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Article 16 of the Civil Code provides that "Real property as well as personal property is subject to the law
of the country where it is situated." This provision embodies the rule of lex loci or lex loci rei sitae.

the rule is that the action is governed by the law of the place where the land is located- laurel v. Garcia,
187 SCRA 797 [1990];

No court of a state can, by its judgment, directly bind or affect property beyond the limit of that state.- Times,
Inc. v. Reyes, 39 SCRA 303 [1971]

However, a distinction is made between contracts directly affecting title to real property, which are to be so
construed according to the law of the state where the property is situated, and contracts which, while relating
to real property, do not directly affect the title to or an interest in the property itself but are purely personal.
Agreements of the latter nature are governed by the usual rules of contracts, and will not be influenced by
the lex rei sitae,

Article 16 of the Civil Code changed the rule, by making personal property subject to the law of the country
where it is situated, which may be in a country different from that of its owner. However, when the owner
brings with him his personal property that can be carried, i.e., valuable jewelries, the law of the country
where he is, is also the place where the personal property is located and makes it subject to such law. In
this sense, the maxim, mobilia sequantar personam applies.--- This maxim means "moving things follow
the laws of the person, i.e., the owner

This means that the lex rei sitae, governs all questions of transfer, capacity to transfer and to acquire, and
of the validity, effect and construction of conveyances.

Articles 415, 416 and 417 of the Civil Code classify, by enumeration, what are immovable or real properties
and what are movable or personal properties.

It has been held that the situs of intangibles is in truth a legal fiction, which, for certain purposes and in the
interest of justice and convenience, may be the domicile of the creditor or the country of his nationality, or
the domicile or the place of business of the debtor, or any place where the debtor can be found.

For the purpose of filing a suit for collection of the debt or the enforcement of the obligation, what is
important is where the debtor may be found or where he may have property against which a judgment in
favor of the creditor may be enforced.

The situs of shares of stock is in the country or state where the corporation which issues them is registered
and organized. The law of the situs of the shares of stock determines how shares are transferred, which is
the Corporation Code of the Philippines insofar as corporations registered and organized in the country are

Philippine law on real property, as it may impinge upon conflict of laws, is that ownership of land is reserved
only to a Filipino citizen or to a private corporate whose capital stock is owned by at least 60% of such

Thus, only citizens or private corporations whose capital stock is owned by at least 60% of such citizens
can own private lands or can transfer or convey the same only to such citizens or private Filipino
corporations, except by hereditary succession.

The 60% Filipino ownership requirement for a corporation to own land does not apply to a corporation sole,
as the latter is only the administrator of the temporalities in the diocese, on behalf of the faithful who are
Filipino citizens.9 But such requirement applies to religious societies composed of foreigners.--- 9Roman
Catholic Apostolate Administrator of Davao v. Land Registration Commissioner, 102 Phil. 596 [1957].
"Register of Deeds of Rizal v. Ung Sin Temple, 97 Phil. 58 [1955].
Section 7 of Article XII of the 1987 Constitution provides:

"Sec. 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."

The rule in Section 7 prohibiting the transfer of private land to alien is construed strictly, the purpose being
to keep the land in the hands of Filipinos. Thus, it does not cover testamentary succession,-- (Ramirez v.
Vda. de Ramirez, 111 SCRA 704 [1982]).

Exception to Section 7:

 Such hereditary succession takes place when a Filipino, who owns land in the country and who
have children, some or all of them later became naturalized citizens of another country, dies
intestate, his children will inherit the land, even if they are no longer Filipino citizens.
 "Sec. 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 land, subject to
the limitations provided by law."-- does not automatically divest him of the ownership of his land.12
He may lawfully sell the land to a Filipino citizen. -- l2Cf. Republic v. Court of Appeals, 235 SCRA
562 [1994].
However, where the buyer, an alien, subsequently sold the land to a Filipino citizen15 or the buyer
has in the meanwhile acquired Filipino citizenship by naturalization, the restriction no longer
The constitutional prohibition does not apply to a lease in favor of a foreigner of real property for a
reasonable period. If the period of lease is unreasonable, say 50 years or more, it may amount to
an indirect circumvention of the restriction and will be construed as a sale, in violation of the
constitutional provision.

Exception to rule prohibiting alien from owning Land

The right of a foreign state to acquire land in the receiving state, necessary for the creation and maintenance
of its diplomatic mission, stated also on Article 31(a) of the Convention

In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate business,
surely the said transaction can be categorized as an act jure gestionis.

If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially
when it is not undertaken for gain or profit.

Conflict of laws in real property situated in another country.

The Court ruled that a conflict of law situation exists with respect to real property situated in another country,
when "(1) there is a dispute over the title or ownership of an immovable, such that the capacity to take and
transfer an immovable, the formalities of conveyance, the essential validity and effect of the transfer, or the
interpretation and effect of a conveyance, are to be determined" and "(2) A foreign law on land ownership
and its conveyance is asserted to conflict with a domestic law on the same matters;" and "hence, the need
to determine which law should apply."--- laurel v. Garcia, 187 SCRA 797 [1990].

Illustrative case of lex loci: Laurel v. Garcia.

In^Haurel v. Garcia,29 the proponents for the sale of the Roppongi real property in Japan, owned by the
Philippine Government, sought the application of the rule on lex loci, as understood in American
jurisprudence, to justify its sale.

