases of hereditary succession, no private lands shall be transferred

or conveyed except to individuals, corporations, or associations qualified to acquire or
hold lands of the public domain.

Aliens, whether individuals or corporations, have been disqualified from acquiring lands
of the public domain. Hence, by virtue of the aforecited constitutional provision, they are
also disqualified from acquiring private lands. The primary purpose of this constitutional
provision is the conservation of the national patrimony. Our fundamental law cannot be
any clearer. The right to acquire lands of the public domain is reserved only to Filipino
citizens or corporations at least sixty percent of the capital of which is owned by
Filipinos.

The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or
private lands in the Philippines, save only in constitutionally recognized exceptions.
There is no rule more settled than this constitutional prohibition, as more and more
aliens attempt to circumvent the provision by trying to own lands through another.

Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner.
Benjamin, being an alien, is absolutely prohibited from acquiring private and public
lands in the Philippines. Considering that Joselyn appeared to be the designated
"vendee" in the Deed of Sale of said property, she acquired sole ownership thereto.

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This is true even if Benjamin’s claim is sustained, that he provided the funds for such
acquisition. By entering into such contract knowing that it was illegal, no implied trust
was created in his favor; no reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of the conjugal/community
property of the spouses.

In any event, he had and has no capacity or personality to question the subsequent
lease of the Boracay property by his wife on the theory that in so doing, he was merely
exercising the prerogative of a husband in respect of conjugal property. To sustain such
a theory would countenance indirect controversion of the constitutional prohibition. If the
property were to be declared conjugal, this would accord the alien husband a
substantial interest and right over the land, as he would then have a decisive vote as to
its transfer or disposition. This is a right that the Constitution does not permit him to
have.

A.2. Section 8, Article XII, 1987 Constitution

“SECTION 8. Notwithstanding the provisions of Section 7 of this Article, a

natural-born citizen of the Philippines who has lost his Philippine citizenship may
be a transferee of private lands, subject to limitations provided by law.”

As provided by Section 8, Article XII of the Constitution, a former natural-born

citizen of the Philippines may be allowed to be a transferee of private lands. Former
natural-born citizens may purchase or acquire private lands but subject, however, to
area exceptions.

Batas Pambansa Blg. 185 originally allowed former natural natural-born citizens
to acquire a “maximum area of one thousand (1,000) square meters in case of urban
land, or one (1) hectare in case of rural lands, to be used by him as his residence.”
However, Republic Act No. 7042 as amended by Republic Act No. 8179, also known as

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the Foreign Investments Act of 1991, was enacted and increased the area of the land
that a former natural-born citizen may acquire.3

The Implementing Rules and Regulations (IRR) of the Foreign Investments Act
of 1991 defined “Former natural─born Filipinos” as those who have lost Philippine
citizenship but were previously citizens of the Philippines falling in either of the following
categories: (a) from birth without having to perform any act to acquire or perfect their
Philippine citizenship; or (b) by having elected Philippine citizenship upon reaching the
age of majority, if born before January 17, 1973, of Filipino mothers. Further, a
“Transferee of private land” shall mean a person to whom the ownership rights of
private land is transferred through either voluntary or involuntary sale, devise or
donation. Involuntary sales shall include sales on tax delinquency, foreclosures and
executions of judgment.

Under Sec. 10 of the Foreign Investments Act of 1991, the limitations as to the
transfer of private lands to former natural-born Filipino are the following:

SEC. 10. Other Rights of Natural Born Citizen Pursuant to the Provisions of
Article XII, Section 8 of the Constitution. - Any natural born citizen who has lost
his Philippine citizenship and who has the legal capacity to enter into a contract
under Philippine laws may be a transferee of a private land up to a maximum
area of five thousand (5,000) square meters in the case of urban land or
three (3) hectares in the case of rural land to be used by him for business
or other purposes. In the case of married couples, one of them may avail of the
privilege herein granted: Provided, That if both shall avail of the same, the total
area acquired shall not exceed the maximum herein fixed. In the case the
transferee already owns urban or rural land for business or other purposes, he
shall still be entitled to be a transferee of additional urban or rural land for
business or other purposes which when added to those already owned by him

