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PRIL - Part 4B - Choice of Law Problems - Property - Coggle Diagram
PRIL - Part 4B - Choice of Law Problems - Property
XIII. Choice of Law in Property
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A. The Controlling Law
- Treatment varies depending on whether the property in question is a movable or immovable.
B. Capacity to Transfer or Acquire Property
- Lex Situs. Law of the place where the property is located.
C. Extrinsic and Intrinsic Validity of Conveyances
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Extrinsic Validity - Lex Loci Contractus
Intrinsic - Generally, Lex Situs
D. Exceptions to Lex Situs
- Three recognized exceptions.
E. Situs of Certain Properties -
F. Patents, Trademarks, Trade Name and Copyright
PH Law - IP Code (RA 8293)
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Sec. 123 - Prohibits registration of well known trademarks, regardless if already registered here. Considered a mark of a person other than the applicant for registration, and used for identical or similar goods or services.
Sec. 3 - Foreign corporation party to a convention, treaty or agreement relating to IP rights to which PH is a party or, extends reciprocal rights to PH nationals by law entitled to benefits to extent necessary to give effect to any provision of the convention.
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Intangible Personal Property
Foreign Treaties
- Paris Convention for the Protection of Industrial Property - Sec. 8, Trade names protected in all the countries of the Union, without the obligation of filing of registration, w/n it forms part of the trade name.
Requisite of Doing Business
- Trade names may be protected regardless if it does business in the Philippines.
Rationale -
IP Right
- Property right, which may be asserted against the whole world.
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Personal Properties for Tax Purposes
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GR - mobilia sequuntur personam (law of the owner's domicile)
XCPN - This si recognized fiction of law, originating from public policy and convenience. Thus, cannot be applied to limit right of a state to tax property within its jurisdiction.
Thus, facts of legal ownership, actual presence, control elsewhere inapplicable if it would result in patent injustice.
Asiatic Petroleum v. Co Quico
Money
- Leon v. life insurance, here, funds in question were endorsed in annuity in Canda, contract executed in Canda. Thus, Canda situs of the money.
Branch or agency of the company which held the funds in its possession irrelevant - Agency's intervention limited to delivering the checks from the home office.
Thus, no showing or allegation that fund transferred to the Manila Branch
Debts
- Two kinds of movable property.
Chose in Posession - Tangible physical objects
Choses in Action - Intangible objects
Choses in Action -
Rights of Action - Such as debt. Situs of debt is location where the debtor is, because it is where he can be sued and the debt be collected.
Criticism - Prof. Beale - Creditor, who ist he owner of the property has no power to fix personal rpesence of the debtor at one place or another. Thus, forced to travelw here teh debtor is.
Rights represented by a document capable of delivery and negotiation
PH Application - Situs of debt is unsettled.
EAP Suggestion - Law which governs the contract form which the debt arises governs the transfer of debt.
Corporate Shares of Stock
- Corp Code Sec. 63
Situs of Income Derived from sale of Shares
- Place of gain. Thus, place of sale governs, not lex rei sitae.
Place of Sale - Place when and where title to the goods passes from the seller to the buyer is decisive.
Situs of Shares of stock
- Considered intangible personal properties. (Lex Rei Sitae if in PH)
Lex Intentionis/Voluntatis
- Where the transaction does not affect transfer of title or ownership of the land.
2. Contracts where real property is offered by way of security for the performance of an obligation.
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Principal Contract - Governed by rules on ordinary contract.
Accessory Contract - Such as mortgage affecting land, here, lex situs applies.
Ordinary Rules on Contracts -
Extrinsic Validity
- Lex Loci Celebrationis
Intrinsic Validity
- Effects Vary
Law of the place of the making (Loci Celebrationis)
Law of place of performance (Lex Loci Solutionis)
Law intended by the parties (lex intentionis)
3. Testate/Intestate Succession
- NCC 16, as well as capacity to succeed governed by the national law of the decedent.
Policy Centered Approach
- Forum court not bound to look at law of situs when the situs of the movable at time of transfer is insignificant or accidental.
Ex. When place was chosen for mere convenience of one party and both knew that hte movable would be used principally in another location Here, law of place of use governs.
Issue involves non-validity/effect of transfer, courts may apply law of a state which has real interest in applying the law. (US case, Rudow v. Fogel, issue did nto relate to land title, but w/n conveyance results in constructive trust among persons residing in another state --> Law of the domicile of the trustor/trustee and not lex situs)
Case: Spouses Alcantara v. Nido, G.R. No. 165133, 19 April 2010
Formalities of Contract to Convey Property
- Governed by Lex Situs. Thus, any transfer of property which requires registration of title cannot be accepted by registry of property unless lex situs laws complied with.
Rationale - Validity and effect of conveyance of property are treated as a question of property, rather than contract.
Essential Validity of Transfer -
GR - Lex Situs
XCPN - Lex intentionis is clearly established.
Effects of Conveyance
- Lex Situs.
Llantino v. Co Liong Chong
Cheesman v. IAC
Immovables
- Lex Situs.
Rationale - The immovable property is characterized as an isolated object of rights, so that the interests of various persons is determined by the law of the place where the land is situated. Connecting factor is NOT the parties concerned.
Movables
- Originally, mobilia sequuntur personam (law of the owner's domicile)
Rationale - Purposes of simplicity, as movables could be moved frequently such that locaiton at any given time difficult to anticipate.
Lex Situs
- Based on exercise of power. State where the property is situated, having the sole power to decide the validity and effects of the transfer of property.
Policy Rationale - By looking to law of the state where the object is situated, parties know that at the time of the conveyance of the properties w/n there was a valid transfer and nature of itnerest created.
Based on expectation that contract to be governed by the law of the state where the object is situated.
PH law
- NCC 16 and 414 - Properties are subject to the law of the country where it is situated. (Lex Situs / Lex Rei Sitae)
Rationale - being physically a part of the country, should be subject to laws thereof.
Modern Approach - Lex Situs also appropriate, because situs is the place most closely and significantly related to the issues in question.
Movables
- Due to great increase in amount and variety of personal properties not connected with he person of the owner, lex sitae applied as well to movables.
Taxation - Personal property may be separated from its owner, who may be taxed at the place where the property is located, even if he is not a domiciliary, citizen, or resident of the state which imposed the tax.
Lex Loci Actus
- Law of the place where the transaction was completed AND the proper law of the forum.
Proper Law - law of the state which has the most real connection with the transfer.