The facts are as follows:

The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidaimachi, Shibuyaku, Tokyo which has an area of
approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy Chancery;

(2) The Kobe Commercial Property at 63 Naniwacho, Kobe, with an area of around 764.72 square meters
and categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff;

(3) The Kobe Residential Property at 1-980-2 Obanoyamacho, Shinohara, Nadaku, Kobe, a residential lot
which is now vacant.

The properties and the capital goods and services procured from the Japanese government for national
development projects are part of the indemnification to the Filipino people for their losses in life and property
and their suffering during World War II.


On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to
avail of reparations' capital goods and services in the event of sale, lease or disposition. The four properties
in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause.

Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great
vigor, its decision to sell the reparations properties starting with the Roppongi lot. The property has twice
been set for bidding at a minimum floor price at $225 million. The first bidding was a failure since only one
bidder qualified. The second one, after postponements, has not yet materialized. The last scheduled bidding
on February 21, 1990 was restrained by his Court. Later, the rules on bidding were changed such that the
$225 million floor price became merely a suggested floor price.

The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. 92013
objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as
a principal objection the alleged unjustified bias of the Philippine government in favor of selling the property
to non-Filipino citizens and entities. These petitions have been consolidated and are resolved at the same
time for the objective is the same — to stop the sale of the Roppongi property.

The petitioner in G.R. No. 92013 raises the following issues:

(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and

(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property?


The respondents try to get around the public dominion character of the Roppongi property by insisting that
Japanese law and not our Civil Code should apply.

It is exceedingly strange why our top government officials, of all people, should be the ones to insist that in
the sale of extremely valuable government property, Japanese law and not Philippine law should prevail.
The Japanese law — its coverage and effects, when enacted, and exceptions to its provisions — is not
presented to the Court. It is simply asserted that the lex loci rei sitae or Japanese law should apply without
stating what that law provides. It is assumed on faith that Japanese law would allow the sale.

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. 377383); 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 belaboring 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?30

Of significance, in connection with lex loci, is the question whether real property situated in a foreign country,
owned by the Philippine Government or by its citizen, can be sold to an alien? This question is important
because under the Philippine Constitution an alien or a corporation whose capital stock is not owned to the
extent of at least 60% thereof by citizens of the Philippines is disqualified to own land; and with respect to
the Philippine Government as owner of the real property, its sale can be made only by the President of the
Philippines or the country's authorized officer and the sale is authorized by law. There can be no question
that if the real property is situated in the Philippines, these requirements apply and preclude any sale or
transfer without complying with these requirements.

Will it mean that the constitutional requirements will no longer apply when the land is situated in a foreign
country, such that pursuant to the lex loci principle, the law of such foreign country governs as to the formal
and substantial requirements of the sale of the property, such as the restrictions on transfer or sale, the
capacity of the parties to sell and the capacity of the person to buy or to take the property, regardless of his
nationality, even if such foreign law does not conform with the Philippine Constitution or law on the matter?
Can the real property be sold to a non-Filipino citizen? The Court in Laurel sidestepped these questions
because of its ruling that no conflict of laws situation exists and that there is no showing that the Roppongi
property can be sold.

Growing out of the sovereign authority of a country is the settled rule that no country can dictate on what
another country can enact as its laws, nor can it override the foreign country's law. In accordance with the
settled rule, the lex loci rule may perhaps apply if the seller of the property situated in another country is a
Filipino citizen and not the Philippine Government for in case of the latter, the sale is required to be
authorized by law, which then can provide that it be sold only to a Filipino citizen, to avoid any conflict of
law situation.

Damages may arise from delict or from crime, or quasi-delict or from negligence

Article 100 of RPC, Article 19 & 20 of the Civil Code

The elements of abuse of right that may be actionable are: (1) there must be a legal right or duty; (2) the
right is exercised in bad faith; and (3) it is for the sole intent of prejudicing or injuring another.

Our Court applied the "grave abuse of rights" as basis for awarding damages in Saudi Arabian Airlines vs.
Court of Appeals,3 involving conflict of laws case.

Law governing torts.

lex loci delicti or law of the place of the wrong

The law of the place of the wrong may defeat recovery because of the failure of the injured person to fulfill
certain statutory conditions

Lex fori — The law of the forum, where the case is filed. The term is used in contract of denoting the law
of_the place where a transaction took place or where the wrong causing Hamage or "injury occurred

Where an action is brought in one state based on facts occurring in another which do not constitute a
common-law right of action, it is necessary for the plaintiff to plead and prove that in such other state there
is a statute permitting a recovery; otherwise, it will be presumed that the common law is in force there and
therefore that the action is not maintainable.

Where the issue is the choice of law of the place where an allegedly wrongful act or omission took place
and the law of the place where the injury or harm was sustained--- the law of the place of the tort or wrong
governs liability

Where the question relates to the choice between the law of the place in which a fatal injury was inflicted
and the law of the place in which the resulting death took place--- is the place where the fatal injury was
inflicted, and not the place where the resulting death occurred.

the relatively new 'grouping of contacts' or 'center of gravity' theory developed with respect to determining
the governing law as in contracts.

It is not strict right, but_comity, which enables one to bring an action in one state or country for a tort, such
as negligent death or bodily injuries, caused in another, and under the principles of comity, such action will
not be entertained if it would violate the public policy of the forum,