3 G. Pe Benito, Conflict of Laws 262 (2016)

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 shall not exceed the maximum areas herein authorized. A transferee under this
Act may acquire not more than two (2) lots which should be situated in different
municipalities or cities anywhere in the Philippines: Provided, That the total land
area thereof shall not exceed five thousand (5,000) square meters in the case of
urban land or three (3) hectares in the case of rural land for use by him for
business or other purposes. A transferee who has already acquired urban land
shall be disqualified from acquiring rural land and vice versa”. (As amended by
R.A. 8179)

These limitations are enforced by the Registry of Deeds by requiring the transferee to
execute a sworn statement stating, among other things, the area of the property they
are acquiring. 4 The IRR of Foreign Investments Act of 1991 further states that the
Register of Deeds shall ensure that the limits prescribed by law are observed. The land
acquired under the Foreign Investments Act of 1991 shall be primarily, directly and
actually used by the transferee in the performance or conduct of his business or
commercial activities in the broad areas of agriculture, industry and services, including
the lease of land, but excluding the buying and selling thereof. A transferee shall use his
land to engage in activities that are not included in the Negative List or in those areas
wherein investment rights have been granted to him. The Register of Deeds in the
province or city where the land is located shall register the land in the name of the
transferee only upon presentation of proof by the transferee that it will be used for any
of the purposes mentioned above, i.e., certification of business registration issued by
the DTI and affidavit that the land shall be used for business purposes.5

Note that the rules are different with respect to former natural-born citizens who
have reacquired their Philippine citizenships under Republic Act No. 9225 which
provides that beneficiaries of such Act enjoy full civil and political rights and are not

4 Id. at 263
5 Sec. 5 and 6, Rule XII, Implementing Rules and Regulations of Republic Act No. 7042

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subject to the limitations under Republic Act Mo. 8179. The latter applies only to former
natural-born citizens.6

A.3. Condominium Act of the Philippines

Republic Act no. 4726, otherwise known as the Condominium Act of the
Philippines, as amended by Republic Act no. 7899, allows foreigners to own units in the
condominium building.7

Limitation:

It must be noted that the condominium building is owned by a condominium

corporation which is subject to ownership requirements under the constitution. Hence,
the condominium corporation must still comply with the 60-40 percentage ownership
ratio in favor of Filipino citizens. Thus, foreigners can only own up to 40 percent of the
condominium building at any point in time. This rule is stated under Section 5 of
Republic Act. No. 4726 as follows:

Sec. 5. Any transfer or conveyance of a unit or an apartment, office or store

or other space therein, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a proper case, the
membership or shareholdings in the condominium
corporation: Provided, however, That where the common areas in the
condominium project are owned by the owners of separate units as co-
owners thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens, or corporations at least
sixty percent of the capital stock of which belong to Filipino citizens, except in
cases of hereditary succession. Where the common areas in a condominium
project are held by a corporation, no transfer or conveyance of a unit shall be

6 See note 4, supra.

7 Id.

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 valid if the concomitant transfer of the appurtenant membership or
stockholding in the corporation will cause the alien interest in such
corporation to exceed the limits imposed by existing laws.

B. As to Personal Property

The classes of movables are: (1) Choses in possession which include tangible
physical objects, and (2) Choses in action which include debts, patents, copyright,
goodwill, trademarks, trade names, shares of stock.

B.1. Tangible Personal Property (Choses in Possession)

General Rule: The law of the State where the property is located at the time of the
transaction in question determines the creation and transfer of the interests.8 This is
because commerce depends on the protection of the purchaser who must buy without
investigation of the applicable law, at least not beyond where the goods are located,
which is usually the place of transaction as well.

This is easily seen in cases where the movable is delivered as part of the transaction,
because the situs is the clear focal point of the transaction. However, where the delivery
is to be made at a future date after the transaction, and the location of the movable
during the transaction bears no significant relationship to the transaction until delivery is
made, it is suggested that the proper law of the transaction is that law most significantly
related to the issue presented.

8 Ruben Martinez vs. CA, G.R. No. 131673

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 Exceptions:

1. Artificial or Constructive situs is given to those which do not have a fixed situs
(usually in motion)

2. If the court has jurisdiction over the parties, it can order the parties to perform
any act affecting the title to or ownership of the property. The court is well within
its authority to do so since the parties have submitted to its jurisdiction.

Tangible Personal Property Lex Rei Sitae

(Choses in Possession)
Exception: Artificial or Constructive Situs is
Exception: same as those for real property given to those which do not have a fixed
EXCEPT that in the example concerning situs (usually in motion)
mortgage, the same must be changed to
pledge of personal property

Rules in giving constructive situs to choses in possession that are usually in

motion

VESSELS
Public Vessel Law of the Flag
Private or Commercial Vessel Law of the Country or Place of Registry
If vessel is docked at foreign port Said port is deemed as temporary situs
GOODS IN TRANSIT
As to liability for loss, destruction, or Law of destination (Art. 1734, CC)
deterioration of goods in transit
The validity and effect of seizure of goods Law of the place where the goods were
in transit seized (temporary situs)
Disposition or alienation of goods in Proper law of the contract (lex loci
transit voluntatis or lex loci intentionis)

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B.2. Intangible Personal Property (Choses in Action)

Choses in action are equivalent to “intangible movables”. They are rights

recognized and protected by the law. The rules in giving constructive situs to intangible
personal properties or choses in action are as follows:

INTANGIBLE PERSONAL PROPERTY (Choses in action)

Capacity to transfer or 1. Lex situs
acquire property 2. Exception: Voluntary transfer of
interests in chattels (other than assignment
for the benefit of creditors) – validity and
effect of conveyance between the parties
determined by the local law of the State
which has the most significant relationship
to the parties with respect to the particular
issue;
3. Goodwill – governed by the law of the
principal place of business

SHARES OF STOCKS OF CORPORATIONS

Sale of corporate shares Law of the place of incorporation since the
transfer is recorded in the books of the
corporation

Sale of corporate shares
as between parties
Taxation on the
dividends of corporate
shares
Taxation on the income
from the sale of
corporate shares
DEBTS OR CREDITS
Involuntary transfer or
assignment of a choses
in action, e.g. garnishment
Governed by the proper law of the contract (Lex
loci voluntatis or lex loci intentionis) – for this
really is a contract; usually this is the place
where the certificate is delivered
Law of the place of incorporation
Law of the place where the sale was
consummated
Law of the state where debtor may be served
summons (usually his domicile)

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Voluntary transfer or
assignment of choses in
action
Debt for taxation
purposes
Administration of debts
NEGOTIABLE INSTRUMENTS
Negotiability or non-
negotiability of an
instrument
Validity of transfer,
delivery or negotiation
FRANCHISES
Franchises – special
privilege conferred by the
government on an
individual or corporation
GOODWILL OF A BUSINESS
Goodwill – the patronage
of any established trade or
business
INTELLECTUAL PROPERTY
Patents, Copyrights,
Trademarks, Trade
Names
Personal law of the parties – the proper law of
the contract (the proper law of the original
transaction out of which the chose in action or
credit arose)
Other theories:
1. Law of the place where assignment is
executed
2. Law of the place where performance or
payment is normally expected
3. National law of the parties
Domicile of the creditor, where the collectible
credit may be taxed
Where the assets of the debtor are usually
situated
Law governing the rights embodied in the
instrument
In general, situs of the instrument at the time of
transfer, delivery or negotiation
Law of the place that granted them
Law of the place where the business is carried
on
In the absence of a treaty, they are protected
only by the State that granted or recognized
them
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